Document:

Exhibit 4.2

Summary of 7 Haplada St., Or Yehuda Lease Agreement (November 7, 2000)

     Building at 7 Haplada St., Or Yehuda
     Lessor: Mordechai Yaron and Joseph Silberminz.
     Lessee: Aryt Industries Ltd.
     Size: approximately 4,500 square meters.
     Signing Date: November 7, 2000.
     Term of agreement: from October 1, 2000 until September 30, 2002.
     Monthly Lease fees: $37,000. $18,500 linked to the Israeli Consumer
     Price Index and 18,500 linked to the exchange rate of the Dollar but
     not less than 4.1 NIS per Dollar together with linkage to the US CPI as
     published by the Department of Trade and Commerce.
     Options: Two additional periods of two years each, from October 1, 2002
     until September 30, 2006.Exhibit 4.9

                   SHARE PURCHASE AND SHAREHOLDERS AGREEMENT
                   -----------------------------------------

     THIS SHARE PURCHASE AND SHAREHOLDERS AGREEMENT (this "Agreement") made as
of the 13th day of March, 2000, by and among, Sensotech Ltd. (51-222941-0) a
company limited by shares and formed and existing under the laws of the State
of Israel (the "Company"), the shareholders identified in Schedule 1 hereto
(severally the "Shareholders"), Aryt Industries Ltd. (52-003335-8) a company
limited by shares and formed and existing under the laws of the State of
Israel (the "Purchaser") Eli Gal, Israel ID No. 051361731, Uri Agam, Israel ID
No. 050815851, Shlomit Gal, Israel ID No. 052906435, Ilana Agam, Israel ID No.
050713171, Nichsei Uri Ltd. (51-228637-8) a company limited by shares and
formed and existing under the laws of the State of Israel, and Nichsei Eli
Ltd. (51-228634-5) a company limited by shares and formed and existing under
the laws of the State of Israel (Eli, Uri, Shlomit, Ilana, Nichsei Uri and
Nichsei Eli - jointly and severally the "Founders") (the Company,
Shareholders, Purchaser and Founders shall be hereinafter collectively
referred to as the "Parties")

                             W I T N E S S E T H:

WHEREAS:            the Company is engaged, inter alia, in the development,
                    manufacture and marketing of intelligent, non-contact
                    sensing equipment (the "Line of Business"); and

WHEREAS:            the Board of Directors of the Company has decided to raise
                    additional capital for the Company through the issuance of
                    the Company's shares; and

WHEREAS:            the Purchaser desire to purchase shares of the Company
                    pursuant to the terms and conditions more fully set forth
                    in this Agreement; and

WHEREAS:            the Parties have agreed that immediately following the
                    Closing they desire to make certain provisions as
                    hereinafter set forth relating to the operation of the
                    Company and the rights of its shareholders, including
                    without limitation rights to purchase, transfer, encumber
                    or otherwise acquire or dispose of the shares of the
                    Company which they may own or may thereafter acquire and
                    the rights of the Company to permit the transfer of or to
                    issue any such shares; and

WHEREAS:            in consideration of the agreement of all of the Parties to
                    enter into this Agreement, the Founders and each of the
                    Shareholders agree to the termination of any existing
                    Shareholders Agreement, including, but not limited to,
                    those dated 29.7.96 and 7.11.96, by and among the Company
                    and certain Shareholders, (the "Existing Shareholders
                    Agreements"), and that this Agreement shall supersede and
                    replace the Existing Shareholders Agreements;

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

1.   ISSUANCE OF SERIES B PREFERRED SHARES, AND WARRANTS
     ---------------------------------------------------

     1.1. Subject to the terms and conditions hereof, the Company shall issue
          and allot to the Purchaser, and the Purchaser shall purchase from
          the Company an aggregate of Two Thousand One Hundred and Twenty Nine
          (2,129) Series B Preferred Shares NIS 1 par value each of the
          Company (the "Preferred B Shares") at a price per share of Four
          Hundred and Seventy US dollars (US$ 470), at an aggregate purchase
          price of One Million and Six Hundred and Thirty United States
          Dollars (US$1,000,630) (the "Purchase Price") representing a
          Company's value of US$3,000,000 pre-money.

     1.2. In addition, the Company shall issue to the Purchaser Two Thousand
          One Hundred and Twenty Nine (2,129) warrants to purchase additional
          2,129 Preferred B Shares, at an aggregate purchase price of One
          Million United States Dollars (US$1,000,000), or, in case the
          exercise shall be after 1 May, 2001, One Million and Two Hundred
          Thousand United States Dollars (US$1,200,000) (the "Exercise
          Price").

2.   CLOSING
     -------

     2.1. Closing Time, Date and Location
          -------------------------------

          The Closing shall take effect at the offices of Rebhan, Mann & Co.,
          2 Bloch St. Tel-Aviv, Israel, on April 9, 2000, at 10:30 a.m.
          Israeli Standard Time, or at such other time and place as the
          parties shall agree in writing (the "Closing Date"). In the event
          that: (i) all of the events and actions described in this Section 2
          have not taken place on or before April 13, 2000; and (ii) the
          Purchaser has not agreed to set the Closing to a different date,
          then the Closing shall not take place and this Agreement will cease
          automatically. In such event, each party will be released from all
          of its obligations under this Agreement.

     2.2. The Closing
          -----------

          All actions at the Closing and all transactions occurring at the
          Closing shall be deemed to take place simultaneously and no
          transactions shall be deemed to have been completed or any document
          delivered until all such transactions have been completed and all
          required documents delivered.

     2.3. Purchaser Actions
          -----------------

          At the Closing, the Purchaser shall deliver or cause to be delivered
          to the Company:

          2.3.1.    A certified check on the amount of the Purchase Price
                    (less $200,000 which were granted as a loan to the Company
                    and, on the Closing, were converted to advanced payment
                    for the Preferred B Shares as part of the Purchase Price)
                    to the order of the Company payable in NIS in accordance
                    with the then known representative rate of the US$ as
                    published by the Bank of Israel.; and

          2.3.2.    a counterpart of this Agreement and any ancillary
                    agreements referred to herein duly executed by the
                    Purchaser; and

          2.3.3.    a written notice appointing the Preferred B Shares'
                    representatives to the Company's Board of Directors (the
                    "Board of Directors") in the manner contemplated in
                    Section 7.6 below; and

     2.4. Company Actions
          ---------------

          At or prior to the Closing, the Company shall deliver or cause to be
          delivered to the Purchaser:

          2.4.1. a copy of a resolution of the Company's shareholders in the
                 form attached hereto as Schedule 2.4.1(a) by which: (i) the
                 execution of this Agreement and all the transactions
                 contemplated hereby, and the performance of the Company's
                 obligations hereunder have been fully approved; and (ii) the
                 Articles of Association of the Company have been amended as
                 outlined in Schedule 2.4.1(b) (the "Amended Articles"); the
                 Company shall notify the Israeli Registrar of Companies of
                 the resolutions mentioned in this Section 2.4.1 promptly
                 after the Closing and shall deliver a copy of such notice to
                 the Purchaser's counsel;

          2.4.2. a copy of a resolution of the Company's Board of Directors
                 approving (i) the Company's execution and performance of this
                 Agreement, and (ii) the issuance by the Company to the
                 Purchaser of the Preferred B Shares, and Warrants and all
                 transactions contemplated hereby, in the form attached hereto
                 as Schedule 2.4.2;

          2.4.3.    a certificate duly executed by the Chief Executive Officer
                    of the Company, dated as of the date of the Closing, in
                    the form attached hereto as Schedule 2.4.3 (the
                    "Compliance Certificate");

          2.4.4.    an opinion of the Company's legal counsel in the form
                    attached hereto as Schedule 2.4.4 (the "Opinion");

          2.4.5.    validly executed share certificate covering the Preferred
                    B Shares, issued on the name of the Purchaser, together
                    with a copy of the issuance deed as filed with the Stamp
                    Tax Authorities and the Registrar of Companies in the form
                    attached hereto as Schedule 2.4.5; and

          2.4.6.    validly executed employment, confidentiality and
                    non-competition agreements between the Company and each of
                    the Founders, and the key employees listed in Schedule
                    2.4.6.(a) (the "Key Employees"), in the form(s) attached
                    hereto as Schedule 2.4.6.(b), pursuant to which the
                    Founders and the Key Employees undertake to provide their
                    services on a full time basis to the Company until April
                    1, 2003 or thereafter; and

          2.4.7.    validly executed 2,129 Warrants issued on the name of the
                    Purchaser, in the form attached hereto as Schedule 2.4.7;
                    and

          2.4.8.    validly executed Management Agreement and Lease Agreement
                    between the Company and the Purchaser in the forms
                    attached hereto as Schedule 2.4.8; and

          2.4.9.    A confirmation by the Company that all of the Company's
                    outstanding warrants, options and convertible loans,
                    including the Convertible Loan, issued by the Company in
                    July 27, 1999, have been fully exercised or converted, as
                    the case may be, in accordance with the terms thereof, and
                    as of the date hereof and the Closing the total issued and
                    outstanding share capital of the Company is 6,387 shares.

3.   REPRESENTATIONS AND WARRANTIES OF COMPANY AND FOUNDERS
     ------------------------------------------------------

     Each of the Company and Founders, hereby jointly and severally,
     represents and warrants to the Purchaser, and acknowledges that the
     Purchaser is entering into this Agreement in reliance thereon, as
     follows:

     3.1. Organization
          ------------

          The Company is duly organized and validly existing under the laws of
          the State of Israel, and has full corporate power and authority to
          own, lease and operate its properties and assets, and to conduct its
          business as now being conducted and as proposed to be conducted in
          accordance with the Business Plan, attached as Schedule 3.1 hereto.
          The Company has all requisite power and authority to execute and
          deliver this Agreement, and the other agreements contemplated hereby
          or which are ancillary hereto, and to consummate the transactions
          contemplated hereby and thereby. Copies of the Memorandum of
          Association and Articles of Association (the "Articles of
          Association") of the Company as of the date hereof are attached
          hereto as Schedules 3.1(a) and 3.1(b), respectively. The Company has
          not taken any action, or, has not failed to take any action, which
          action or failure would preclude or prevent the Company, from
          conducting its respective business after the Closing in
          substantially the manner heretofore conducted. The Company has all
          material franchises, permits, licenses, and any similar authority
          necessary for the conduct of its business as now being conducted and
          as proposed to be conducted by it in accordance with the Business
          Plan, the lack of which could materially adversely affect business,
          properties, or financial condition. The Company is not in material
          default under any of such franchises, permits, licenses, or other
          similar authority.

     3.2. Share Capital
          -------------

          The registered share capital of the Company is Forty Nine Thousand
          Two Hundred New Israeli Shekels (NIS 49,200) divided into: (i)
          Thirty Nine Thousand One Hundred and Eighty Three (39,183) Ordinary
          Shares of a nominal value of NIS 1 each (the "Ordinary Shares");
          (ii) Five Thousand (5,000) Ordinary A Shares of a nominal value of
          NIS 1 each (the "Ordinary A Shares"); (iii) Seventeen (17) deferred
          Shares of a nominal value of NIS 1 each (the "Deferred Shares"); and
          (iv) Five Thousand (5,000) Preferred B Shares (the "Preferred B
          Shares"). Of the Ordinary Shares Five Thousand Seven Hundred and
          Forty Three (5,743) are issued and outstanding. Of the Ordinary A
          Shares, Six Hundred Forty Four (644) are issued and outstanding. Of
          the Deferred Shares, Seventeen (17) are issued and outstanding.

          Schedule 3.2(a) describes all undertakings or commitments to any
          employees, former employees, directors or contractors of the Company
          concerning grants or issuance of shares in the Company or options to
          purchase such shares made by the Company or any director or officer
          of the Company and the number of Ordinary Shares reserved for future
          grants or issuances of shares in the Company or options to purchase
          shares in the Company to any such former employees, employees,
          directors, consultants or contractors. Except for the transactions
          contemplated by this Agreement and except as described in Schedule
          3.2(b), there are no other share capital, pre-emptive rights,
          convertible securities, outstanding warrants, options or other
          rights to subscribe for, purchase or acquire from the Company any
          share capital of the Company and there are not any contracts or
          binding commitments providing for the issuance of, or the granting
          of rights to acquire, any share capital of the Company or under
          which the Company is, or may become, obligated to issue any of its
          securities.

          Except as set forth in this Agreement the Company is not under any
          obligation to register for trading on any securities exchange any of
          its currently outstanding securities or any of its securities which
          may hereafter be issued.

          Except as set forth in Schedule 3.2(c) since its date of
          incorporation, there has been no declaration or payment by the
          Company of dividends, or any distribution of any assets of any kind
          to any of its shareholders in redemption of or as the purchase price
          for any of the Company's securities.

     3.3. Ownership of Shares
          -------------------

          A complete and correct list of the shareholdings including all
          warrants and options for the issuance of share capital of the
          Company immediately prior to and following the Closing is set forth
          in Schedules 3.3(a) and (b) respectively. The individuals and
          entities identified in Schedule 3.3(a) as the shareholders and
          option holders of the Company, immediately prior to the Closing are
          the lawful owners of all of the issued and outstanding share capital
          and options of the Company and none of the said individuals and
          entities owns any other shares, options or other rights to subscribe
          for, purchase or acquire any security of the Company. All issued and
          outstanding share capital of the Company was duly authorized, and
          validly issued and outstanding and fully paid and non-assessable.

     3.4. Directors, Officers
          -------------------

          The directors of the Company are Zvi Fruman, Philip Aarenberg,
          Yehuda Shphir, Dany Marian, Eli Gal and Uri Agam. The officers of
          the Company are Eli Gal and Uri Agam. Except for the agreements
          attached and listed in Schedule 3.4, neither the Company nor its
          Shareholders are party to any agreement, obligation or commitment,
          with respect to: (i) the election of any individual or individuals
          to the Board; (ii) any voting agreement or other arrangement among
          the Company's shareholders; or (iii) any compensation to be provided
          to any of the Company's directors, officers or shareholders.

     3.5. Financial Statements
          --------------------

          The Company has furnished the Purchaser with its: audited, financial
          statements as of and for the year ended December 31, 1998 (the
          "Financial Statements"), which are attached hereto as Schedules 3.5.
          The Financial Statements are true and correct in all material
          respects, are in accordance with the books and records of the
          Company and have been prepared in accordance with Israeli generally
          accepted accounting principles ("GAAP") consistently applied, and
          fairly and accurately present in all material respects the financial
          position of the Company as of such dates and the results of its
          operations for the periods then ended. Except as expressed in the
          Financial Statements, the Company has no material liabilities, debts
          or obligations, whether accrued, absolute or contingent other than
          liabilities reflected or reserved against in the Financial
          Statements. As of February 29, 2000, the total Company's liabilities
          are as set forth in Schedule 3.5(b) (excluding liabilities as a
          result of, or in connection with, this Agreement). Except as set
          forth in Schedule 3.5(c) since December 31, 1998, the Company has
          operated in the ordinary and usual course of business, and there has
          not been to the best of their knowledge, information and belief:

          (i)     any material change in the assets, liabilities, condition
                  (financial or otherwise) or business of the Company from
                  that reflected in the Financial Statements;

          (ii)    any damage, destruction or loss, whether or not covered by
                  insurance, materially and adversely affecting the assets,
                  properties, condition (financial or otherwise), operating
                  results, prospects or business of the Company (as such
                  business is presently conducted and as it is proposed to be
                  conducted);

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

          (iv)    any satisfaction or discharge of any lien, claim or
                  encumbrance or payment of any obligation by the Company,
                  except in the ordinary course of business and that is not
                  individually or in the aggregate adverse to the assets,
                  properties, condition (financial or otherwise), operating
                  results or business of the Company (as such business is
                  presently conducted and as it is proposed to be conducted);

          (v)     any material change or amendment to a material contract or
                  arrangement by which the Company or any of its assets or
                  properties are bound or subject;

          (vi)    any material change in any compensation arrangement or
                  agreement with any employee of the Company;

          (vii)   any loans made by the Company to its employees, officers, or
                  directors other than advances made in the ordinary course of
                  business to cover out of pocket expenses;

          (viii)  any sale, transfer or lease of, or mortgage or pledge or
                  imposition of lien on, any of the Company's assets except in
                  the ordinary course of business;

          (ix)    any change in the accounting methods or accounting
                  principles or practices employed by the Company; or

          (x)     any other event or condition of any character that would
                  materially adversely affect the assets, properties,
                  condition (financial or otherwise), operating results,
                  prospects or business of the Company (as such business is
                  presently conducted and as it is proposed to be conducted).

     3.6. Authorization; Approvals
          ------------------------

          All corporate action on the part of the Company necessary for the
          authorization, execution, delivery, and performance of all its
          obligations under this Agreement has been (or will be) taken prior
          to the Closing. This Agreement, when executed and delivered by or on
          behalf of the Company at the Closing, shall constitute the valid and
          legally binding obligations of the Company, legally enforceable
          against the Company in accordance with its terms. No consent,
          approval, order, license, permit, action by, or authorization of or
          designation, declaration, or filing with any governmental authority
          on the part of the Company is required that has not been, or will
          not have been, obtained by the Company prior to the Closing in
          connection with the valid execution, delivery and performance of
          this Agreement.

     3.7. Compliance with Other Instruments
          ---------------------------------

          Except as otherwise set forth in Schedule 3.7, the Company, to the
          best of its knowledge, is not in default: (a) under its Memorandum
          or Articles of Association ("Governing Instruments"); (b) under any
          material note, indenture, mortgage, lease, agreement, contract,
          purchase order or other instrument, document or agreement to which
          the Company is a party or by which it or any of its property is
          bound or affected (the "Agreements"); or (c) with respect to any
          law, statute, ordinance, regulation, order, writ, injunction,
          decree, or judgment of any court or any governmental department,
          commission, board, bureau, agency or instrumentality, domestic, or
          with respect to countries in which the Company operates, including
          but not limited to the Companies Ordinance [New Version] 1983 and
          the Companies Law 1999, (the "Laws and Regulations"), which default,
          in any such case described above, would materially adversely affect
          or in the future is reasonably likely to materially adversely affect
          the Company's business, condition (financial or otherwise), affairs,
          operations or assets. No third party is in default under agreements
          to which the Company is a party or by which it or any of its
          property is affected. To the best of the Company's and the Founder's
          information knowledge and belief, the Company, is not a party to or
          bound by any order, judgment or decree of any governmental
          authority, agency, court, tribunal or arbitrator.

     3.8. No Breach
          ---------

          Except as described in Schedule 3.8 hereto, as of the Closing,
          neither the execution and delivery of this Agreement nor compliance
          by the Company with the terms and provisions hereof, will conflict
          with, or result in a material breach or violation of, any of the
          terms, conditions or provisions of the Governing Instruments,
          Agreements or Laws and Regulations, as such terms are defined in
          Section 3.7 above. Such execution, delivery and compliance will not:
          (a) give to others any rights, including rights of termination,
          cancellation or acceleration, in or with respect to any agreement,
          contract or commitment referred to in this paragraph, or to any of
          the properties of the Company; or (b) otherwise require the consent
          or approval of any person, which consent or approval has not
          heretofore been obtained.

     3.9. Records
          -------

          Schedule 3.9, is the complete minute book of the Company which has
          been provided to the Purchaser and which contains accurate and
          complete copies of the minutes of every meeting of the Company's
          shareholders and board of directors (and any committee thereof) at
          which resolutions were adopted which concerned any subject material
          to the Company's business or which concerned the Company's shares,
          shareholders, employees or directors. The corporate records of the
          Company have been maintained in accordance with all applicable
          statutory requirements and are complete and accurate in all material
          respects. Except as set forth in Schedule 3.9 (a) hereto, all
          resolutions were adopted in accordance with all applicable laws,
          regulations and agreements and are in full force and effect.

     3.10. Ownership of Assets
           -------------------

          Complete and correct copies of leases and licenses of property
          leased or licensed to the Company have been furnished to counsel for
          the Purchaser and are listed in Schedule 3.10 hereto. Except as set
          forth in Schedule 3.10 hereto: (i) the Company has good and
          marketable title to all of the properties and assets, both real and
          personal, tangible and intangible, that it purports to own,
          including the properties and assets reflect on the Financial
          Statements, and it is not subject to any mortgage, pledge, lien,
          security interest, conditional sale agreement, encumbrance or charge
          except routine statutory liens securing liabilities not yet due and
          payable and minor liens, encumbrances, restrictions, exceptions,
          reservations, limitations and other imperfections which do not
          materially detract from the value of the specific asset affected or
          the present use of such asset; and (ii) the Company is not in
          default or in breach of any material provision of its leases or
          licenses and holds a valid leasehold or licensed interest in the
          property it leases or that is licensed to it.

     3.11. Intellectual Property and Other Intangible Assets
           -------------------------------------------------

          3.11.1. Schedule 3.11.1(a) is a full and complete list of all of the
                  intellectual property which the Company owns or has the
                  right to use, including all patents, trademarks, service
                  marks, trade names and copyrights, and applications,
                  licenses and rights with respect to the foregoing, and all
                  trade secrets, including know-how, inventions, designs,
                  processes, works of authorship, computer programs and
                  technical data and information (collectively herein
                  "Intellectual Property") used and sufficient for use in the
                  conduct of its business as now conducted (including, without
                  limitation, the development, manufacture, operation and sale
                  of all products and services sold by the Company). To the
                  best of the Company's and Founders' knowledge, except as
                  detailed in Schedule 3.11.1(b), (i) all of the Intellectual
                  Property is free and clear of all liens, claims and
                  restrictions, without infringing upon or violating any
                  right, lien, or claim of others, including without
                  limitation former employees and former employers of the past
                  and present employees of the Company, and (ii) the Company
                  is not obligated, nor is under any liability whatsoever to
                  make any payments by way of royalties, fees or otherwise to
                  any owner or licensee of, or other claimant to, any patent,
                  trademark, service mark, trade name, copyright or other
                  intangible asset, with respect to the use thereof or in
                  connection with the conduct of its business or otherwise.

          3.11.2. Except as set forth in Schedule 3.11.2(a) any and all
                  Intellectual Property of any kind currently being developed
                  by any employee of the Company while in the employ of the
                  Company, is the property solely of the Company. The Company
                  has taken reasonable security measures to protect the
                  secrecy, confidentiality and value of all the Intellectual
                  Property, which measures are satisfactory to the Company's
                  management and board of directors. As of the Closing each of
                  the Company's employees will be party to non-disclosure,
                  invention assignment and non-compete undertakings. True and
                  correct copies of all agreements regarding ownership and
                  treatment of Intellectual Property with each of the
                  Company's employees and other persons who, either alone or
                  in concert with others, developed, invented, discovered,
                  derived, programmed or designed the Intellectual Property,
                  or who have or had knowledge of or access to information
                  about the Intellectual Property and whose names are listed
                  in Schedule 3.11.2(b), and who have entered into such
                  agreements with the Company have been delivered to the
                  Purchaser and all such agreements are in form and substance
                  satisfactory to the Company's management.

          3.11.3. The Company has not received any communications alleging
                  that the Company has violated or by conducting its business
                  as proposed, would violate, any of the patents, trademarks,
                  service marks, trade names, copyrights or trade secrets or
                  other proprietary rights of any other person or entity. None
                  of the Company's employees, to the best of the Company's and
                  the Founders knowledge, information and belief, is obligated
                  under any contract (including licenses, covenants or
                  commitments of any nature) or other agreement, or subject to
                  any judgment, decree or order of any court or administrative
                  agency, that would interfere with the use of such employee's
                  best efforts to promote the interests of the Company that
                  would conflict with the Company's business as conducted and
                  as proposed to be conducted.

     3.12. Taxes
           -----

          Except as set forth in Schedule 3.12, the Company has accurately
          prepared and timely filed all income, property, "value added",
          payroll and other tax returns and filings that are required to be
          filed by them (the "Tax Returns") and have paid or made provision
          for the payment of all amounts due pursuant to such returns. The Tax
          Returns are true and complete in all material respects. None of the
          Tax Returns have been audited by any taxing authority. The Company
          has not been advised that any of such Tax Returns will be so
          audited, and there are no waivers in effect of the applicable
          statute of limitations for any period. No deficiency assessment or
          proposed adjustment of income or payroll taxes of the Company is
          pending and the Company has no knowledge, of any proposed liability
          for any tax to be imposed.

     3.13. Contracts
           ---------

          Schedule 3.13 contains a true and complete list of all material
          contracts and agreements (the "Material Contracts") to which the
          Company is a party or by which its property is bound. Each of the
          Material Contracts is in full force and effect, and neither the
          Company nor any other party thereto is in material breach thereof.
          True and correct copies of each of the Material Contracts have been
          delivered to the Purchaser.

          For the purpose hereof the term "Material" shall include any
          undertaking whose aggregate value exceeds $10,000.

     3.14. Litigation
           ----------

          3.14.1. Except as described in Schedule 3.14.1(a), no action,
                  proceeding or governmental inquiry or investigation is
                  pending or, to the Company's and the Founders' best
                  knowledge, threatened against the Company or to the best of
                  the Company's and the Founders' knowledge against any of the
                  Company's officers, directors or employees (in their
                  capacity as such) or any of the Company's properties before
                  any court, arbitration board or tribunal or administrative
                  or other governmental agency, nor is the Company aware that
                  there is any basis for the foregoing. The foregoing
                  includes, to the Company's and the Founders' best knowledge,
                  without limiting its generality, actions pending or
                  threatened involving the prior employment of any of the
                  Company's employees or use by any of them in connection with
                  the Company's business of any information, property or
                  techniques allegedly proprietary to any of their former
                  employers. Except as described in Schedule 3.14.1(b), the
                  Company is not a party or subject to the provisions of any
                  order, writ, injunction, judgment or decree of any court or
                  governmental agency or instrumentality. There is no action,
                  suit, proceeding or investigation by the Company currently
                  pending or that the Company intends to initiate.

          3.14.2. Except as described in Schedule 3.14.2 no action, proceeding
                  or governmental inquiry or investigation is pending, or to
                  the Company's and the Founders' best knowledge, threatened
                  against the Company, which might have a material adverse
                  effect on the Company, before any court, arbitration board
                  or tribunal or administration or other governmental agency.

     3.15. No Public Offer
           ---------------

          Neither the Company nor anyone acting on their behalf has offered
          securities of the Company, for issuance or sale to, or solicit any
          offer to acquire any of the same from, anyone so as to make issuance
          and sale of the Preferred B Shares hereunder a public offering under
          the US Securities Act of 1933 or the Securities Exchange Act of
          1934, as amended or not exempt from the prospectus publication
          requirements of the Israeli Securities Law 1968. None of the issued
          and outstanding shares of the Company have been offered or sold in
          such a manner as to make the issuance and sale of such shares not
          exempt from such registration requirements, and all such shares have
          been offered and sold in compliance with the Israeli securities
          laws.

     3.16. Interested Party Transactions
           -----------------------------

          Except as set forth in Schedule 3.16, no officer or shareholder or
          director of the Company, or any affiliate of any such person, entity
          or the Company, has or has had, either directly or indirectly: (a)
          an interest in any person or entity which: (i) furnishes or sells
          services or products which are furnished or sold or are proposed to
          be furnished or sold by the Company; or (ii) purchases from or sells
          or furnishes to the Company any goods or services; or (b) a
          beneficial interest in any contract or agreement to which the
          Company is a party or by which it may be bound or affected. There
          are no existing material arrangements or proposed material
          transactions between the Company and any officer, director, or
          holder of more than 5% of the issued share capital of the Company,
          or, to the best of the Company's and the Founders' knowledge, any
          affiliate or associate of any such person. Except as detailed in
          Schedule 3.16, no employee, shareholder, officer, or director of the
          Company is indebted to the Company, nor is the Company indebted (or
          committed to make loans or extend or guarantee credit) to any of
          them, except for the reasonable advances to employees, for out of
          pocket expenses in the ordinary course of business.

     3.17. Employees
           ---------

          As of the date hereof, except as set forth in Schedule 3.17(a), the
          Company, has no deferred compensation or stock option plan covering
          any of its officers or employees (including any employee benefit
          plans).

          Except as described in Schedule 3.17(b), the issuance and sale of
          the Preferred B Shares will not give any employee the right to
          terminate his employment and receive severance or other payments
          from the Company or result in the acceleration or vesting of any
          outstanding option or option share issued by the Company.

          To the best of the Company's and the Founders' knowledge, neither
          the Founders nor any employee of the Company is in violation of any
          term of any employment contract, patent or other proprietary
          information disclosure agreement, or any other contract or
          agreement, relating to the right of any such employee to be employed
          by the Company because of the nature of the business conducted or
          proposed to be conducted by the Company or any other reason, and the
          continued employment by the Company of its respective present
          employees will not result in any such violation.

          Except as set forth in Schedule 3.17(c), the Company made all
          payments and withheld all such monies as is required under the
          Israeli laws for the benefits of its employees. The Company has made
          all payments to the National Insurance Institute for and on behalf
          of its employees.

     3.18. No Unlawful Payments
           --------------------

          Neither the Company nor any of the Founders, nor any director,
          officer, agent or employee of any such person, or to the best of the
          Company's and the Founders' knowledge, any other person associated
          with or acting for or on behalf of the Company, has directly or
          indirectly (a) made any unlawful contributions, gift, bribe, rebate,
          payoff, influence payment, kickback, or other payment to any person,
          private or public, regardless of form, whether in money, property or
          services, (i) to obtain favorable treatment in securing business,
          (ii) to pay for favorable treatment for business secured, or (iii)
          to obtain special concessions or special concessions already
          obtained, for or in respect of the Company, or (b) established or
          maintained any fund or asset that has not been recorded in the books
          and records of the Company, or (c) taken any other action in
          violation of any law of the State of Israel.

     3.19. Insurance
           ---------

          The Company has insurance policies as detailed in Schedule 3.19.

     3.20. Finders Fee
           -----------

          No agent, broker, investment banker, person or firm acting in a
          similar capacity on behalf of or under the authority of the Company
          is or will be entitled to any broker's or finder's fee or any other
          commission or similar fee, directly or indirectly, on account of any
          action taken by the Company in connection with any of the
          transactions contemplated under the Agreement.

     3.21. Chief Scientist and CIIRDF
           --------------------------

          The Company has submitted to the Chief Scientist of the Ministry of
          Industry and Trade of the Government of Israel (the "Chief
          Scientist") applications for receiving grants and has received
          approvals for such grants. A copy of the applications for and the
          certificates of approval of the grants are attached in Schedule
          3.21(a). Except as set forth in Schedule 3.21(b), the Company is in
          full compliance with all conditions specified in the approvals for
          such grants.

          The Company has submitted to the Canada Israel Industrial Research
          and Development Fund ("CIIRDF") application for receiving grants and
          has received approvals for such grants. A copy of the applications
          for and the approval of the grants are attached in Schedule 3.21(c).
          Except as set forth in Schedule 3.21(d), the Company is in full
          compliance with all conditions specified in the approvals for such
          grants.

     3.22. Year 2000 Compliance
           --------------------

          The Company warrants that the Company's products and or software
          (the "Software") is "Year 2000 Compliant", which means the Software
          is designed to:

          3.22.1. correctly and unambiguously handle and process date
                  information before, during and after 1 January 2000. This
                  includes, but is not limited to, accepting date input,
                  providing date output, storing and retrieving dates and the
                  ability to perform calculations on dates or portions of
                  dates.

          3.22.2. correctly process functions that are programmed to commence
                  and/or end on a particular date, including, but not limited
                  to month-end, year-end, leap year and any combination
                  thereof, irrespective of the change in the century
                  identifier; and 3.22.3. the Software responds to two-digit
                  year date input in a way that resolves the ambiguity as to
                  the century in a disclosed, defined and predetermined
                  manner; and to store and provide output of date information
                  in ways that are unambiguous as to the century.

          3.22.4. The Company's computer system and software or the Company or
                  its customers were not and shall not be affected by the year
                  2000 issues.

     3.23. Business Plan
           -------------

          The business plan attached in Schedule 3.23 (the "Business Plan")
          fully reflects the business conducted and proposed to be conducted
          by the Company. The Business Plan has been prepared in good faith
          and with reasonable professional care by the Company and the
          Founders, and such parties are not aware of any information that
          renders the Business Plan untrue or incomplete in any material way.
          The Parties are aware that the Business Plan is based upon various
          estimations and assumptions, the materialization of which is
          uncertain and cannot be guaranteed. Nevertheless, as of the date
          hereof and the Closing Date, the Company does not know of any
          material fact which contradicts such estimation and assumption in
          any material way.

     3.24. Full Disclosure
           ---------------

          Neither this Agreement nor any agreement or document made or
          delivered by the Company or the Founders in connection herewith
          contains any untrue statement of a fact or omits to state a fact
          necessary to make the statements herein or therein not misleading.
          The representations and warranties of the Company, and the Founders
          as set forth hereinabove fully and accurately reflect the conditions
          and state of the Company and they contain substantially all
          information and data known to the Company and/or the Founders which
          are or might be relevant to a third party who is considering to make
          transactions identical to the transaction contemplated hereby.

     3.25. Effectiveness; Survival; Indemnification
           ----------------------------------------

          Each representation and warranty herein is deemed to be made on the
          date of this Agreement and at the Closing. In the event of any
          breach or misrepresentation of any covenant, warranty or
          representation made by the Company under this Agreement, the
          Company, and the Founders jointly and severally shall indemnify the
          Purchaser and hold him harmless from any and all actual liquidated
          loss, damage, liability and reasonable expense (including reasonable
          legal fees and costs), excluding any liability for consequential
          loss or loss of profit sustained or incurred by the Purchaser as a
          result of or in connection with said breach or misrepresentation
          provided that such losses exceed in the aggregate sum of US$50,000.
          Notwithstanding, any other provision of this Agreement to the
          contrary, the liability under this Section to the Purchaser shall be
          limited to the amount of the total purchase price paid by the
          Purchaser for the Preferred B Shares purchased by it under this
          Agreement and the Warrants, if exercised, plus interest of 10% per
          year, and may arise upon written notice to the Company with respect
          to all representations, except those set forth in Sections 3.2,
          ("Share Capital") and 3.11 ("Intellectual Property"), only during a
          period of thirty-six (36) months, beginning at the Closing. The
          liability with respect to sections 3.2 and 3.11 shall be for a
          period of seven (7) years beginning at the Closing. The Parties
          agree that this Section 3.25 shall constitute a separate agreement
          for the requirements of Section 19 of the Israeli Limitations Law,
          1958.

4.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
     -----------------------------------------------

     The Purchaser hereby represents and warrants to the Company as follows:

     4.1. Organization
          ------------

          It is duly organized, validly existing and in good standing under
          the laws of the State of Israel.

     4.2. Enforceability
          --------------

          This Agreement and the agreements to be executed by the Purchaser
          under this Agreement, when executed and delivered by the Purchaser,
          will constitute the valid, binding and enforceable obligations of
          the Purchaser, legally enforceable against the Purchaser in
          accordance with its terms, except: (i) as limited by applicable
          bankruptcy, insolvency, reorganization, moratorium, and other laws
          of general application affecting enforcement of creditors' rights
          generally; and (ii) as limited by laws relating to the availability
          of specific performance, injunctive relief, or other equitable
          remedies.

     4.3. Authorization
          -------------

          The execution, delivery and performance of the obligations of the
          Purchaser hereunder have been (or will be) duly authorized by all
          necessary corporate action prior to the Closing and would not be
          precluded under any agreement or restrictive covenant entered into
          by the Purchaser. No legal, contractual or other impediment known to
          the Purchaser would prevent him from entering into and fully
          complying with his obligations herein.

     4.4. Transferability and Market for the Shares
          -----------------------------------------

          The Purchaser warrants and represents that: (i) it is not acquiring
          the Preferred B Shares with a short term view to, or for resale in
          connection with, any distribution thereof; (ii) the transferability
          of the Preferred B Shares is extremely limited; (iii) no public
          market now exists for any of the Preferred B Shares and there is no
          assurance that a public market will ever exist for such shares; (iv)
          none of the Preferred B Shares have been registered under the
          securities laws of the United States or Israel or the laws of any
          other jurisdiction, and the Purchaser agree that the Preferred B
          Shares may not be sold, offered for sale, transferred, pledged,
          hypothecated or otherwise disposed of except in compliance with
          applicable law; and (v) the Purchaser has read the representations
          and schedules set forth in Section 3 and is entering into this
          Agreement in reliance thereon.

     4.5. Financial Resources
          -------------------

          The Purchaser has the present financial resources required to
          fulfill all of its financial obligations hereunder.

     4.6. Full Disclosure
          ---------------

          Neither this Agreement nor any certificate made or delivered in
          connection herewith contains any untrue statement of a material fact
          or omits to state a material fact necessary to make the statements
          herein or therein not misleading, in view of the circumstances in
          which they were made.

          The foregoing representations, agreements and undertakings and
          acknowledgments are made by the Purchaser with the intent that they
          be relied upon in determining its suitability as a purchaser of the
          Preferred B Shares and the Purchaser hereby agrees that such
          representations, agreements, undertakings and acknowledgments are
          made as of the date of the Closing, and shall survive thereafter for
          a period of 36 months.

5.   CONDITIONS PRECEDENT TO CLOSING BY THE PURCHASER
     ------------------------------------------------

     The obligations of the Purchaser to purchase the Preferred B Shares and
     pay the Purchase Price at the Closing are subject to the fulfillment at
     or before the Closing of the following conditions precedent, any one or
     more of which may be waived in whole or in part by the Purchaser, which
     waiver shall be at the sole discretion of the Purchaser:

     5.1. Representations and Warranties
          ------------------------------

          The representations and warranties made by the Company and the
          Founders in this Agreement shall have been true and correct when
          made, and shall be true and correct as of the Closing as if made on
          the date of such Closing.

     5.2. Covenants
          ---------

          All covenants, agreements, and conditions contained in this
          Agreement to be performed or complied with by the Founders and the
          Company, prior to the Closing, including but not limited to the
          performance of the actions and the delivery of the documents
          specified in Sections 2.4 and 2.5, shall have been performed or
          complied with prior to or at the Closing.

     5.3. Consents, etc.
          --------------

          The Company shall have secured all permits, consents and
          authorizations that shall be necessary or required to consummate
          this Agreement and to issue the Preferred B Shares to be purchased
          by the Purchaser at the Closing and upon the exercise of the
          Warrants, all of which permits, consents and authorizations are
          listed in Schedule 5.3.

     5.4. Payments to Isratech
          --------------------

          Isratech have delivered to the Company a confirmation and consent,
          in the form of Schedule 5.4, whereby Isratech consents to defer
          management fees (in an amount of US$58,000) due to it pursuant to a
          certain agreement among the Company and Isratech, and confirms that
          except this debt the Company is under no debt or liability
          whatsoever to Isratech.

     5.5. No Action, Proceeding, etc.
          ---------------------------

          No action, proceeding, investigation, regulation or legislation
          shall have been instituted, threatened or proposed before any court,
          governmental agency or legislative body to enjoin, restrain,
          prohibit, prevent, or obtain substantial damages in respect of, or
          which is related to, or arises out of, this Agreement or the
          consummation of the transactions contemplated hereby, or which
          affects or may affect the right of the Purchaser to purchase the
          Preferred B Shares.

     5.6. No Adverse Change
          -----------------

          There shall not have occurred prior to the Closing any material
          adverse change or development in the Company's business, or in the
          value or utility of its assets, or in its ability to consummate the
          transactions contemplated hereby.

     5.7. Ordinary Course of Business
          ---------------------------

          The Company shall have continued to operate its business in the
          ordinary course, and shall not have issued any additional
          securities, nor declared any dividends, or made any distributions.

6.   CONDITIONS TO CLOSING BY THE COMPANY
     ------------------------------------

     The Company's obligations to sell and issue the Preferred B Shares at the
     Closing to the Purchaser are subject to the fulfillment, by Purchaser, at
     or before the Closing of the following conditions which conditions may be
     waived in whole or in part by the Company, and which waiver shall be at
     the sole discretion of the Company.

     6.1. Representations and Warranties
          ------------------------------

          The representations and warranties made by the Purchaser in this
          Agreement shall have been true and correct when made, and shall be
          true and correct as of the date of the Closing.

     6.2. Purchase Price
          --------------

          The Purchaser shall have transferred to the Company the Purchase
          Price for the Preferred B Shares in full ($200,000 by conversion of
          the loan granted by the Purchaser to the Company to advanced payment
          for the Preferred B Shares and $800,000 by certified check or wire
          transfer).

7.   AFFIRMATIVE COVENANTS
     ---------------------

     7.1. Use of Proceeds
          ---------------

          The Company will use the proceeds of the issuance and sale of the
          Preferred B Shares to pay any outstanding debt it has, and in
          accordance with the Business Plan, attached hereto as Schedule 3.23.

     7.2. Financial Statements
          --------------------

          The Company shall deliver to the Purchaser, for so long as he is the
          record holders of shares and/or warrants and/or options, in either
          case constituting or exercisable into at least nine percent (9%) of
          the Company's issued and outstanding share capital on an as
          converted basis:

          7.2.1.  as soon as practicable, but in any event within sixty (60)
                  days after the end of each fiscal year of the Company, a
                  consolidated balance sheet of the Company as of the end of
                  such year, and statements of income and statements of cash
                  flow of the Company for such year, setting forth in each
                  case in comparative form the figures for the previous fiscal
                  year, all in reasonable detail, prepared in accordance with
                  Israeli generally accepted accounting principles ("GAAP"),
                  audited by a firm of Independent Certified Public
                  Accountants and accompanied by an opinion of such firm which
                  opinion shall state that such balance sheet and statements
                  of income and cash flow have been prepared in conformity
                  with GAAP, and present fairly in all material aspects the
                  financial position of the Company as of their date, and that
                  the audit by such accountants in connection with such
                  financial statements has been conducted in accordance with
                  generally accepted auditing standards; and 7.2.2. as soon as
                  practicable, but in any event within thirty (30) days after
                  the end of each quarter of each fiscal year of the Company,
                  an unaudited consolidated balance sheet of the Company as at
                  the end of each such period and unaudited consolidated
                  statements of: (i) income; and (ii) cash flow of the Company
                  for such period and, in the case of the first, second and
                  third quarterly periods, for the period from the beginning
                  of the current fiscal year to the end of such quarterly
                  period, setting forth in each case, in comparative form the
                  figures for the corresponding period of the previous fiscal
                  year, all in reasonable detail and except as otherwise
                  stated therein, fairly presenting the financial position of
                  the Company as of their date subject to: (x) there being no
                  footnotes contained therein; and (y) changes resulting from
                  year-end audit adjustments. 7.2.3. Upon the request of the
                  Purchaser, the Company will promptly deliver to the
                  Purchaser such and any reports as may be required by the
                  Purchaser in order to enable the Purchaser to be in
                  compliance with (i) the US and/or Israeli Securities Laws
                  and regulations (ii) the Tel Aviv Stock Exchange's
                  regulations, (iii) requests and/or demands of the Israeli
                  Securities Authority or the US SEC, and (iv) any law or
                  regulation to which the Purchaser is subject to.

     7.3. Annual Plan; Quarterly Report
          -----------------------------

          The management of the Company shall establish an annually operating
          plan and budget for the Company (the "Annual Plan") in consultation
          with the Board. The Annual Plan for the following year shall be
          submitted to the Board of Directors for its approval at least forty
          (40) days prior to the first day of the year covered by such Annual
          Plan.

          The management of the Company shall submit to the Company's Board as
          soon as practicable, but in any event within thirty (30) days after
          the end of each calendar quarter, an unaudited consolidated balance
          sheet of the Company as at the end of such calendar quarter, and an
          unaudited estimated consolidated statement of income and statements
          of cash flow for such calendar quarter.

     7.4. Termination of Financial Information Rights
          -------------------------------------------

          The Company's obligation to deliver the financial statements and
          other information under Sections 7.2 and 7.3 shall terminate and
          shall be of no further force or effect upon the closing of the IPO
          of the Company. Thereafter, the Company shall deliver to Purchaser
          such financial information as the Company from time to time provides
          to other holders of its shares; provided, that the Company's
          obligations under Sections 7.2 and 7.3 shall be restored if the
          Company subsequently ceases to be subject to the informal and
          reporting requirements of the relevant countries' or states'
          securities law.

          Notwithstanding the above, the Company's obligation to deliver the
          financial statements and other information under Sections 7.2.3
          shall terminate and shall be of no further force or effect upon the
          Purchaser's holdings in the Company (shares and/or warrants and/or
          options, in on an as converted basis) being reduce to less than 9%.

     7.5. Accounting
          ----------

          The Company will maintain a system of accounting established and
          administered in accordance with Israeli GAAP consistently applied,
          and will set aside on its books all such proper reserves as shall be
          required by Israeli GAAP.

     7.6. Composition of the Board
          ------------------------

          The Boards of Directors of the Company shall comprise up to eight
          (8) directors, to be nominated as follows:

          7.6.1.  Two (2) directors shall be designated and elected by the
                  holders of the Preferred B Shares, for as long as the
                  holders of the Preferred B Shares hold at least twenty
                  percent (20%) of the total issued and outstanding share
                  capital of the Company. Upon the Preferred B Shareholders'
                  being reduced to less than 20% Percent Ownership and for so
                  long as they are (i) as a result of dilution due to new
                  issuance of securities - the record holders of shares and/or
                  warrants and/or options, in either case constituting or
                  exercisable into at least five percent (5%) of the Company's
                  issued and outstanding share capital on an as converted
                  basis; or (ii) in case such reduction is the result of the
                  sale of its Preferred B Shares to any third party - the
                  record holders of shares and/or warrants and/or options, in
                  either case constituting or exercisable into at least nine
                  percent (9%) of the Company's issued and outstanding share
                  capital on an as converted basis; the number of their
                  directors shall be reduced to one director. The appointment
                  and removal of such directors and filling of any vacancy
                  with respect to such positions shall be made by a written
                  notice to the Company.

          7.6.2.  Up to six (6) Directors shall be designated by the other
                  shareholders of the Company whereby each holder, or holders,
                  as the case may be, of Ordinary Shares representing not less
                  than 12.5% of the than issued and outstanding share capital
                  of the Company, shall be entitled to elect 1 director.

          7.6.3.  The parties hereto agree that (i) the Chairman of the Board
                  (the "Chairman") shall be one of the Directors elected on
                  behalf of the holders of Preferred B Shares and (ii) each
                  Board's committee shall includes at least one board member
                  appointed by the holders of the Preferred B Shares.

     7.7. Board and Shareholders Resolutions
          ----------------------------------

          7.7.1.  Subject to any applicable law, and to the Amended Articles,
                  as applicable, all resolutions and actions of the Board of
                  Directors and of the shareholders of the Company shall be
                  taken by a majority vote. Notwithstanding the aforesaid,
                  until the consummation of an IPO of the Company, the Company
                  shall not take any of the following resolutions or actions
                  except if the directors designated by the holders of the
                  Preferred B Shares, and the holders of the Preferred B
                  Shares, consented in writing to such resolution or action
                  prior thereto: (i) the effecting of the IPO of the Company;
                  (ii) adopt any amendment of the Memorandum, or Amended
                  Articles (iii) adopt any action which would have the effect
                  of amending the specific rights, preferences or privileges
                  of the Preferred B Shares; (iv) authorize or issue any
                  equity securities of any class or other securities
                  convertible into shares of the Company, nor enter into any
                  contract or grant any option for the issue of any such
                  securities; (v) merge with or consolidate into any
                  corporation, firm or entity, or sell or otherwise dispose of
                  all or substantially all of its assets, tangible or
                  intangible; (vi) enter into voluntary liquidation or effect
                  the winding up of the Company; (vii) incur debt, that was
                  not included in the respective Annual Plan or yearly budget,
                  which exceeds the amount of US$10,000; (viii) enter into any
                  transactions with any officer, director, shareholder or
                  other Interested Party (as such term is defined in the
                  Israeli Securities Law - 1968, or any member of the family
                  or affiliate of such Interested Party, person controlled by
                  it, person under common control or person it) or any other
                  party related, directly or indirectly, to any of them; (ix)
                  increase the number of Directors above eight (8) or change
                  the manner of their designation to the Board of Directors;
                  (x) declare or pay any dividend or other distribution of
                  cash, shares, or other assets to the Company's shareholders
                  in their capacity as such; (xi) effect a fundamental change
                  in the Company's business; (xii) approve the Company's
                  yearly budget and plan; (xiii) approve and fix signatory
                  rights on behalf of the Company; and (xiv) the appointment
                  and compensation of the Company's General Manager(s), Chief
                  Executive Officer, Chief Operating Officer, Chief Technical
                  Officer and Chief Financial Officer.

          7.7.2.  In the event that the Board of Directors of the Company is
                  unable to reach a majority with respect to the following
                  issues, the Chairman shall have the casting vote: (i)
                  approval of the budget of the Company; (ii) the issuance of
                  any debt or equity securities by the Company; (iii) any
                  proposed change in the Line of Business of the Company; (iv)
                  approve and fix signatory rights on behalf of the Company;
                  and (v) any proposal for the Company to enter into an
                  agreement to merge into, acquire, or be acquired by, another
                  company, provided, however, that such company is not owned
                  or controlled by the Preferred B Shareholders.

     7.8. Information Rights
          ------------------

          The Company will permit the holders of Preferred B Shares or their
          authorized representatives, upon reasonable prior notice, at all
          reasonable times during normal business hours and as often as
          reasonably requested, to visit and inspect any of the properties of
          the Company, including its books and records and lists of security
          holders, and to make extracts therefrom and to discuss the affairs,
          finances and accounts of the Company with its officers, provided,
          however, that any inspections of books and records made by the
          holders of Preferred B Shares in accordance with the procedures of
          this Section 7.8 shall be approved by, and made together with, one
          member of the Board of Directors.

          The Company will promptly advise the holders of Preferred B Shares
          in writing of each suit or proceeding commenced or threatened
          against the Company which, if adversely determined, would result in
          a material adverse effect on the Company, whether on its business
          and financial condition, or otherwise.

          The Company will also furnish to the holders of Preferred B Shares
          with reasonable promptness such other information and data with
          respect to the Company as the holders of Preferred B Shares, may
          from time to time reasonably request.

     7.9. Certain Transfers
          -----------------

          In the event that any person or entity makes an offer to purchase
          all of the issued and outstanding share capital of the Company or to
          merge the Company with or into another entity, and shareholders
          holding more than 75% of the issued and outstanding share capital of
          the Company on an as converted basis indicate their acceptance of
          such offer and such offer is approved by a majority of the Board of
          Directors, then, at the closing of such offered purchase of all the
          issued and outstanding capital stock of the Company or merger, all
          of the holders of Ordinary Shares and Preferred Shares in the
          Company will transfer such Ordinary Shares or Preferred Shares to
          such person or entity; provided, however, that the consideration for
          all of the Company's share capital shall in any event be allocated
          among the members in accordance with the applicable provisions of
          the Amended Articles (for the sake of clarity, the term Preferred
          Shares, as used in this Agreement refers to both Series A and
          Preferred B Shares collectively).

     7.10. Pre-emptive Rights; Rights of First Refusal, Tag Along etc.
           -----------------------------------------------------------

          Except for a transfer of shares by a shareholder to its Permitted
          Transferee(s), as such term is defined in the Amended Articles, any
          issuance or transfer of shares of the Company shall be subject to
          the pre-emptive rights, rights of first refusal, Tag Along and other
          rights of the Preferred B Shareholders and other shareholders (when
          applicable) as set forth in the Amended Articles.

     7.11. Restrictions on Sales
           ---------------------

          As long as the Preferred B Shares represents not less than 15% in
          the share capital of the Company (on a full dilution basis taking
          into consideration the Preferred B Shares covered by the Warrants),
          each of the Founders hereby undertakes not to sell, assign,
          transfer, pledge, hypothecate, mortgage or dispose of, by gift or
          otherwise, or in any way encumber any of their shares in the Company
          (or in companies under their control which are shareholders in the
          Company) for a period of three (3) years following the Closing,
          other than with the consent of the holders of Preferred B Shares.
          Any transfers after the aforementioned periods of restriction, shall
          be subject to the restrictions, if any, set forth in the Articles of
          Association of the Company as shall be in effect following the
          Closing.

          Upon the Preferred B Shares being reduced to 5% - 15% in the share
          capital of the Company, the Founders shall be entitled to sell up to
          one third of their shares in the Company.

          The restrictions provided in this Section 7.11 shall terminate (A)
          upon the consummation of an IPO to the Company or in case whereby
          the Company shall merge into, acquire, or be acquired by, another
          company; or (B) with respect to each Founder, upon the termination
          other than for "Cause" (as such term is defined in each Founder's
          employment agreement) by the Company of such Founder's employment
          with the Company (in accordance with such Founder's employment as
          shall then be effect with the Company).

    7.12. Right of Co-Sale
          ----------------

          7.12.1. From and after a period of three (3) years from the Closing,
                  should any of the Founders (in each case, the "Offeree")
                  receive one or more bona fide offers (collectively, the
                  "Offer"), from any person or entity (the "Offeror") to
                  purchase from the Offeree any of the shares in the Company
                  owned by the Offeree, which Offer the Offeree intends to
                  accept, such Offeree shall promptly notify the holders of
                  Preferred B Shares in writing of the name and address of the
                  Offeror and terms and conditions of such Offer. In the event
                  that the holders of Preferred B Shares, or part thereof,
                  wish to join in the sale (the "Selling Holders of Preferred
                  Shares"), they shall notify the Offeree thereof in writing,
                  with a copy to the Company, within fifteen (15) business
                  days of receipt by them of the copy of the Offer. If no such
                  notice is received by the Offeree within the specified time,
                  the Offeree(s) shall be under no restriction with respect to
                  the sale of the shares to the Offeror. If the Offeree
                  receives notice from the Selling Holders of Preferred B
                  Shares that they wish to join in the sale, then the Offeree
                  shall not sell any shares to the Offeror unless the Offeror
                  agrees to purchase from the Selling Holders of Preferred B
                  Shares such percentage of the shares being offered under the
                  Offer, as is equal to the Selling Holders of Preferred B
                  Shares percentage shareholding of the issued and outstanding
                  share capital of the Company. The restrictions provided in
                  this Section 7.12.1 shall terminate, with respect to each
                  Founder, upon the termination other than for "Cause" (as
                  such term is defined in each Founder's employment agreement)
                  by the Company of such Founder's employment with Company (in
                  accordance with such Founder's employment as shall then be
                  effect with the Company).

          7.12.2. In the event of a proposed acquisition of shares of the
                  Company which constitute over 50% but less than 100% of the
                  Company's issued share capital by a purchaser which operates
                  and competes in the Line of Business of the Company in the
                  same geographical and customer markets in which the Company
                  operates and competes, the holders of the Preferred Shares
                  shall not sell any of the Preferred Shares subject to said
                  acquisition, unless such purchaser agrees to purchase
                  concurrently from the holders of the Preferred Shares, a pro
                  rata portion of the shares of the Founders, as reflects the
                  ratio between the percentage of issued stock of the Company
                  held at such time by the contemplated sellers and the
                  percentage of issued shares of the Company held by the
                  Founders.

          7.12.3. The provisions of Sections 7.11 and 7.12 shall not derogate
                  from any right of first refusal to purchase shares being
                  offered for sale pursuant this Agreement or the Company's
                  Articles of Association as may be in effect from time to
                  time.

     7.13. Registration Rights
           -------------------

          The shareholders of the Company shall have the registration rights
          set forth in Schedule 7.13 attached hereto.

8.   RIGHTS OF PREFERRED B SHARES
     ----------------------------

     The Company, Shareholders and the Founders covenant that the Preferred B
     Shares shall have, inter alia, the following rights and privileges, as
     more fully set forth in the Amended Articles:

     8.1. Liquidation Preference
          ----------------------

          8.1.1.  In the event of: (i) any dissolution or liquidation of the
                  Company; or (ii) the appointment of a receiver or liquidator
                  with respect to all or substantially all of the Company's
                  assets: (A) the holders of the Preferred B Shares at such
                  event, shall be entitled to receive, prior to and in
                  preference to any payments to any of the holders of any
                  other classes of shares of the Company, in full, the U.S.
                  Dollar amount paid for such Preferred B Shares plus interest
                  on such amount of 10% per year (the "Preferred B Preference
                  Amount"). If the assets thus distributed among the holders
                  of the Preferred B Shares shall be insufficient to permit
                  the payment to such holders of the full Preferred B
                  Preference Amount, then the entire assets available for
                  distribution shall be distributed pro-rata among the holders
                  of the Preferred B Shares in proportion to the Preferred B
                  Preference Amount each such holder would otherwise have been
                  entitled to receive; and (B) after payment to holders of
                  Preferred B Shares of the Preferred B Preference Amount,
                  prior to and in preference to any distribution of the entire
                  remaining assets and funds of the Company legally available
                  for distribution, if any, to the holders of all other
                  classes of shares, Isratech shall be entitled to receive in
                  full, the US Dollar amount paid by Isratech for each of the
                  Ordinary A Shares, held by Isratech at that time (the
                  aggregate amount shall be not more than USD 1,000,000), plus
                  interest on such amount of 4% per year (the "Isratech
                  Preference Amount") (which collectively together with the
                  Preferred B Preference Amount shall be hereinafter referred
                  to as the "Preference Amount"); and (C) after payment to the
                  holders of the Preferred B Shares and Israetech of the
                  respective Preference Amounts, the entire remaining assets
                  and funds of the Company legally available for distribution,
                  if any, shall be distributed ratably to the holders of all
                  Ordinary Shares, Ordinary A Shares and Preferred B Shares
                  (treating the Preferred B Shares on an as converted basis),
                  in each case in proportion to the nominal value of the
                  shares then held by them.

     8.2. Event of Deemed Liquidation
          ---------------------------

          8.2.1.  Upon the sale by the Company of all or substantially all of
                  its assets in consideration for cash, ("Event of Deemed
                  Liquidation"), the holders of Preferred B Shares shall be
                  entitled, in accordance with provisions as more fully
                  described in the Amended Articles, to treat the Event of
                  Deemed Liquidation as a dissolution or liquidation (as
                  referred to in Section 8.1 above), and shall entitle the
                  shareholders of the Company to receive at the closing of
                  such Event of Deemed Liquidation, in cash, securities or
                  other property (valued as provided in the Amended Articles)
                  amounts, in accordance with Section 8.1 above, as
                  applicable, as if all consideration being received by the
                  Company and its shareholders in connection with such Event
                  of Deemed Liquidation were being distributed in a
                  dissolution or liquidation.

     8.3. Conversion of Preferred Shares
          ------------------------------

          Each Preferred B Share and Ordinary A Share shall be convertible
          into one Ordinary Share. Initially, the conversion ratio shall be
          one-to-one, but such conversion ratio shall be adjusted in
          accordance with any recapitalization event.

          Each Preferred B Share, or Ordinary A Share as the case may be,
          shall be convertible into Ordinary Shares as aforesaid at any time,
          at the discretion of the holder of such Preferred B Share, or
          Ordinary A Share as the case may be, and automatically (i) upon a
          decision of the holders of at least 85% of the voting power of the
          Preferred B Shares to convert the Preferred B Shares; and (ii) at
          immediately prior to the consummation of the IPO of the Company, to
          the extent that such conversion is required by the underwriter as a
          condition to the IPO.

     8.4. Anti-Dilution.
          --------------

          Until the consummation of an IPO of the Company, if the Company
          issues Additional Shares at a price per share lower than the price
          per share paid by the Purchaser for each Preferred B Share, the
          Company shall immediately issue the holders of Preferred B Shares
          sufficient additional Preferred B Shares, for no additional
          consideration, as if the Purchaser had made their investment based
          on such lower price (Full Ratchet adjustment), all upon the terms as
          more fully set forth in the Amended Articles. For the purpose of
          this Section, the term "Additional Shares" shall mean any shares
          issued by the Company other than: (i) shares issued to employees,
          officers, consultants or directors of the Company, which are also
          employees, officers, consultants or directors of the Purchaser,
          under an Employee Stock Option Plan including future option plans to
          which the Purchaser shall agree in accordance to the terms of this
          Agreement; (ii) shares issued upon conversion of existing Preferred
          B Shares; (iii) shares issued due to a recapitalization of the
          Company's share capital; or (iv) shares issued to an investor who is
          deemed by the Board of Directors as a strategic partner or investor
          with added value to the Company and/or its activities and/or the
          marketing of its products ("Strategic Investor"); or (v) an issuance
          to existing holders of Preferred B Shares.

          Subject to the above and other terms and conditions of this
          Agreement, in case the Company shall issue shares, or options to
          purchase shares, to its employees, officers, consultants or
          directors (which are not employees, officers, consultants or
          directors of the Purchaser) under an Employee Stock Option Plan
          including future option plans to which the Purchaser shall agree in
          accordance to the terms of this Agreement ("Employees Issuance"),
          the Company shall immediately issue the holders of Preferred B
          Shares sufficient additional Shares, warrants or options, as the
          case may be, for no additional consideration, identical in numbers
          and terms to those issued under the Employee Issuance.

9.   CONFIDENTIALITY; NON-COMPETITION
     --------------------------------

     9.1. From time to time, the Parties may make available to each other, in
          written form or orally, information of a confidential and
          proprietary nature including, but not limited to, technical, test
          and analysis data, specifications, prototypes, marketing,
          application, financial, bookkeeping, business, and customer
          information. The Parties shall not disclose such information to
          others or use such information without the prior written consent of
          the disclosing party, except as necessary to carry out the terms of
          this Agreement. Each party shall treat such information with the
          same care as it would exercise in the handling of its own
          confidential or proprietary information and in no event shall such
          information be disclosed to any person including employees,
          consultants and/or contractors unless such individual undertakes to
          be bound by the terms of this Section 9.1.

     9.2. Upon termination of a party's participation in the Company, whether
          by termination of employment or other engagement (including
          directorship) or by the termination of a party's shareholdings for
          any reason, all such data, proprietary information and confidential
          information of the disclosing party shall be immediately returned by
          the other party to the disclosing party and the limitations and
          undertakings specified in this Section 9 shall survive the date of
          such termination of participation.

     9.3. Confidential information as referred to in this Section shall not
          include information: (i) which is or becomes public knowledge
          through no fault of the receiving party; (ii) which is known to the
          receiving party at the time of disclosure by the disclosing party,
          as evidenced by the receiving party's written records; (iii) which
          is disclosed to the receiving party on a non-confidential basis by a
          third party having no obligation of secrecy to the disclosing party;
          or (iv) information required to be disclosed by law, rule or
          regulation, provided that prior notice of disclosure is given to the
          disclosing party. For avoidance of doubt, the parties agree that
          disclosure or public discussion of information not considered
          confidential hereunder shall not be made unless it is in the
          Company's best interest.

     9.4. As long as any of the Founders and Shareholders hold shares in the
          Company and for a period of 24 months thereafter (and with respect
          to the Founders, directors, officers, or employees or agents of the
          Company, 24 months from the termination of its nomination), it shall
          not be actively engaged directly or indirectly (except as a passive
          shareholder) either for remuneration or not in any business which
          competes with the Company, its subsidiary or parent company.

10.  Shareholders Agreement
     ----------------------

     10.1. Waivers and Consents. The Company, the Founders, the Ordinary A
           --------------------
           Shareholders and the other Shareholder (where applicable) hereby
           agree to waive any rights that they may have, whether pursuant to
           any shareholders agreement, the Articles of Association of the
           Company in effect immediately prior to the Closing Date (the
           "Former Articles") or otherwise, with respect to the issuance of
           the Preferred B Shares, Warrants and the Preferred B Shares
           underlying the Warrants, to the Purchaser. Furthermore, the
           Company, the Founders, the Ordinary A Shareholders and the other
           Shareholder hereby consent to all of the transactions contemplated
           pursuant to this Share Purchase Agreement.

     10.2. New Shareholders Agreement. The Company, the Founders, the Ordinary
           --------------------------
           A Shareholders and the other Shareholder (where applicable) hereby
           terminate any shareholders agreement they had or have prior to the
           Closing Date. Immediately after the consummation of the transaction
           contemplated by this Agreement, the Parties agree to be bound by
           the terms and conditions of this Agreement and the Amended Articles
           of Association.

11.  MISCELLANEOUS
     -------------

     11.1. Expenses
           --------

          The Company will pay from the proceeds hereof, at the Closing all
          expenses for legal fees and out-of-pocket disbursements of the
          Purchaser for work performed, by its legal counsels and /or
          advisors, in completing the documentation relating to this
          transaction up to US$ 35,000 (excluding VAT).

          The Company will pay all expenses for legal fees and out-of-pocket
          disbursements of the Company for work performed, by its legal
          counsel and/or advisors in completing the documentation relating to
          this transaction up to US$ 15,000 (excluding VAT).

     11.2. Further Assurances
           ------------------

          Each of the parties hereto shall perform such further acts and
          execute such further documents as may reasonably be necessary to
          carry out and give full effect to the provisions of this Agreement
          and the intentions of the parties as reflected thereby.

     11.3. Governing Law; Jurisdiction
           ---------------------------

          This Agreement shall be governed by and construed according to the
          laws of the State of Israel without regard to the conflict of laws
          provisions thereof. Any and all differences and disputes arising
          under this Agreement shall be submitted to the jurisdiction of the
          competent Courts in Tel-Aviv.

     11.4. Successors and Assigns; Assignment
           ----------------------------------

          Except as otherwise expressly limited herein, the provisions hereof
          shall inure to the benefit of, and be binding upon, the successors,
          assigns, heirs, executors, and administrators of the parties hereto.
          None of the rights, privileges, or obligations set forth in, arising
          under, or created by this Agreement may be assigned or transferred
          without the prior consent in writing of each party to this
          Agreement, with the exception of assignments and transfers from the
          Purchaser or Founders to any other entity which fully controls, or
          is fully controlled by such Purchaser or Founders.

     11.5. Entire Agreement; Amendment and Waiver
           --------------------------------------

          This Agreement and the Schedules hereto and any agreements
          contemplated herein and therein constitute the full and entire
          understanding and agreement between the parties with regard to the
          subject matters hereof and thereof. Any term of this Agreement may
          be amended and the observance of any term hereof may be waived
          (either prospectively or retroactively and either generally or in a
          particular instance) only by written agreement of each of the
          parties hereto.

     11.6. Notices
           -------

          All notices and other communications required or permitted hereunder
          to be given to a party to this Agreement shall be in writing and
          shall be telecopied or mailed by registered or certified mail,
          postage prepaid, or otherwise delivered by hand or by messenger,
          addressed to such party's address as set forth below or at such
          other address as the party shall have furnished to each other party
          in writing in accordance with this provision:

-------------------------------------------------------------------------------

          if to a Purchaser to:               if to the Company or the
                                              Founders to:
          Aryt Industries Ltd.
                                              Sensotech Ltd.
          7 Haplada St.
                                              6 Odem St.
          Or Yehuda, 60218
                                              Petach-Tikva, Israel
          Tel.: (03) 538-8604
                                              Facsimile: (03) 921-3404
          Fax: (03) 533-9223
-------------------------------------------------------------------------------

          or such other address with respect to a party as such party shall
          notify by ten (10) days advance written notice to each other party
          in writing as above provided. Any notice sent in accordance with
          this Section shall be effective: (i) if mailed, five (5) business
          days after mailing; (ii) if sent by messenger, upon delivery; and
          (iii) if sent via telecopier, upon transmission and telephone
          confirmation of receipt or (if transmitted and received on a
          non-business day) on the first business day following transmission
          and telephone confirmation of receipt.

     11.7. Due Diligence
           -------------

          The Purchaser confirms that it is entering into this Agreement after
          it has conducted due diligence based only on the Company's and
          Founders' representations and warranties stated herein and the
          Schedules attached to this Agreement and in reliance thereon. It is
          clarified that other than the Company's and Founders'
          representations and warranties stated herein and the Schedules
          attached to this Agreement, the Purchaser did not receive, and it is
          not relying on, any other representations, warranties or documents.

     11.8. Delays or Omissions
           -------------------

          No delay or omission to exercise any right, power, or remedy
          accruing to any party upon any breach or default under this
          Agreement, shall be deemed a waiver of any other breach or default
          theretofore or thereafter occurring. Any waiver, permit, consent, or
          approval of any kind or character on the part of any party of any
          breach or default under this Agreement, or any waiver on the part of
          any party of any provisions or conditions of this Agreement, or any
          waiver on the part of any party of any provisions or conditions of
          this Agreement, must be in writing and shall be effective only to
          the extent specifically set forth in such writing. All remedies,
          either under this Agreement or by law or otherwise afforded to any
          of the parties, shall be cumulative and not alternative.

     11.9. Severability
           ------------

          If any provision of this Agreement is held by a court of competent
          jurisdiction to be unenforceable under applicable law, then such
          provision shall be excluded from this Agreement and the remainder of
          this Agreement shall be interpreted as if such provision were so
          excluded and shall be enforceable in accordance with its terms;
          provided, however, that in such event this Agreement shall be
          interpreted so as to give effect, to the greatest extent consistent
          with and permitted by applicable law, to the meaning and intention
          of the excluded provision as determined by such court of competent
          jurisdiction.

     11.10. Counterparts
            ------------

          This Agreement may be executed in any number of counterparts, each
          of which shall be deemed an original and enforceable against the
          parties actually executing such counterpart, and all of which
          together shall constitute one and the same instrument.

<PAGE>

IN WITNESS WHEREOF, the parties have signed this Agreement, in one or more
counter pages, as of the date first hereinabove set forth.

SENSOTECH LTD.                                       ARYT INDUSTRIES LTD.
By:  /s/  Eli Gal                                    By:  /s/  Schmuel Bachar
     ------------                                        --------------------
     /s/  Uri Agam                                   By: /s/  Ram Eckhaus
     -------------                                       ----------------
Title: ____________                                  Title: ___________________

<PAGE>

IN WITNESS WHEREOF, the parties have signed this Agreement, in one or more
counter pages, as of the date first hereinabove set forth.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------

                               ELI GAL                        URI AGAM

-----------------------------------------------------------------------------------------------
<S>                           <C>                            <C>

Shlomit Gal                    Ilana Agam                     Yehuda Shaphir

-----------------------------------------------------------------------------------------------
Nichsei Uri                    Nichsei Eli

By:  /s/  Uri Agam             By:  /s/  Eli Gal
     -------------                  ------------
Title: ________________        Title: ________________        Reuven Bachar

-----------------------------------------------------------------------------------------------
                                                              Isratech LP
Ben-Zion Markovitz             Ami Mor                        By: /s/  Zwi Vromen
                                                                  ---------------
                                                              Title: ________________

-----------------------------------------------------------------------------------------------
Isratech LLC                   Isratech Fund
By: /s/  Zwi Vromen            By: /s/  Zwi Vromen            _______ Katz
    ---------------                ---------------
Title: ________________        Title: ________________

-----------------------------------------------------------------------------------------------

Dov Pakelman                   Frod Askim                     Sofer

-----------------------------------------------------------------------------------------------

Cohen                          Taub                           Roni Archus

-----------------------------------------------------------------------------------------------
Chag Abdul                     Loyaltech                      Yosi Fish
                               By: /s/
                                   ---
                               Title: ________________

-----------------------------------------------------------------------------------------------
</TABLE>

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