Document:

EXCLUSIVE LICENSE AGREEMENT

This Agreement  (together with the Exhibit hereto "THIS  AGREEMENT") is made and
shall become  effective  as of February  18, 2004 by and between  Unicorp Ltd. a
company  organized  under the laws of Israel ( "THE  COMPANY"),  Cat4view Ltd. a
company organized under the laws of Israel ("CAT4VIEW"),  and Technoprises Apros
& Chay Ltd.  ("TECHNOPRISES") a company organized under the laws of Israel ("THE
LICENSEE").

WHEREAS the Company is the owner of all rights in the company's  Watchow Portal,
as specified in EXHIBIT A hereto ("THE WATCHOW  PORTAL") and the Company has the
sole right to license the Watchow Portal to the Licensee; and

WHEREAS in conjunction with the foregoing, the Company desires to grant, and the
Licensee desire to receive, a sole and exclusive,  worldwide,  irrevocable,  and
perpetual  license,  for the use of the  Watchow  Portal in any manner  that the
Licensee's elects, all according to the terms of this Agreement.

WHEREAS  Cat4view  provides  maintenance and operation  services for the Watchow
Portal  ("THE  MAINTENANCE  SERVICES")  and in  conjunction  with the  foregoing
Cat4view wishes to transfer, and the Licensee wishes to receive, Cat4view's know
how  related  to the  Maintenance  Services  so that the  Licensee  may  provide
Maintenance  Services for the Watchow Portal on its own,  following the grant of
the license by the Company; and

NOW THEREFORE,  in consideration of the mutual  representations,  warranties and
covenants contained herein, and for other good and valuable  consideration,  the
Company,  Cat4view,  and the Licensee ("THE  PARTIES"),  intending to be legally
bound, hereby agree as follows:

1.    Definitions

"INTELLECTUAL  PROPERTY RIGHTS" includes worldwide rights, whether registered or
not, under any copyright, trademark, service mark, patent and integrated circuit
protection laws, rights in domain and sub-domain names, trade secrets, know-how,
rights  against  misappropriation  of databases  and  confidential  information,
including but not limited to technology, ideas, algorithms,  testing procedures,
structure,  interfaces,  documentation,  problem  reports,  drawings  and  other
technical, marketing and financial information.

2.    Grant of License to use the Watchow Portal

      2.1.  Upon the  terms  and  subject  to the  conditions  set forth in this
            Agreement,  the  Company  hereby  grants to the  Licensee a sole and
            exclusive, worldwide,  irrevocable, and perpetual license to use the
            Watchow  Portal  in any  manner  that  the  Licensee  desires  ("THE
            LICENSE").  Following the execution of this  Agreement and the grant
            of the License the Company  shall not use the Watchow  Portal in any
            manner,  whether by itself or by granting licenses to third parties.
            To avoid any doubt, the Licensee may make any  modifications  and/or
            transfer the Watchow Portal without any permission of the Company.

      2.2.  The Licensee shall be entitled to make,  use, sell,  offer for sale,
            lease, implement, apply for patents, adapt and otherwise exploit the
            Watchow Portal as the Licensee deems fit.

      2.3.  The Company  reserves  the right to display the Watchow  Portals for
            self-promotional  purposes  but  not  to use  it in  any  manner  or
            distribute it to third parties.

3.    Transfer of Maintenance Services' Know How

Upon the terms  and  subject  to the  conditions  set  forth in this  Agreement,
Cat4view hereby commits to transfer to the Licensee all know-how  related to the
provision of  Maintenance  Services for the Watchow  Portal so that the Licensee
may be able to provide  Maintenance  Services for the Watchow Portal on its own.
Cat4view  shall  provide all  assistance  needed by the  Licensee for such task.
Until the  Licensee  determines  that it is fully  able to  provide  Maintenance
Services by itself, Cat4view shall continue to provide Maintenance Services, and
shall support the Licensee thereafter.

<PAGE>
                                       2

4.    Delivery

The Company will make the Watchow  Portal  available to the Licensee  within one
day as of the  effective  date of this  Agreement  and shall supply the Licensee
with all the reasonably required support to utilize the Watchow Portal.

5.    Consideration

      5.1.  In consideration  for the License grant and the transfer of the know
            how for the Maintenance Services, the Licensee shall pay the Company
            and Cat4view  royalties of 5% of the gross  revenues  generated from
            use of the Watchow Portal, including (i) licensing agreements signed
            between the Licensee and third parties;  and (ii) Original Equipment
            Manufacturer  (OEM) agreements signed between the Licensee and third
            parties  ("THE  ROYALTIES").  The Company  shall  receive 85% of the
            Royalties  and  Cat4view  shall  receive  the  remaining  15% of the
            Royalties. The Royalties shall be calculated for every three months'
            period starting as of the date of signature of This  Agreement,  and
            paid on the 1st  day of the  month  following  the  end  every  such
            period.  Notwithstanding  the above, the maximum amount of the total
            royalties paid by the Licensee shall not exceed $2,500,000.

      5.2.  Notwithstanding  the  abovementioned  consideration  in section  5.1
            above,  the  Company may elect for itself and for  Cat4view,  at its
            sole  discretion,  to be made no  later  then  180  days  after  the
            signature  of  this  Agreement,   to  replace  the  above  mentioned
            consideration  with the issuance of shares as follows:  The Licensee
            shall cause its subsidiary,  Telem Atik Cross Media Ltd. ("TCM"),  a
            private company  incorporated under the laws of the state of Israel,
            to issue shares to the Company and Cat4view for their  nominal value
            so that  following  the  issuance  the Company  will hold 17% of the
            share  capital of TCM and Cat4view will hold 3% of the share capital
            of TCM.  The TCM  Shares  shall be issued  "as is" and the  Licensee
            gives no warranties in their regards. The licensee shall not pay the
            Company  nor  Cat4view  any  royalties,  fees or any  other  kind of
            additional  consideration  for the  grant  of the  License,  and the
            provisions of Section 5.1 shall not apply.

6.    Mutual Warranties, Representations and Indemnities

      6.1.  The  Company  represents  and  warrants  that it is the owner of all
            rights in the Watchow Portal,  Cat4view represents and warrants that
            it is the owner of all rights in the  know-how  for  Watchow  Portal
            maintenance services,  free and clear of any encumbrance,  charge or
            restriction.  The Company and Cat4view further represent and warrant
            that to their best knowledge no consent,  approval or  authorization
            of, or filing  with any public or  governmental  body is required in
            connection with the execution and delivery of this Agreement.

      6.2.  The Company and Cat4view  represent and warrant,  each  respectively
            for  Watchow   Portal  and  for  the  know-how  of  Watchow   Portal
            maintenance  services,  that they  have the sole  right to grant the
            License to the Licensee in accordance  with the terms and conditions
            set  forth  in  this  Agreement,  and  that  to  the  Company's  and
            Cat4view's best knowledge such License and the exercise thereof does
            not and will not  infringe on or  misappropriate  any third  party's
            proprietary rights as of the effective date of this Agreement.

      6.3.  The Company and Cat4view hereby  represent and warrant that they are
            not aware of any third party patent rights,  which will be infringed
            by  the  Licensee's  use  in  accordance  with  the  terms  of  This
            Agreement.

      6.4.  The Company  represents and warrants that the license of the Watchow
            Portal may involve certain risk factors, as summarized in EXHIBIT A.

      6.5.  The  Company  will  immediately  advise  the  Licensee  of any legal
            notices  served to the Company that might  reasonably be anticipated
            to affect  the  Licensee.  The  Company  shall not settle any action
            brought  against the Company,  regarding its  Intellectual  Property
            Rights in the Watchow Portal,  unless received the Licensee's  prior
            written  approval,   and  shall  coordinate  its  defense  with  the
            Licencee.

<PAGE>
                                       3

      6.6.  The Licensee  warrants that it shall not use the Watchow  Portal for
            illegal  purposes and that it is  authorized  and  empowered to make
            this Agreement.

      7.    Intellectual Property Rights and Other Rights

      7.1.  The Company declares that it is the owner of the Watchow Portal, its
            concept, design, brand name and website.

      7.2.  Cat4vew  declares  that it is the owner of the  know-how  of Watchow
            portal's maintenance services.

8.    Confidentiality

Each party shall treat as confidential  all information of the other party which
is confidential by its nature ("CONFIDENTIAL  INFORMATION"),  shall not use such
Confidential   Information  except  to  exercise  its  rights  and  perform  its
obligations   under  this  Agreement   herein,   and  shall  not  disclose  such
Confidential  Information  to any third party.  Without  limiting the foregoing,
each of the  parties  shall  use at  least  the same  degree  of care it uses to
prevent the disclosure of its own  confidential  information of like importance,
to prevent the disclosure of Confidential  Information of the other party.  Each
party shall promptly notify the other party of any actual or suspected misuse or
unauthorized disclosure of the other party's Confidential Information.

9.    Term and Termination

The License  under this  Agreement is perpetual and shall be in force and effect
unless terminated in accordance with the provisions of the law.

10.   Miscellaneous

      10.1. This  Agreement  binds  and  will  benefit  the  Parties  and  their
            respective  successors and assigns.  This Agreement  constitutes the
            entire  understanding  of the Parties,  supersedes all prior oral or
            written Agreements between the parties,  and may be modified only in
            writing by signature of the parties.

      10.2. No waiver of any provision of this  Agreement in any instance  shall
            for any  purpose  be deemed to be a waiver of the right of any party
            hereto to enforce strict  compliance  with the provisions  hereof in
            any subsequent instance.

      10.3. This  Agreement  shall  be  governed  and  enforced  exclusively  in
            accordance  with the laws of the  State of  Israel  in all  respects
            including its construction, interpretation and performance. The sole
            and exclusive venue for resolution of any dispute in respect to this
            Agreement  shall be in Tel-Aviv,  Israel.  If any  provision of this
            Agreement  shall be held invalid or  unenforceable,  such invalidity
            shall not affect the validity or  operation of any other  provision,
            and such invalid  provision  shall be deemed to be severed from this
            Agreement.

IN WITNESS WHEREOF the Parties hereto have executed this Agreement

-----------------------------------     ----------------------------------------
THE COMPANY                             THE LICENSEE

by: ______________title:_____________   by: _____________title: _____________
date:                                   date:

CAT4VIEW

by: ______________title:_____________
date:

<PAGE>
                                       4

EXHIBIT A

SPECIFICATIONS OF THE WATCHOW PORTAL AND RISK FACTORS

Introduction

Watchow  is a  global  IP  (Internet  Protocol)  and TV  portal  that  offers  a
comprehensive  branded  network of  properties  and  services to  consumers  and
businesses worldwide. As an online access to the cross-media, www.watchow.com is
a leading  concept  desktop in terms of  multi-devices  access,  Personal  video
recording On Line,  household and business  cross-media  user access.  Watchow's
global brand intends to reach the largest audience  worldwide.  Watchow is a new
template for leading providers of comprehensive  online products and services to
consumers and businesses worldwide.

DETAILS

Domain Name: WATCHOW.COM

Registrar: NETWORK SOLUTIONS, INC.

Whois Server: whois.networksolutions.com

Referral URL: http://www.networksolutions.com

Name Server: NS2.AMEN.FR

Name Server: PARIS.AMEN.FR

Status: ACTIVE

Updated Date: 15-feb-2004

Creation Date: 08-apr-2003

Expiration Date: 08-apr-2005

The Pre-Made Watchow

The pre-made  Watchow is part of the Watchow  Portal.  It is a template  concept
that the Licensee can use to create its own Visual aggregations by simply adding
the  Licensee's  company  name to the frame,  through any  graphics  and players
program,  or by web development to customize the concept for the Licensee and or
for its clients.

<PAGE>
                                       5

INTELLECTUAL PROPERTY RIGHTS

The Watchow Portal includes all Intellectual  Property Rights related to the the
Watchow Portal. However, all marks, graphics, logos, page headers, button icons,
and  scripts  of third  parties  that  appear on Watchow  Portal's  site are the
property of their respective owners.

RISK FACTORS

Watchow concept compete with many other concept providers of online  navigation,
Web search, IP TV provider, information,  entertainment,  business, recruitment,
community, electronic commerce, and Internet access services. As Watchow expands
the scope of IP DVB TV  offerings,  the Licensee  will compete  directly  with a
greater  number of internet  sites,  media  companies,  and companies  providing
business services across a wide range of different online services, including:

      o     companies   offering   communications,   web  searches,   commercial
            searches,  information,  community  and  entertainment  services and
            internet  access  either on a stand alone basis or  integrated  into
            other products and media properties;

      o     vertical  markets  in  which  competitors  may  have  advantages  in
            expertise,   brand  recognition,   available   financial  and  other
            resources, and other factors;

      o     online employment recruiting companies; and

      o     online merchant hosting services.

In order to compete  effectively,  the Licensee  may need to expend  significant
internal  engineering  resources or acquire other  technologies and companies to
provide or enhance  Watchow  capabilities.  If Licensee is unable to maintain or
expand its customer and user base in the future, Watchow revenues may decline.SECURITIES PURCHASE AGREEMENT

      THIS  SECURITIES  PURCHASE  AGREEMENT,  dated as of April 16,  2004  (this
"Agreement"),  is entered into by and between BVR TECHNOLOGIES  LTD., an Israeli
corporation  with  headquarters  located at Raoul Wallenberg 12, Ramat Hachayal,
Tel Aviv, Israel 69719 (the "Company"), and each individual or entity named on a
signature page hereto (as used herein, each such signatory is referred to as the
"Buyer") (each  agreement  with a Buyer being deemed a separate and  independent
agreement   between  the  Company  and  such  Buyer,   except  that  each  Buyer
acknowledges  and consents to the rights  granted to each other Buyer [each,  an
"Other Buyer"] under such agreement and the Transaction  Agreements,  as defined
below, referred to therein).

                              W I T N E S S E T H:

      WHEREAS,  the  Company and the Buyer are  executing  and  delivering  this
Agreement in accordance  with and in reliance upon the exemption from securities
registration for offers and sales to accredited investors afforded,  inter alia,
by Rule 506 under  Regulation D  ("Regulation  D") as  promulgated by the United
States  Securities and Exchange  Commission (the "SEC") under the Securities Act
of 1933, as amended (the "1933 Act"), and/or Section 4(2) of the 1933 Act; and

      WHEREAS,  the Buyer  desires to purchase and the Company  desires to sell,
upon the terms and conditions set forth in this Agreement,  the number of shares
specified  on the  Buyer's  signature  page of this  Agreement  (the  "Purchased
Shares") of the Company's Ordinary Shares,  nominal value NIS 0.01 each ("Common
Stock"), in consideration for the payment by Purchaser to the Company of US$0.10
per share (the "Per Share Purchase Price"), or the aggregate amount specified on
the Buyer's signature page (the "Purchase Price"); and

      WHEREAS,  in  connection  with the  Purchaser's  purchase of the Purchased
Shares, the Company will issue to the Purchaser the Warrants (as defined below),
which  Warrants may be exercised for the purchase of shares of Common Stock (the
"Warrant Shares");

      NOW THEREFORE,  in  consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

      1. AGREEMENT TO PURCHASE; PURCHASE PRICE.

      A. PURCHASE OF  SECURITIES.  On the Closing Date (as defined  below),  the
Company  shall sell and deliver to the Buyer,  and the Buyer  agrees to purchase
from the  Company,  the  Purchased  Shares and the Warrants  (collectively,  the
"Purchased  Securities") in consideration  for the Purchase Price. The aggregate
Purchase Price of all Buyers is US$2,250,000 (the "Total Purchase Price").

<PAGE>

      B. CERTAIN  DEFINITIONS.  As used herein,  each of the following terms has
the meaning set forth below, unless the context otherwise requires:

      "Affiliate"  means,  with respect to a specific  Person referred to in the
relevant provision,  another Person who or which controls or is controlled by or
is under common control with such specified Person.

      "Buyer's  Allocable  Share" means the fraction,  of which the numerator is
the Buyer's Purchase Price and the denominator is the Total Purchase Price.

      "Certificates"  means  (i) the  certificates  representing  the  Purchased
Shares and (ii) the  relevant  Warrants,  each duly  executed by the Company and
issued on the Closing Date in the name of the Buyer.

      "Closing  Price" shall mean the 4:00 P.M.  closing bid price of the Common
Stock (in U.S.  Dollars) on the Principal Trading Market on the relevant Trading
Day(s), as reported by the Reporting Service.

      "Closing  Date" means the date of the closing of the  purchase and sale of
the Purchased Securities.

      "Company Control Person" means each director, executive officer, promoter,
and such other  Persons as may be deemed in control of the  Company  pursuant to
Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as defined below).

      "Effective  Date" means the date the Registration  Statement  covering the
Registrable Securities is declared effective by the SEC.

      "Escrow  Agent"  means the escrow  agent  identified  in the Joint  Escrow
Instructions attached hereto as ANNEX II (the "Joint Escrow Instructions").

      "Escrow Funds" means the Purchase  Price  delivered to the Escrow Agent as
contemplated by Sections 1(c) and (d) hereof.

      "Escrow Property" means the Escrow Funds and the Certificates delivered to
the Escrow Agent as contemplated by Section 1(c) hereof.

      "Finder" means Econor Investments Corporation.

      "Holder" means the Person holding the relevant  Securities at the relevant
time.

      "Last Audited Date" means December 31, 2002.

                                       2
<PAGE>

      "Buyer Control Person" means each director,  executive officer,  promoter,
and such other Persons as may be deemed in control of the Buyer pursuant to Rule
405 under the 1933 Act or Section 20 of the 1934 Act.

      "Majority  in Interest of the  Holders"  means one or more  Holders  whose
respective  Purchase Prices aggregate more than fifty percent (50%) of the Total
Purchase Price.

      "Material  Adverse Effect" means an event or combination of events,  which
individually or in the aggregate,  would reasonably be expected to (w) adversely
affect the legality,  validity or enforceability of the Securities or any of the
Transaction  Agreements,  (x) have or result in a material adverse effect on the
results of operations,  assets, prospects, or condition (financial or otherwise)
of the Company and its subsidiaries,  taken as a whole, (y) adversely impair the
Company's  ability to perform fully on a timely basis its obligations  under any
of the Transaction  Agreements or the transactions  contemplated thereby, or (z)
materially and adversely  affect the value of the rights granted to the Buyer in
the Transaction Agreements.

      "New  Common  Stock"  means  shares  of  Common  Stock  and/or  securities
convertible  into,  and/or other rights  exercisable for, the issuance of Common
Stock, which are offered or sold in a New Transaction.

      "New  Investor"  means  the  third  party  investor,  purchaser  or lender
(howsoever denominated) in a New Transaction.

      "New  Transaction"  means the offer or sale of New  Common  Stock by or on
behalf of the Company to a New Investor in a transaction  offered or consummated
after the date  hereof  (it  being  specifically  understood  that the term "New
Transaction"  does not include the sale of the Purchased Shares to the Buyer and
the Other Buyers).

      "Person"  means  any  living  person  or any  entity,  such  as,  but  not
necessarily limited to, a corporation, partnership or trust.

      "Principal  Trading  Market" means the Over the Counter  Bulletin Board or
such  other  market  on which  the  Common  Stock is  principally  traded at the
relevant time, but shall not included the "pink sheets."

      "Registrable  Securities"  shall have the  meaning  ascribed  to it in the
Registration Rights Agreement.

      "Registration Rights Agreement" means the Registration Rights Agreement in
the form  annexed  hereto as ANNEX IV as  executed  by the Buyer and the Company
simultaneously with the execution of this Agreement.

      "Registration   Statement"  means  an  effective   registration  statement
covering the Registrable Securities.

                                       3
<PAGE>

      "Reporting  Service"  means  Bloomberg  LP or if that  service is not then
reporting the relevant  information  regarding  the Common  Stock,  a comparable
reporting service of national  reputation  selected by a Majority in Interest of
the Holders and reasonably acceptable to the Company.

      "Securities"  means the  Purchased  Shares,  the  Warrants and the Warrant
Shares.

      "Shares" means the shares of Common Stock  representing  any or all of the
Purchased Shares and the Warrant Shares.

      "State of Incorporation" means Israel.

      "Trading  Day" means any day during  which the  Principal  Trading  Market
shall be open for business.

      "Transaction  Agreements"  means the Securities  Purchase  Agreement,  the
Registration Rights Agreement, the Joint Escrow Instructions,  and the Warrants,
and includes all ancillary documents referred to in those agreements.

      "Transfer  Agent" means, at any time, the transfer agent for the Company's
Common Stock.

      C. FORM OF PAYMENT; DELIVERY OF CERTIFICATES.

      (i) The  Buyer  shall pay the  Purchase  Price by  delivering  immediately
available  good funds in United States Dollars to the Escrow Agent no later than
the date prior to the Closing Date.

      (ii) No later than the Closing Date, but in any event  promptly  following
payment by the Buyer to the Escrow  Agent of the  Purchase  Price,  the  Company
shall deliver the Certificates to the Escrow Agent.

      (iii) By  signing  this  Agreement,  each of the  Buyer  and the  Company,
subject  to  acceptance  by the  Escrow  Agent,  agrees  to all of the terms and
conditions of, and becomes a party to, the Joint Escrow Instructions, all of the
provisions of which are incorporated herein by this reference as if set forth in
full.

      D. METHOD OF PAYMENT.  Payment into escrow of the relevant  Purchase Price
shall be made by wire transfer of funds to:

                                       4
<PAGE>

           Bank of New York
           350 Fifth Avenue
           New York, New York 10001

           ABA# 021000018
           For credit to the account of Krieger & Prager LLP
           Account No.:    [To be provided to the Buyer by Krieger & Prager LLP]
           Re:      BVR 04/1 Transaction
           For:     [Name of Buyer]

      2.  BUYER  REPRESENTATIONS,   WARRANTIES,  ETC.;  ACCESS  TO  INFORMATION;
INDEPENDENT INVESTIGATION.

      The Buyer  represents  and warrants to, and covenants and agrees with, the
Company as follows:

      A. Without  limiting  Buyer's right to sell the Securities  pursuant to an
effective  registration  statement or otherwise in compliance with the 1933 Act,
the Buyer is purchasing the  Securities for its own account for investment  only
and not with a view towards the public sale or distribution thereof and not with
a view to or for sale in connection with any distribution thereof.

      B. The Buyer is (i) an  "accredited  investor"  as that term is defined in
Rule 501 of the General  Rules and  Regulations  under the 1933 Act by reason of
Rule 501(a)(3),  (ii) experienced in making investments of the kind described in
this Agreement and the related documents,  (iii) able, by reason of the business
and  financial  experience  of its  officers  (if an  entity)  and  professional
advisors (who are not  affiliated  with or compensated in any way by the Company
or any of its  Affiliates  or selling  agents),  to protect its own interests in
connection with the  transactions  described in this Agreement,  and the related
documents,  and to  evaluate  the  merits  and  risks  of an  investment  in the
Securities,  and (iv) able to afford the entire  loss of its  investment  in the
Securities.

      C. All subsequent offers and sales of the Securities by the Buyer shall be
made pursuant to registration of the relevant  Securities  under the 1933 Act or
pursuant to an exemption from registration.

      D. The Buyer understands that the Securities are being offered and sold to
it in reliance on specific exemptions from the registration  requirements of the
1933 Act and state  securities  laws and that the  Company is  relying  upon the
truth and accuracy of, and the Buyer's  compliance  with,  the  representations,
warranties,  agreements,  acknowledgments  and  understandings  of the Buyer set
forth herein in order to determine the  availability  of such exemptions and the
eligibility of the Buyer to acquire the Securities.

                                       5
<PAGE>

      E. The Buyer and its advisors,  if any, have been  furnished  with or have
been given  access to all  materials  relating  to the  business,  finances  and
operations  of the Company and  materials  relating to the offer and sale of the
Purchased  Shares  and the  Warrants  which  have been  requested  by the Buyer,
including  those set forth on in any annex  attached  hereto.  The Buyer and its
advisors,  if any,  have been afforded the  opportunity  to ask questions of the
Company and its management and have received  complete and satisfactory  answers
to any such  inquiries.  Without  limiting the generality of the foregoing,  the
Buyer has also had the opportunity to obtain and to review the Company's filings
on EDGAR  listed on ANNEX VI hereto (the  documents  listed on such Annex VI, to
the extent available on EDGAR or otherwise provided to the Buyer as indicated on
said Annex VI, collectively, the "Company's SEC Documents").

      F. The Buyer understands that its investment in the Securities  involves a
high degree of risk.

      G. The Buyer hereby  represents  that, in connection  with its purchase of
the  Securities,  it has not relied on any  statement or  representation  by the
Company  or the  Finder  or any of  their  respective  officers,  directors  and
employees or any of their respective  attorneys or agents or the Finder,  except
as  specifically  set forth herein.  The Finder is a third party  beneficiary of
this provision.

      H. The Buyer  understands that no United States federal or state agency or
any  other  government  or  governmental  agency  has  passed  on  or  made  any
recommendation or endorsement of the Securities.

      I. This Agreement and the other Transaction  Agreements to which the Buyer
is a party,  and the  transactions  contemplated  thereby,  have  been  duly and
validly authorized,  executed and delivered on behalf of the Buyer and are valid
and  binding  agreements  of the Buyer  enforceable  in  accordance  with  their
respective terms,  subject as to enforceability to general  principles of equity
and to bankruptcy,  insolvency,  moratorium and other similar laws affecting the
enforcement of creditors' rights generally.

      3. COMPANY  REPRESENTATIONS,  ETC. The Company  represents and warrants to
the Buyer as of the Closing Date that, except as otherwise provided in the ANNEX
V or in the Company's SEC Documents:

      A. RIGHTS OF OTHERS  AFFECTING THE  TRANSACTIONS.  There are no preemptive
rights of any  shareholder  of the Company,  as such,  to acquire the  Purchased
Shares,  the Warrants or the Shares. No party other has a currently  exercisable
right  of  first  refusal  which  would  be  applicable  to  any  or  all of the
transactions contemplated by the Transaction Agreements.

                                       6
<PAGE>

      B. STATUS.  The Company is a corporation duly organized,  validly existing
and in good standing  under the laws of the State of  Incorporation  and has the
requisite  corporate power to own its properties and to carry on its business as
now being conducted.  The Company is duly qualified as a foreign  corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such  qualification  necessary,
other than those jurisdictions in which the failure to so qualify would not have
or result in a Material Adverse Effect. The Company has registered its stock and
is  obligated  to file  reports  pursuant to Section 12 or Section  15(d) of the
Securities  and  Exchange Act of 1934,  as amended (the "1934 Act").  The Common
Stock is quoted on the  Principal  Trading  Market.  The Company has received no
notice, either oral or written, with respect to the continued eligibility of the
Common Stock for such quotation on the Principal Trading Market, and the Company
has  maintained  all  requirements  on its  part  for the  continuation  of such
quotation.

      C. AUTHORIZED SHARES. The authorized capital stock of the Company consists
of 200,000,000  shares of Ordinary Shares,  nominal value NIS 0.01 each ("Common
Stock"),  of  which  approximately  98,377,010  are  outstanding  as of the date
hereof.  All  issued  and  outstanding  shares  of Common  Stock  have been duly
authorized and validly issued and are fully paid and non-assessable. The Company
has  sufficient  authorized  and  unissued  shares  of  Common  Stock  as may be
necessary  to effect the  issuance of the Shares.  As of the Closing  Date,  the
Shares shall have been duly authorized by all necessary  corporate action on the
part of the Company,  and,  when issued on the Closing Date or upon  exercise of
the Warrants in accordance  with their terms,  will be duly and validly  issued,
fully  paid and  non-assessable  and will not  subject  the  Holder  thereof  to
personal liability by reason of being such Holder.

      D. TRANSACTION  AGREEMENTS AND STOCK. This Agreement and each of the other
Transaction  Agreements,  and the transactions  contemplated  thereby, have been
duly and  validly  authorized  by the  Company,  this  Agreement  has been  duly
executed and  delivered by the Company and this  Agreement  is, and the Warrants
and each of the other Transaction Agreements, when executed and delivered by the
Company,  will be, valid and binding  agreements of the Company  enforceable  in
accordance with their respective terms,  subject as to enforceability to general
principles  of  equity  and to  bankruptcy,  insolvency,  moratorium,  and other
similar laws affecting the enforcement of creditors' rights generally.

      E.  NON-CONTRAVENTION.  The execution  and delivery of this  Agreement and
each of the other  Transaction  Agreements  by the Company,  the issuance of the
Securities,  and the  consummation  by the  Company  of the  other  transactions
contemplated  by  this  Agreement,   the  Warrants  and  the  other  Transaction
Agreements  do not and will  not  conflict  with or  result  in a breach  by the
Company of any of the terms or provisions  of, or constitute a default under (i)
the certificate of incorporation or by-laws of the Company, each as currently in
effect, (ii) any indenture, mortgage, deed of trust, or other material agreement
or  instrument  to  which  the  Company  is a party or by which it or any of its
properties or assets are bound,  including any listing  agreement for the Common
Stock  except as herein  set  forth,  or (iii) to its  knowledge,  any  existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court,  United States federal or state  regulatory  body,  administrative
agency, or other  governmental body having  jurisdiction over the Company or any
of its properties or assets, except such conflict, breach or default which would
not have or result in a Material Adverse Effect.

                                       7
<PAGE>

      F.  APPROVALS.  No  authorization,  approval  or  consent  of  any  court,
governmental body,  regulatory agency,  self-regulatory  organization,  or stock
exchange or market or the shareholders of the Company is required to be obtained
by the  Company  for the  issuance  and sale of the  Securities  to the Buyer as
contemplated  by this  Agreement,  except  such  authorizations,  approvals  and
consents that have been obtained.

      G. FILINGS.  None of the Company's  SEC Documents  contained,  at the time
they were filed, any untrue statement of a material fact or omitted to state any
material fact required to be stated  therein or necessary to make the statements
made  therein in light of the  circumstances  under  which  they were made,  not
misleading.  Since March 1, 2003,  the Company  has timely  filed all  requisite
forms, reports and exhibits thereto required to be filed by the Company with the
SEC.

      t 6 0 H. ABSENCE OF CERTAIN  CHANGES.  Since the Last Audited Date,  there
has been no material  adverse change and no Material  Adverse Effect,  except as
disclosed in the Company's SEC Documents. Since the Last Audited Date, except as
provided in the  Company's  SEC  Documents,  the Company has not (i) incurred or
become  subject to any  material  liabilities  (absolute or  contingent)  except
liabilities  incurred in the ordinary  course of business  consistent  with past
practices; (ii) discharged or satisfied any material lien or encumbrance or paid
any material  obligation  or  liability  (absolute  or  contingent),  other than
current liabilities paid in the ordinary course of business consistent with past
practices;  (iii) declared or made any payment or  distribution of cash or other
property to  shareholders  with  respect to its capital  stock,  or purchased or
redeemed,  or made any  agreements  to  purchase  or  redeem,  any shares of its
capital stock; (iv) sold,  assigned or transferred any other tangible assets, or
canceled  any debts  owed to the  Company  by any  third  party or claims of the
Company  against  any third  party,  except in the  ordinary  course of business
consistent with past practices; (v) waived any rights of material value, whether
or not in the ordinary course of business,  or suffered the loss of any material
amount of existing business;  (vi) made any increases in employee  compensation,
except in the ordinary course of business  consistent  with past  practices;  or
(vii)  experienced any material  problems with labor or management in connection
with the terms and conditions of their employment.

      I. FULL DISCLOSURE.  To the best of the Company's  knowledge,  there is no
fact known to the Company (other than general  economic  conditions known to the
public  generally or as disclosed in the Company's SEC  Documents)  that has not
been disclosed in writing to the Buyer that would reasonably be expected to have
or result in a Material Adverse Effect.

                                       8
<PAGE>

      J. ABSENCE OF LITIGATION. There is no action, suit, proceeding, inquiry or
investigation  before or by any court,  public  board or body pending or, to the
knowledge of the Company,  threatened against or affecting the Company before or
by any governmental authority or nongovernmental department,  commission, board,
bureau,  agency or instrumentality  or any other person,  wherein an unfavorable
decision,  ruling or finding would have a Material Adverse Effect or which would
adversely affect the validity or enforceability  of, or the authority or ability
of the  Company  to  perform  its  obligations  under,  any  of the  Transaction
Agreements.  The Company is not aware of any valid basis for any such claim that
(either  individually  or in the  aggregate  with  all  other  such  events  and
circumstances)  could  reasonably be expected to have a Material Adverse Effect.
There are no outstanding  or  unsatisfied  judgments,  orders,  decrees,  writs,
injunctions  or  stipulations  to which the Company is a party or by which it or
any of its properties is bound, that involve the transaction contemplated herein
or  that,  alone or in the  aggregate,  could  reasonably  be  expect  to have a
Material Adverse Effect.

      K.  ABSENCE  OF EVENTS OF  DEFAULT.  Except as set forth in  Section  3(e)
hereof,  no Event  of  Default  (or its  equivalent  term),  as  defined  in the
respective  agreement to which the Company or its subsidiary is a party,  and no
event  which,  with the giving of notice or the  passage of time or both,  would
become an Event of  Default  (or its  equivalent  term) (as so  defined  in such
agreement), has occurred and is continuing,  which would have a Material Adverse
Effect.

      L. ABSENCE OF CERTAIN  COMPANY  CONTROL PERSON  ACTIONS OR EVENTS.  To the
Company's knowledge, none of the following has occurred during the past five (5)
years with respect to a Company Control Person:

      (1) A petition under the federal  bankruptcy laws or any state  insolvency
      law was  filed by or  against,  or a  receiver,  fiscal  agent or  similar
      officer  was  appointed  by a court for the  business  or property of such
      Company  Control  Person,  or any  partnership  in which he was a  general
      partner at or within  two years  before  the time of such  filing,  or any
      corporation or business  association of which he was an executive  officer
      at or within two years before the time of such filing;

      (2) Such Company Control Person was convicted in a criminal  proceeding or
      is a named subject of a pending  criminal  proceeding  (excluding  traffic
      violations and other minor offenses);

      (3) Such Company Control Person was the subject of any order,  judgment or
      decree, not subsequently  reversed,  suspended or vacated, of any court of
      competent jurisdiction,  permanently or temporarily enjoining him from, or
      otherwise limiting, the following activities:

            (i) acting, as an investment advisor, underwriter,  broker or dealer
            in securities,  or as an affiliated person,  director or employee of
            any  investment  company,  bank,  savings  and loan  association  or
            insurance  company,  as a futures commission  merchant,  introducing
            broker,  commodity trading advisor,  commodity pool operator,  floor
            broker,  any other Person regulated by the Commodity Futures Trading
            Commission  ("CFTC")  or engaging  in or  continuing  any conduct or
            practice in connection with such activity;

            (ii) engaging in any type of business practice; or

                                       9
<PAGE>

            (iii)  engaging in any activity in  connection  with the purchase or
            sale  of  any  security  or  commodity  or in  connection  with  any
            violation of federal or state securities laws or federal commodities
            laws;

      (4) Such Company Control Person was the subject of any order,  judgment or
      decree, not subsequently reversed, suspended or vacated, of any federal or
      state authority barring, suspending or otherwise limiting for more than 60
      days the right of such  Company  Control  Person to engage in any activity
      described in paragraph (3) of this item, or to be associated  with Persons
      engaged in any such activity; or

      (5)  Such  Company  Control  Person  was  found  by a court  of  competent
      jurisdiction  in a civil action or by the CFTC or SEC to have violated any
      federal or state  securities law, and the judgment in such civil action or
      finding by the CFTC or SEC has not been subsequently reversed,  suspended,
      or vacated.

      M. NO  UNDISCLOSED  LIABILITIES  OR EVENTS.  To the best of the  Company's
knowledge,  the  Company  has no  liabilities  or  obligations  other than those
disclosed in the Transaction  Agreements or the Company's SEC Documents or those
incurred in the ordinary course of the Company's business since the Last Audited
Date,  or which  individually  or in the  aggregate,  do not or would not have a
Material Adverse Effect.  No event or circumstances  has occurred or exists with
respect  to the  Company  or its  properties,  business,  operations,  condition
(financial or otherwise), or results of operations, which, under applicable law,
rule or regulation, requires public disclosure or announcement prior to the date
hereof by the Company but which has not been so publicly announced or disclosed.
There are no proposals currently under consideration or currently anticipated to
be under  consideration  by the Board of Directors or the executive  officers of
the Company  which  proposal  would (x) change the  articles or  certificate  of
incorporation  or other  charter  document  or by-laws of the  Company,  each as
currently in effect,  with or without shareholder  approval,  which change would
reduce or otherwise  adversely  affect the rights and powers of the shareholders
of the Common Stock or (y)  materially  or  substantially  change the  business,
assets or capital of the Company, including its interests in subsidiaries.

      N. NO INTEGRATED  OFFERING.  Neither the Company nor any of its Affiliates
nor any Person acting on its or their behalf has, directly or indirectly, at any
time  since  September  1,  2003,  made any  offer or sales of any  security  or
solicited  any  offers  to buy  any  security  under  circumstances  that  would
eliminate the availability of the exemption from registration under Regulation D
in connection with the offer and sale of the Securities as contemplated hereby.

      O.  DILUTION.  The number of shares  issuable on the Closing Date and upon
exercise of the Warrants may have a dilutive  effect on the ownership  interests
of the other shareholders (and Persons having the right to become  shareholders)
of the Company.  The Company's executive officers and directors have studied and
fully  understand the nature of the  Securities  being sold hereby and recognize
that they have such a potential  dilutive effect.  The board of directors of the
Company has concluded,  in its good faith business judgment,  that such issuance
is in the best interests of the Company. The Company  specifically  acknowledges
that its obligation to issue the Warrant Shares upon exercise of the Warrants is
binding  upon the  Company  and  enforceable  regardless  of the  dilution  such
issuance  may  have on the  ownership  interests  of other  shareholders  of the
Company,  and the Company will honor such obligations,  including honoring every
Notice of Exercise  (as  contemplated  by the  Warrants),  unless the Company is
subject  to an  injunction  (which  injunction  was not  sought by the  Company)
prohibiting the Company from doing so.

                                       10
<PAGE>

      P. FEES TO BROKERS, FINDERS AND OTHERS. Except for payment of the Finder's
Compensation  (as  defined  below) to the  Finder,  payment of which is the sole
responsibility of the Company,  the Company has taken no action which would give
rise to any claim by any  Person  for  brokerage  commission,  finder's  fees or
similar  payments  by  Buyer  relating  to this  Agreement  or the  transactions
contemplated hereby. Buyer shall have no obligation with respect to such fees or
with  respect to any claims made by or on behalf of other  Persons for fees of a
type  contemplated  in this  paragraph  that may be due in  connection  with the
transactions  contemplated hereby. The Company shall indemnify and hold harmless
each of Buyer, its employees,  officers,  directors,  agents, and partners,  and
their respective Affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and attorney's  fees) and expenses  suffered
in respect of any such claimed or existing fees, as and when incurred.  The term
"Finder's  Compensation"  means,  in  connection  with the  consummation  of the
transactions  contemplated by this Agreement, the consideration  contemplated by
the Joint Escrow Instructions.

      Q.  CONFIRMATION.  The Company confirms that all statements of the Company
contained  herein shall survive  acceptance of this Agreement by the Buyer.  The
Company  agrees that,  if any events occur or  circumstances  exist prior to the
Closing  Date or the release of the  Purchase  Price to the Company  which would
make  any of the  Company's  representations,  warranties,  agreements  or other
information set forth herein  materially  untrue or materially  inaccurate as of
such date, the Company shall  immediately  notify the Buyer and the Escrow Agent
in writing  prior to such date of such fact,  specifying  which  representation,
warranty or covenant is affected and the reasons therefor.

                                       11
<PAGE>

      4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

      A. TRANSFER  RESTRICTIONS.  The Buyer  acknowledges that (1) the Purchased
Securities  have not been and are not being  registered  under the provisions of
the 1933 Act and,  except as provided in the  Registration  Rights  Agreement or
otherwise included in an effective registration  statement,  the Shares have not
been and are not being registered under the 1933 Act, and may not be transferred
unless  (A)  subsequently  registered  thereunder  or (B) the Buyer  shall  have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the Securities to be sold
or  transferred  may be sold or  transferred  pursuant to an exemption from such
registration;  (2) any  sale of the  Securities  made in  reliance  on Rule  144
promulgated  under the 1933 Act may be made only in accordance with the terms of
said  Rule and  further,  if said  Rule is not  applicable,  any  resale of such
Securities under  circumstances in which the seller,  or the Person through whom
the sale is made,  may be deemed to be an  underwriter,  as that term is used in
the 1933 Act, may require  compliance  with some other  exemption under the 1933
Act or the rules and  regulations  of the SEC  thereunder;  and (3)  neither the
Company nor any other Person is under any  obligation to register the Securities
(other than pursuant to the Registration Rights Agreement) under the 1933 Act or
to comply with the terms and conditions of any exemption thereunder.

      B. RESTRICTIVE  LEGEND. The Buyer acknowledges and agrees that, until such
time as the  relevant  Shares  have  been  registered  under  the 1933  Act,  as
contemplated by the Registration  Rights Agreement,  and sold in accordance with
an effective  Registration  Statement or  otherwise in  accordance  with another
effective  registration  statement,   the  certificates  and  other  instruments
representing  any  of  the  Securities  shall  bear  a  restrictive   legend  in
substantially  the  following  form  (and a  stop-transfer  order  may be placed
against transfer of any such Securities):

            THESE  SECURITIES HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
            BE  SOLD  OR  OFFERED  FOR  SALE  IN  THE  ABSENCE  OF AN  EFFECTIVE
            REGISTRATION  STATEMENT FOR THE  SECURITIES OR AN OPINION OF COUNSEL
            OR OTHER EVIDENCE  ACCEPTABLE TO THE COMPANY THAT SUCH  REGISTRATION
            IS NOT REQUIRED.

      C.  FILINGS.  The  Company  undertakes  and  agrees to make all  necessary
filings in  connection  with the sale of the  Securities  to the Buyer under any
United States laws and regulations applicable to the Company, or by any domestic
securities  exchange  or trading  market,  and to provide a copy  thereof to the
Buyer promptly after such filing.

      D. REPORTING STATUS. So long as the Buyer owns any of the Securities,  the
Company  shall file all reports  required  to be filed with the SEC  pursuant to
Section 13 or 15(d) of the 1934 Act, shall take all reasonable  action under its
control to ensure that adequate  current public  information with respect to the
Company,  as  required in  accordance  with Rule  144(c)(2)  of the 1933 Act, is
publicly available,  and shall not terminate its status as an issuer required to
file  reports  under  the  1934  Act  even  if the  1934  Act or the  rules  and
regulations thereunder would permit such termination.  The Company will take all
reasonable  action  under its  control to  maintain  the  continued  listing and
quotation and trading of its Common Stock (including,  without  limitation,  all
Registrable  Securities)  on the  Principal  Trading  Market or a listing on the
NASDAQ/Small Cap or National  Markets and, to the extent  applicable to it, will
comply in all material respects with the Company's  reporting,  filing and other
obligations  under the by-laws or rules of the Principal  Trading  Market and/or
the  National  Association  of  Securities  Dealers,  Inc.,  as the case may be,
applicable  to it at least  through  the date which is sixty (60) days after the
date on which all of the Warrants have been exercised or have expired.

                                       12
<PAGE>

      E. USE OF PROCEEDS.  The Company will use the proceeds received  hereunder
(excluding  amounts paid by the Company for Finder's  Compensation in connection
with the sale of the  Securities  or legal and escrow fees  contemplated  by the
Joint Escrow Instructions) for general corporate purposes.

      F. WARRANTS.

      (i) The Company agrees to issue to the Buyer on the Closing Date three (3)
separate  transferable  warrants  (each,  a  "Warrant"  and,  collectively,  the
"Warrants"),  designated as Class 2004-A  ("Class A"),  Class 2004-B ("Class B")
and Class 2004-C ("Class C") Warrants, respectively.

      (ii)  Each  Warrant  shall be for the  purchase  the a number of shares of
Common  Stock equal to the  Purchased  Shares (a total of 300% of the  Purchased
Shares for all Warrants combined);  provided, however, that the Class C Warrants
shall provide that they are  exercisable in an amount  determined by multiplying
(x) the number of shares  originally stated in such Class C Warrant (as the same
may be adjusted pursuant to the term of that Warrant),  by (y) the fraction,  of
which the  numerator  is the number of shares  for which one or more  notices of
exercise  pursuant  to the Class A Warrants  have been duly  submitted  (and the
appropriate purchase price paid for) as by the Buyer (and any direct or indirect
transferee, assignee or designee of the Buyer) and the denominator is the number
of shares  originally  stated in the Buyer's Class A Warrants (as such numerator
and  denominator  may be adjusted to reflect stock splits,  reverse stock splits
and similar changes in the capital structure of the Company).1

--------

1     By way of  illustration:  Assume that each of the Buyer's Class A Warrants
      and  Class C  Warrants  are for  1,000,000  shares.  The  Buyer's  Class A
      Warrants  have  been  exercised  for  500,000  shares  (50%).  The Class C
      Warrants are exercisable for 500,000 shares (50%).  If, after the exercise
      of the Class A  Warrants,  there had been a 2:1 stock  split,  the Class C
      Warrants  would be  exercisable  for  1,000,000  shares  (50% of  adjusted
      2,000,000 shares).

                                       13
<PAGE>

      (iii) Each  Warrant  shall have an  exercise  price  (each,  an  "Exercise
Price") as  follows:  (i) Class A - US$0.20;  (ii) Class B - US$0.35;  and (iii)
Class C- US$0.50;  each such  Exercise  Price will be subject to  adjustment  as
provided in the Warrant.  Each Warrant will expire as follows:  (i) Class A - on
the Class A Expiration Date (as defined  below);  and (ii) Class B and Class C -
on the date  which is on the last day of the  calendar  month in which the third
annual  anniversary  of the  relevant  Closing  Date  occurs.  The term "Class A
Expiration  Date" means the date which is eight (8) months  after the  Effective
Date, but not counting for such purposes the days, if any,  during which sale of
Registrable Securities was suspended after the Effective Date.2

      (iv) Each of the Warrants  shall be in the form annexed hereto as ANNEX I.
All Warrants will provide for cashless exercise rights, exercisable beginning on
the first  anniversary  of the Closing Date if, but only if, the Effective  Date
has not occurred by such first anniversary of the Closing Date.

      (v)  All  Warrant  Shares  shall  be  subject  to  the  provisions  of the
Registration Rights Agreement.

      G. CERTAIN AGREEMENTS.

----------
2     By way of  illustration:  If the  Effective  Date is June  30,  2004,  the
      initial Class A Expiration  Date would be February 28, 2005. If,  however,
      the sale of  Registrable  Securities  was suspended in the interim for ten
      (10) days, the applicable  Class A Expiration Date will be March 10, 2005.
      If on March 5, 2005,  the sale of  Registrable  Securities  was  suspended
      again for five (5) days,  the  Class A  Expiration  Date will be March 15,
      2005.

                                       14
<PAGE>

      (i) (A) The  Company  covenants  and agrees  that,  except for the sale of
Purchased  Securities to the Other Buyers and subject to the other provisions of
this  Section  4(g) and Section  4(h),  during the period (the "New  Transaction
Period")  from the Closing Date and  continuing  through and including the Final
Lock-up Date (as defined below),  it will not, without the prior written consent
of a Majority  in Interest  of the  Holders in each  instance,  enter into a New
Transaction  where either the lowest fixed  purchase  price of any shares of the
New Common Stock  contemplated  in the New  Transaction  is below the  Threshold
Price  (as  defined  below)  or the  lowest  conversion  price  which  would  be
applicable  under the terms of the New Transaction is below the Threshold Price.
The term "Threshold Price" means US$0.10 per share (subject to adjustment in the
same manner as the Exercise  Price of the Warrant is adjusted).  The term "Final
Lock-up  Date" means the date which is one hundred  eighty  (180) days after the
Effective  Date,  but not counting for such  purposes the days,  if any,  during
which sale of Registrable Securities was suspended after the Effective Date.3

            (B)  In  the  event  there  is a  New  Transaction  during  the  New
Transaction  Period which breaches the provisions of the preceding  subparagraph
(i)(A) of this Section 4(g),

      (1) the Per Share  Purchase  Price  shall be  adjusted  to an amount  (the
      "Adjusted Per Share Purchase  Price") equal to the lower of (x) the lowest
      fixed purchase price of any shares of the New Common Stock contemplated in
      the New  Transaction  or (y) the lowest  conversion  price  which would be
      applicable under the terms of the New Transaction;

      (2) the Company will issue to the Holder additional shares of Common Stock
      ("Additional Shares") equal to the excess, if any, of (x) (I) the Purchase
      Price divided by (II) the Adjusted Per Share Purchase Price,  over (y) the
      number of Purchased Shares and Additional  Shares  previously  issued,  if
      any;

      (3) the number of Warrants issued shall be adjusted to equal the number of
      shares equal to (x) (I) the higher of one hundred  percent  (100%) or (II)
      the Alternative Warrant Percentage (as defined below), of (y) the Purchase
      Price divided by the Adjusted Per Share Purchase Price;

----------
3     By  way of  illustration:  If  the  sale  of  Registrable  Securities  was
      suspended for ten (10) days in the interim,  the applicable  Final Lock-up
      Date will be one hundred ninety (190) days after the Effective Date. If on
      the 188th day after the Effective Date, the sale of Registrable Securities
      was suspended  again for five (5) days, the Final Lock-up Date will be one
      hundred  ninety-five  (195) days after the  Effective  Date.  This example
      assumes there is no Early Lock-up  Termination Date.

                                       15
<PAGE>

      (4) if the exercise  price of the warrants,  option or similar  instrument
      (howsoever denominated; collectively, "New Transaction Warrants") included
      in the New Transaction  (the "New  Transaction  Exercise  Price") is lower
      than the then effective Exercise Price on the Warrants, the Exercise Price
      of the Warrants  shall be adjusted to equal the New  Transaction  Exercise
      Price; and

      (5) if the provisions of the New  Transaction  Warrant are more beneficial
      to the  holder  of such  instrument  than the  corresponding  terms of the
      Warrant,4  or if the terms  which are  beneficial  to the  Company  in the
      Warrant  are  not  included  in the  corresponding  instrument  in the New
      Transaction, then, unless waived by the Holder, the Warrant terms shall be
      modified to reflect similar terms (based on the original issue date of the
      Warrants).

      (ii) The term  "Alternative  Warrant  Percentage"  means (x) the number of
shares which are eligible to be purchased  under the New  Transaction  Warrants,
divided  by (y) the  aggregate  of the  shares  of New  Common  Stock  issued or
issuable in such  transaction  (excluding the shares issuable on exercise of the
New Transaction Warrants).

      (iii)  The  foregoing  provisions  of  Section  4(g) do not  apply  to the
issuance  of New  Common  Stock  in  connection  with  a  Person's  exercise  of
conversion or other rights it may have under documents executed and transactions
consummated prior to the date of this Agreement.

      (iv) Nothing in the foregoing  provisions reflects either an obligation on
the part of any Buyer to participate  in any New  Transaction or a limitation on
any Buyer from participating in any New Transaction.

      (v) Any of the  foregoing  provisions  of this  Section  4(g) or any other
provision of this  Agreement  (including but not limited to Section 4(h) hereof)
or any of the other Transaction Agreements to the contrary notwithstanding,  the
Company  shall not  engage in any  offers,  sales or other  transactions  of its
securities  which  would  adversely  affect  the  exemption  from   registration
available for the transactions contemplated by the Transaction Agreements.

      H. AVAILABLE  SHARES.  The Company shall have at all times  authorized and
reserved for  issuance,  free from  preemptive  rights,  a number of shares (the
"Minimum  Available Shares") at least equal to one hundred ten percent (110%) of
the number of shares issuable upon exercise of all outstanding  Warrants held by
all Holders (in each case,  whether such Warrants were originally  issued to the
Holder, the Buyer or to any other party). For the purposes of such calculations,
the Company should assume that all Warrants were then issued and exercisable, in
each case  without  regard to any  restrictions  which might limit any  Holder's
right to exercise any of the Warrants held by any Holder.

----------

4     Without limiting the foregoing,  by way of example: the expiration date of
      the  instrument in the New  Transaction  is more than three years from its
      original issue date. Notwithstanding the foregoing, the expiration date of
      the Class A Warrants shall not be extended based on this provision.

                                       16
<PAGE>

      I. PUBLICITY,  FILINGS,  RELEASES, ETC. Each of the parties agrees that it
will not disseminate any information  relating to the Transaction  Agreements or
the transactions  contemplated  thereby,  including  issuing any press releases,
holding  any  press   conferences  or  other  forums,   or  filing  any  reports
(collectively,  "Publicity"),  without giving the other party reasonable advance
notice and an opportunity to comment on the contents thereof. Neither party will
include in any such  Publicity any statement or statements or other  material to
which the other party reasonably objects.  In furtherance of the foregoing,  the
Company will provide to the Buyer  drafts of the  applicable  text of any filing
intended to be made with the SEC which refers to the  Transaction  Agreements or
the transactions  contemplated  thereby as soon as practicable (but at least two
(2) business  days before such filing will be made) and will not include in such
filing any statement or  statements  or other  material to which the other party
reasonably objects.  Notwithstanding  the foregoing,  each of the parties hereby
consents to the inclusion of the text of the  Transaction  Agreements in filings
made with the SEC (but any descriptive text  accompanying or part of such filing
shall be subject to the other provisions of this paragraph).

      5. TRANSFER AGENT INSTRUCTIONS.

      A. The Company  warrants that, with respect to the Securities,  other than
the stop transfer  instructions  to give effect to Section 4(a) hereof,  it will
give the Transfer Agent no instructions  inconsistent with instructions to issue
Common  Stock  representing  the  Purchased  Shares  and from  time to time upon
exercise of the Warrants in such  amounts as specified  from time to time by the
Company to the  Transfer  Agent,  bearing the  restrictive  legend  specified in
Section 4(b) of this  Agreement  prior to  registration  of the Shares under the
1933  Act,  registered  in the  name of the  Buyer  or its  nominee  and in such
denominations to be specified by the Holder in connection  therewith.  Except as
so provided,  the Shares shall otherwise be freely transferable on the books and
records of the Company as and to the extent  provided in this  Agreement and the
other  Transaction  Agreements.  Nothing in this Section shall affect in any way
the Buyer's  obligations and agreement to comply with all applicable  securities
laws upon resale of the  Securities.  If the Buyer  provides the Company with an
opinion of counsel reasonably satisfactory to the Company that registration of a
resale by the Buyer of any of the Securities in accordance with clause (1)(B) of
Section 4(a) of this  Agreement is not required  under the 1933 Act, the Company
shall  (except as  provided  in clause (2) of  Section  4(a) of this  Agreement)
permit the transfer of the Securities  and, in the case of the Purchased  Shares
or of the Warrant Shares,  promptly  instruct the Transfer Agent to issue one or
more  certificates  for  Common  Stock  without  legend in such name and in such
denominations as specified by the Buyer.

      B. Subject to the  provisions of this  Agreement,  the Company will permit
the  Buyer to  exercise  its  right  to  exercise  the  Warrants  in the  manner
contemplated by the Warrants.

                                       17
<PAGE>

      C. In lieu of delivering  physical  certificates  representing  the Common
Stock  issuable  upon exercise of a Warrant or at the request of the Holder with
respect to the Purchased Shares or Warrant Shares  previously  issued,  provided
the Transfer Agent is participating in the Depository Trust Company ("DTC") Fast
Automated  Securities  Transfer  program,  upon  request  of the  Holder and its
compliance  with the  provisions  contained  in this  paragraph,  so long as the
certificates  therefor  do not  bear a  legend  and the  Holder  thereof  is not
obligated to return such certificate for the placement of a legend thereon,  the
Company shall use its best efforts to cause the Transfer Agent to electronically
transmit to the Holder the Common Stock issuable upon exercise of the Warrant or
in  replacement  of  Purchased  Shares or Warrant  Shares  previously  issued by
crediting  the  account of  Holder's  Prime  Broker with DTC through its Deposit
Withdrawal Agent Commission system.

      D. The Company  shall assume any fees or charges of the Transfer  Agent or
Company  counsel  regarding  (i)  the  removal  of a  legend  or  stop  transfer
instructions  with respect to Registrable  Securities,  and (ii) the issuance of
certificates or DTC registration to or in the name of the Holder or the Holder's
designee  or  to a  transferee  as  contemplated  by an  effective  Registration
Statement.

      E. The Company  will  authorize  the  Transfer  Agent to give  information
relating  to the Company  directly  to the Buyer or the Buyer's  representatives
upon the  request of the Buyer or any such  representative,  to the extent  such
information  relates  to (i) the  status of shares  of  Common  Stock  issued or
claimed to be issued to the Buyer in  connection  with a Notice of Exercise,  or
(ii) the number of outstanding  shares of Common Stock of all shareholders as of
a current or other specified date. At the request of the Buyer, the Company will
provide  the Buyer  with a copy of the  authorization  so given to the  Transfer
Agent.

      6. CLOSING DATE.

      A. The Closing Date shall occur on the date which is the first Trading Day
after each of the conditions  contemplated by Sections 7 and 8 hereof shall have
either been satisfied or been waived by the party in whose favor such conditions
run.

      B. The closing of the purchase and issuance of Purchased  Securities shall
occur on the  Closing  Date at the  offices of the  Escrow  Agent and shall take
place no later than 3:00 P.M.,  New York time, on such day or such other time as
is mutually agreed upon by the Company and the Buyer.

      C.  Notwithstanding  anything to the contrary contained herein, the Escrow
Agent will be  authorized  to release  the Escrow  Funds to the  Company  and to
others and to release the other  Escrow  Property on the  relevant  Closing Date
upon  satisfaction of the conditions set forth in Sections 7 and 8 hereof and as
provided in the Joint Escrow Instructions.

                                       18
<PAGE>

      7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

      The Buyer understands that the Company's  obligation to sell the Purchased
Securities  to the Buyer  pursuant  to this  Agreement  on the  Closing  Date is
conditioned upon:

      A. The execution and delivery of this  Agreement by the Buyer on or before
the Closing Date;

      B.  Delivery by the Buyer to the Escrow  Agent by the Closing Date of good
funds as payment in full of an amount equal to the Purchase  Price in accordance
with this Agreement;

      C. The accuracy on such Closing Date of the representations and warranties
of the Buyer contained in this Agreement,  each as if made on such date, and the
performance  by the Buyer on or before such date of all covenants and agreements
of the Buyer required to be performed on or before such date; and

      D. There shall not be in effect any law, rule or regulation prohibiting or
restricting the transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained.

      8. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

      The Company  understands  that the  Buyer's  obligation  to  purchase  the
Purchased Securities on the Closing Date is conditioned upon:

      A. The execution and delivery of this Agreement and the other  Transaction
Agreements by the Company on or before the Closing Date;

      B.   Delivery  by  the  Company  to  the  Escrow  Agent  of  the  relevant
Certificates in accordance with this Agreement;

      C. On such Closing Date,  each of the Transaction  Agreements  executed by
the  Company  on or before  such date  shall be in full force and effect and the
Company shall not be in default thereunder;

      D. The  accuracy  in all  material  respects on such  Closing  Date of the
representations and warranties of the Company contained in this Agreement,  each
as if made on such date,  and the  performance  by the Company on or before such
date of all covenants and agreements of the Company  required to be performed on
or before such date;

                                       19
<PAGE>

      E. On such  Closing  Date,  the Buyer  shall have  received  an opinion of
counsel for the Company,  dated such Closing Date, in form,  scope and substance
reasonably  satisfactory to the Buyer,  substantially to the effect set forth in
ANNEX III attached hereto;

      F. There shall not be in effect any law, rule or regulation prohibiting or
restricting the transactions  contemplated  hereby,  or requiring any consent or
approval which shall not have been obtained; and

      G. From and after the date hereof to and including the Closing Date,  each
of the following conditions will remain in effect: (i) the trading of the Common
Stock  shall  not have been  suspended  by the SEC or on the  Principal  Trading
Market;  (ii) trading in securities  generally on the Principal  Trading  Market
shall not have been  suspended or limited;  (iii),  no minimum prices shall been
established  for securities  traded on the Principal  Trading  Market;  and (iv)
there shall not have been any material  adverse  change in any financial  market
that,  in the  reasonable  judgment  of the  Buyer,  makes it  impracticable  or
inadvisable to purchase the Securities.

      9. INDEMNIFICATION AND REIMBURSEMENT.

      A. (i) The Company agrees to indemnify and hold harmless the Buyer and its
officers,  directors,  employees, and agents, and each Buyer Control Person from
and  against any  losses,  claims,  damages,  liabilities  or expenses  incurred
(collectively,  "Damages"),  joint or several, and any action in respect thereof
to which the Buyer, its partners,  Affiliates,  officers, directors,  employees,
and duly  authorized  agents,  and any such Buyer Control Person becomes subject
to, resulting from, arising out of or relating to any misrepresentation,  breach
of warranty or nonfulfillment of or failure to perform any covenant or agreement
on the  part of  Company  contained  in this  Agreement,  as  such  Damages  are
incurred,  except to the extent  such  Damages  result  primarily  from  Buyer's
failure to perform any covenant or agreement  contained in this Agreement or the
Buyer's or its  officer's,  director's,  employee's,  agent's  or Buyer  Control
Person's  gross  negligence,   recklessness  or  bad  faith  in  performing  its
obligations under this Agreement.

      (ii) The Company hereby agrees that, if the Buyer, other than by reason of
its gross  negligence  or willful  misconduct  (in each case, as determined by a
non-appealable judgment to such effect), (x) becomes involved in any capacity in
any  action,  proceeding  or  investigation  brought by any  shareholder  of the
Company,  in  connection  with  or  as a  result  of  the  consummation  of  the
transactions contemplated by this Agreement or the other Transaction Agreements,
or if the Buyer is impleaded in any such action,  proceeding or investigation by
any Person, or (y) becomes involved in any capacity in any action, proceeding or
investigation brought by the SEC, any self-regulatory organization or other body
having  jurisdiction,  against or involving the Company or in connection with or
as a  result  of the  consummation  of the  transactions  contemplated  by  this
Agreement or the other Transaction  Agreements,  or (z) is impleaded in any such
action,  proceeding or investigation  by any Person,  then in any such case, the
Company shall indemnify, defend and hold harmless the Buyer from and against and
in respect of all losses,  claims,  liabilities,  damages or expenses  resulting
from,  imposed  upon or  incurred  by the Buyer,  directly  or  indirectly,  and
reimburse such Buyer for its reasonable legal and other expenses  (including the
cost of any investigation and preparation) incurred in connection therewith,  as
such expenses are incurred. The indemnification and reimbursement obligations of
the Company under this paragraph shall be in addition to any liability which the
Company may otherwise  have,  shall extend upon the same terms and conditions to
any Affiliates of the Buyer who are actually named in such action, proceeding or
investigation,  and  partners,  directors,  agents,  employees and Buyer Control
Persons (if any), as the case may be, of the Buyer and any such  Affiliate,  and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal  representatives of the Company,  the Buyer, any such Affiliate and
any such  Person.  The Company  also agrees that  neither the Buyer nor any such
Affiliate, partner, director, agent, employee or Buyer Control Person shall have
any liability to the Company or any Person  asserting  claims on behalf of or in
right of the Company in connection  with or as a result of the  consummation  of
this Agreement or the other Transaction  Agreements,  except as may be expressly
and specifically provided in or contemplated by this Agreement.

                                       20
<PAGE>

      B. All claims for  indemnification  by any  Indemnified  Party (as defined
below) under this Section shall be asserted and resolved as follows:

            (i) In the event any claim or demand in  respect of which any Person
claiming  indemnification  under any provision of this Section (an  "Indemnified
Party")  might seek  indemnity  under  paragraph (a) of this Section is asserted
against or sought to be collected from such Indemnified  Party by a Person other
than a party  hereto or an  Affiliate  thereof  (a  "Third  Party  Claim"),  the
Indemnified Party shall deliver a written notification,  enclosing a copy of all
papers  served,  if any, and  specifying  the nature of and basis for such Third
Party Claim and for the Indemnified  Party's claim for  indemnification  that is
being  asserted  under any  provision  of this  Section  against any Person (the
"Indemnifying  Party"),  together  with the  amount  or, if not then  reasonably
ascertainable,  the estimated  amount,  determined in good faith,  of such Third
Party Claim (a "Claim  Notice") with reasonable  promptness to the  Indemnifying
Party.  If the  Indemnified  Party  fails  to  provide  the  Claim  Notice  with
reasonable  promptness after the Indemnified Party receives notice of such Third
Party Claim,  the  Indemnifying  Party shall not be  obligated to indemnify  the
Indemnified  Party with respect to such Third Party Claim to the extent that the
Indemnifying  Party's  ability to defend has been  prejudiced by such failure of
the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party
as soon as  practicable  within the period  ending  thirty  (30)  calendar  days
following  receipt  by the  Indemnifying  Party of  either a Claim  Notice or an
Indemnity  Notice  (as  defined  below)  (the  "Dispute   Period")  whether  the
Indemnifying  Party disputes its liability or the amount of its liability to the
Indemnified Party under this Section and whether the Indemnifying Party desires,
at its sole cost and expense, to defend the Indemnified Party against such Third
Party Claim. The following provisions shall also apply.

      (x) If the  Indemnifying  Party notifies the Indemnified  Party within the
      Dispute  Period  that  the  Indemnifying   Party  desires  to  defend  the
      Indemnified  Party with respect to the Third Party Claim  pursuant to this

                                       21
<PAGE>

      paragraph (b) of this Section,  then the Indemnifying Party shall have the
      right to defend,  with counsel reasonably  satisfactory to the Indemnified
      Party, at the sole cost and expense of the Indemnifying  Party, such Third
      Party Claim by all appropriate  proceedings,  which  proceedings  shall be
      vigorously and diligently  prosecuted by the Indemnifying Party to a final
      conclusion or will be settled at the discretion of the Indemnifying  Party
      (but only with the  consent  of the  Indemnified  Party in the case of any
      settlement that provides for any relief other than the payment of monetary
      damages or that  provides for the payment of monetary  damages as to which
      the  Indemnified  Party  shall  not be  indemnified  in full  pursuant  to
      paragraph (a) of this  Section).  The  Indemnifying  Party shall have full
      control of such  defense and  proceedings,  including  any  compromise  or
      settlement thereof; provided,  however, that the Indemnified Party may, at
      the sole cost and expense of the  Indemnified  Party, at any time prior to
      the  Indemnifying  Party's delivery of the notice referred to in the first
      sentence  of this  subparagraph  (x),  file any  motion,  answer  or other
      pleadings or take any other action that the Indemnified  Party  reasonably
      believes  to be  necessary  or  appropriate  protect  its  interests;  and
      provided  further,  that  if  requested  by the  Indemnifying  Party,  the
      Indemnified  Party will, at the sole cost and expense of the  Indemnifying
      Party,  provide  reasonable  cooperation  to  the  Indemnifying  Party  in
      contesting  any Third Party Claim that the  Indemnifying  Party  elects to
      contest.  The Indemnified  Party may participate in, but not control,  any
      defense  or  settlement  of  any  Third  Party  Claim  controlled  by  the
      Indemnifying  Party  pursuant  to this  subparagraph  (x),  and  except as
      provided in the preceding  sentence,  the Indemnified Party shall bear its
      own costs and expenses with respect to such participation. Notwithstanding
      the  foregoing,  the  Indemnified  Party may take over the  control of the
      defense or settlement of a Third Party Claim at any time if it irrevocably
      waives its right to  indemnity  under  paragraph  (a) of this Section with
      respect to such Third Party Claim.

      (y) If the Indemnifying Party fails to notify the Indemnified Party within
      the Dispute Period that the Indemnifying Party desires to defend the Third
      Party  Claim  pursuant  to  paragraph  (b)  of  this  Section,  or if  the
      Indemnifying Party gives such notice but fails to prosecute vigorously and
      diligently or settle the Third Party Claim, or if the  Indemnifying  Party
      fails to give any notice  whatsoever  within the Dispute Period,  then the
      Indemnified  Party  shall have the right to  defend,  at the sole cost and
      expense  of  the  Indemnifying   Party,  the  Third  Party  Claim  by  all
      appropriate  proceedings,  which  proceedings  shall be  prosecuted by the
      Indemnified  Party in a  reasonable  manner  and in good  faith or will be
      settled at the  discretion of the  Indemnified  Party (with the consent of
      the Indemnifying Party, which consent will not be unreasonably  withheld).
      The  Indemnified  Party  will  have  full  control  of  such  defense  and
      proceedings,  including any  compromise or settlement  thereof;  provided,
      however,  that if requested by the  Indemnified  Party,  the  Indemnifying
      Party  will,  at the sole  cost and  expense  of the  Indemnifying  Party,
      provide reasonable cooperation to the Indemnified Party and its counsel in
      contesting  any  Third  Party  Claim  which  the   Indemnified   Party  is
      contesting.  Notwithstanding the foregoing provisions of this subparagraph
      (y), if the Indemnifying  Party has notified the Indemnified  Party within
      the Dispute Period that the  Indemnifying  Party disputes its liability or
      the  amount of its  liability  hereunder  to the  Indemnified  Party  with
      respect to such Third Party Claim and if such dispute is resolved in favor
      of the Indemnifying Party in the manner provided in subparagraph(z) below,
      the Indemnifying Party will not be required to bear the costs and expenses
      of the Indemnified Party's defense pursuant to this subparagraph (y) or of
      the Indemnifying Party's  participation therein at the Indemnified Party's
      request,  and the Indemnified Party shall reimburse the Indemnifying Party
      in full for all reasonable costs and expenses incurred by the Indemnifying
      Party in  connection  with such  litigation.  The  Indemnifying  Party may
      participate in, but not control,  any defense or settlement  controlled by
      the  Indemnified   Party  pursuant  to  this  subparagraph  (y),  and  the
      Indemnifying  Party shall bear its own costs and expenses  with respect to
      such participation.

                                       22
<PAGE>

      (z) If the Indemnifying  Party notifies the Indemnified Party that it does
      not  dispute  its  liability  or  the  amount  of  its  liability  to  the
      Indemnified  Party with  respect to the Third Party Claim under  paragraph
      (a) of this  Section or fails to notify the  Indemnified  Party within the
      Dispute  Period whether the  Indemnifying  Party disputes its liability or
      the amount of its liability to the Indemnified  Party with respect to such
      Third Party  Claim,  the amount of Damages  specified  in the Claim Notice
      shall be conclusively  deemed a liability of the Indemnifying  Party under
      paragraph  (a) of this  Section and the  Indemnifying  Party shall pay the
      amount  of  such  Damages  to the  Indemnified  Party  on  demand.  If the
      Indemnifying  Party has timely disputed its liability or the amount of its
      liability  with  respect to such  claim,  the  Indemnifying  Party and the
      Indemnified Party shall proceed in good faith to negotiate a resolution of
      such  dispute;  provided,  however,  that if the  dispute is not  resolved
      within thirty (30) days after the Claim  Notice,  the  Indemnifying  Party
      shall be entitled to institute such legal action as it deems appropriate.

            (ii) In the event any  Indemnified  Party  should have a claim under
paragraph  (a) of this  Section  against  the  Indemnifying  Party that does not
involve a Third Party  Claim,  the  Indemnified  Party  shall  deliver a written
notification  of a claim  for  indemnity  under  paragraph  (a) of this  Section
specifying the nature of and basis for such claim,  together with the amount or,
if not then reasonably  ascertainable,  the estimated amount, determined in good
faith, of such claim (an "Indemnity  Notice") with reasonable  promptness to the
Indemnifying  Party. The failure by any Indemnified  Party to give the Indemnity
Notice shall not impair such party's rights  hereunder except to the extent that
the Indemnifying  Party  demonstrates  that it has been  irreparably  prejudiced
thereby.  If the Indemnifying  Party notifies the Indemnified Party that it does
not dispute  the claim or the amount of the claim  described  in such  Indemnity
Notice or fails to notify  the  Indemnified  Party  within  the  Dispute  Period
whether the  Indemnifying  Party  disputes  the claim or the amount of the claim
described  in such  Indemnity  Notice,  the amount of Damages  specified  in the
Indemnity  Notice will be  conclusively  deemed a liability of the  Indemnifying
Party under paragraph (a) of this Section and the  Indemnifying  Party shall pay
the  amount  of  such  Damages  to  the  Indemnified  Party  on  demand.  If the
Indemnifying  Party has  timely  disputed  its  liability  or the  amount of its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall  proceed in good faith to  negotiate a resolution  of such  dispute;
provided,  however,  that if the dispute is not resolved within thirty (30) days
after the Claim Notice,  the  Indemnifying  Party shall be entitled to institute
such legal action as it deems appropriate.

                                       23
<PAGE>

      C. The indemnity  agreements  contained herein shall be in addition to (i)
any cause of action or  similar  rights of the  indemnified  party  against  the
indemnifying  party or others,  and (ii) any liabilities the indemnifying  party
may be subject to.

      10. JURY TRIAL  WAIVER.  The Company and the Buyer hereby waive a trial by
jury in any action,  proceeding or counterclaim brought by either of the Parties
hereto  against the other in respect of any matter  arising out or in connection
with the Transaction Agreements.

      11. GOVERNING LAW: MISCELLANEOUS.

      A. This Agreement  shall be governed by and interpreted in accordance with
the laws of the State of New York for  contracts to be wholly  performed in such
state and without giving effect to the principles thereof regarding the conflict
of laws.  Each of the parties  consents  to the  exclusive  jurisdiction  of the
federal courts whose  districts  encompass any part of the County of New York or
the state  courts of the State of New York  sitting in the County of New York in
connection  with any dispute  arising  under this  Agreement or any of the other
Transaction  Agreements  and hereby waives,  to the maximum extent  permitted by
law, any objection,  including any objection based on forum non  conveniens,  to
the  bringing  of any  such  proceeding  in such  jurisdictions.  To the  extent
determined  by such  court,  the  Company  shall  reimburse  the  Buyer  for any
reasonable legal fees and disbursements  incurred by the Buyer in enforcement of
or protection of any of its rights under any of the Transaction Agreements.

      B.  Failure  of any  party to  exercise  any right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

      C. This  Agreement  shall inure to the benefit of and be binding  upon the
successors and assigns of each of the parties hereto.

      D.  All  pronouns  and any  variations  thereof  refer  to the  masculine,
feminine or neuter, singular or plural, as the context may require.

      E. A facsimile  transmission  of this signed  Agreement shall be legal and
binding on all parties hereto.

                                       24
<PAGE>

      F. This Agreement may be signed in one or more counterparts, each of which
shall be deemed an original.

      G. The headings of this  Agreement  are for  convenience  of reference and
shall not form part of, or affect the interpretation of, this Agreement.

      H. If any provision of this Agreement shall be invalid or unenforceable in
any  jurisdiction,  such  invalidity  or  unenforceability  shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

      I. This  Agreement may be amended only by an instrument in writing  signed
by the party to be charged with enforcement thereof.

      J. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.

      12. NOTICES.  Any notice required or permitted hereunder shall be given in
writing  (unless  otherwise  specified  herein) and shall be deemed  effectively
given on the earliest of

      (a) the date  delivered,  if  delivered  by  personal  delivery as against
      written receipt therefor or by confirmed facsimile transmission,

      (b) the seventh business day after deposit, postage prepaid, in the United
      States Postal Service by registered or certified mail, or

      (c) the third  business  day after  mailing by domestic  or  international
      express courier, with delivery costs and fees prepaid,

in each case,  addressed to each of the other parties thereunto  entitled at the
following  addresses (or at such other  addresses as such party may designate by
ten (10)  days'  advance  written  notice  similarly  given to each of the other
parties hereto):

COMPANY:          At the address set forth at the head of this Agreement.
                  Attn: President
                  Telephone No.: (011 972 3) 699-6060
                  Telecopier No.: (011 972 3) 699-6262

                  with a copy to:

                  Ehud Arad, Adv.
                  Bach, Arad, Scharf & Co.
                  2 Hashlom Rd.
                  Tel Aviv, 67892, Israel
                  Telephone No.: (011 972 3) 562-5303
                  Telecopier No.: (011 972 3) 562-5304

                                       25
<PAGE>

BUYER:            At the address set forth on the signature page of this
                  Agreement.

                  with a copy to:

                  Krieger & Prager LLP, Esqs.
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Ronald J. Nussbaum, Esq.
                  Telephone No.: (212) 363-2900
                  Telecopier No.  (212) 363-2999

ESCROW AGENT:     Krieger & Prager LLP, Esqs.
                  39 Broadway
                  Suite 1440
                  New York, NY 10006
                  Attn: Samuel Krieger, Esq.
                  Telephone No.: (212) 363-2900
                  Telecopier No.  (212) 363-2999

                                       26
<PAGE>

      13.  SURVIVAL OF  REPRESENTATIONS  AND  WARRANTIES.  The Company's and the
Buyer's  representations  and warranties  herein shall survive the execution and
delivery of this Agreement and the delivery of the  Certificates and the payment
of the  Purchase  Price,  and shall  inure to the  benefit  of the Buyer and the
Company and their respective successors and assigns.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK.]

                                       27
<PAGE>

      IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyer (if
an entity, by one of its officers  thereunto duly authorized) as of the date set
forth below.

PURCHASED SHARES                            ____________________________________

PURCHASE PRICE:                             US$_________________________________

                                                SIGNATURES FOR BUYERS

      IN  WITNESS  WHEREOF,  the  undersigned   represents  that  the  foregoing
statements are true and correct and that it has caused this Securities  Purchase
Agreement to be duly executed on its behalf as of the date first above written.

________________________________        ________________________________________
Address                                     Printed Name of Buyer
________________________________

                                        By: ____________________________________
Telecopier No. _________________            (Signature of Authorized Person)

                                        ________________________________________
______________________________          Printed Name and Title
Jurisdiction of Incorporation
or Organization

As of the date set forth below,  the  undersigned  hereby accepts this Agreement
and  represents  that the foregoing  statements are true and correct and that it
has caused this Securities Purchase Agreement to be duly executed on its behalf.

BVR TECHNOLOGIES LTD.

By:    _________________________________

Title: _________________________________

                                       28
<PAGE>

         ANNEX I           FORM OF WARRANT

         ANNEX II          JOINT ESCROW INSTRUCTIONS

         ANNEX III         OPINION OF COUNSEL

         ANNEX IV          REGISTRATION RIGHTS AGREEMENT

         ANNEX V           COMPANY DISCLOSURE

         ANNEX VI          COMPANY'S SEC DOCUMENTS AVAILABLE ON EDGAR

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