Document:

F-3/A

Exhibit 10.1  

AGREEMENT  

Made
and executed in Tel Aviv on the 16th day of July 2007 

			
	Between:  	1.	Cellocator Ltd.

Private Company 51-293553-7

Of 12 Sapir Street, POB 093

Shaarei Tikvah 44810

(Hereinafter: “the Company” or “Cellocator”)  

	 	                  2. 	Matan
Y. Communication and Tracking Systems Ltd.

Private Company 51-1484644

Of 12 Sapir St., POB 093

Shaarei Tikvah 44810

(Hereinafter: “Matan”)  

	 	3. 	Mr.
Amnon Duchovna-Naveh

I.D. No. 053957569

Of 12 Sapir St., POB 093

Shaarei Tikvah 44810

(Hereinafter: “Amnon”)  

	 	
(The Company, Matan and Amnon shall

 hereinafter be called jointly and

severally: “the Sellers”)  

	 	
The
first party 

	And:  	Pointer
Telocation Ltd.

Public Company 52-004147-6

Of 1 Korazin St.

Givatayim

(Hereinafter: “the Buyer”)  

	 	
The
second party 

	WHEREAS 		Cellocator
and Matan develop, produce, provide technical support for, market and sell hardware and
software for communications and tracking of vehicles, for vehicle security, for the
management of fleets of vehicles and for the assessment of vehicles (hereinafter: “the
Activity”) and they have a good reputation in their field of business; and  

	WHEREAS 		The
Sellers wish to sell all tangible assets and intangible assets, as defined herein below,
and the Buyer wishes to purchase the intangible assets and tangible assets, all in
accordance with the conditions and consideration as specified herein below in this
agreement.  

Accordingly,
the parties have agreed, declared and stipulated as follows: 

Preamble, Appendices and
Section Headings  

	1.1  	The
preamble to this agreement and appendices thereof constitute an integral part thereof.

	1.2  	The
section headings in this agreement are intended solely for the sake of convenience and no
significance whatsoever is to be assigned thereto in the interpretation of this
agreement. 

	1.3  	Definitions  

	 	
The
terms specified herein below shall have the meaning in this agreement that is stated
alongside them as follows:  

	 	
“The
Intangible Assets of the Company” – The Company’s reputation and good
name, including the intellectual property rights of the Company (as defined herein
below), patents that have been registered in the Company’s name, insofar as such
have been registered, the name “Cellocator,” the trademark of the Company,
intangible rights and assets attendant thereon and the Company’s undertaking on the
Date of Closing, inclusive of agreements (including leasing agreements), orders and
agreements with customers, suppliers, third parties and employees in Israel and abroad,
save for any claims and/or demands of any third party whatsoever against the Company, the
cause of action whereof arose prior to the Date of Closing, inclusive of authorities and
save for undertakings to banks, all up to the Date of Closing;  

	 	
“The
Intangible Assets of Matan” – The reputation and good name of Matan,
inclusive of the Intellectual Property rights of Matan, patents registered in Matan’s
name, insofar as such have been registered, intangible rights and assets attendant
thereon, Matan’s undertaking on the Date of Closing, including agreements, orders
and agreements with clients, suppliers, third parties, and employees in Israel and
abroad, save for claims and/or demands of any third party whatsoever, the cause of action
whereof arose prior to the Date of Closing, inclusive of authorities, but not including
licenses from the Ministry of Communications, insofar as there are such, and save for
undertakings to banks, all up to the Date of Closing and all, save for as specified in Appendix
1A to this agreement;  

	 	
“The
Intangible Assets” - The Intangible Assets of the Company and the Intangible Assets
of Matan;  

	 	
“The
Tangible Assets of the Company” – All permanent property of the Company and
current property of the Company, including customers’ debts to the Company (not
including cash and cash equivalents, vehicles and equity capital but including leased
vehicles), as well as current undertakings of the Company, all up to the Date of Closing;  

	 	
“The
Tangible Assets of Matan” – All permanent property of Matan and current
property of Matan, inclusive of customers’ debts to Matan (not including cash and
cash equivalents, vehicles and equity capital but including leased vehicles), as well as
current undertakings of Matan, all up to the Date of Closing, save for as specified in Appendix
1A of this agreement;  

	 	
“The
Tangible Assets” - The Tangible Assets of the Company and the Tangible Assets of
Matan; 

	 	
“The
Assets Being Transferred” - The Intangible Assets and the Tangible Assets jointly; 

	 	
“The
Conditions Precedent” – As specified in section 8 of this agreement herein
below;  

	 	
“The
Date of Closing” – The date of closing of the transaction which will occur
5 days from the date of fulfillment of the last of the conditions precedent;  

	 	
“Intellectual
Property” – Intellectual property rights of any kind and type whatsoever,
including proprietary rights in algorithms, binary codes, trademarks, commercial
strategies, business plans, computer programs, Internet website, concepts, confidential
information, developments, approval marks, collective marks, copyrights, data, customer
lists, databases, designs, derivative creations, discoveries, lists of distributors,
documents, site names and addresses, file structures, formulas, reputation and goodwill,
ideas, improvements, samples (whether registered or not registered), information,
innovations, inventions, knowledge, logo, methods, moral rights, machine code, patents,
applications to register patents, patent rights; without derogating from the generality
of the aforesaid, inclusive of all future requests, distribution requests, renewed
production, retesting or extensions, plans, procedures, technology comprising a
proprietary right, research data, research results, research notes, service signs,
software, source code, sketches, statistical models, lists of suppliers, systems,
techniques, technology, trade secrets, trade names and business names, trade styles,
technical information, utility models, and any similar right to each of the aforesaid.  

	 	
“Intellectual
Property of the Company” – Any Intellectual Property of the Company or that
is registered in its name, whether registered or unregistered;  

	 	
“Intellectual
Property of Matan” – Any Intellectual Property of Matan or that is
registered in its name, whether registered or unregistered, and all, save for as
specified in Appendix 1A to this agreement;  

	 	
“Intellectual
Property Being Transferred” – The Intellectual Property of the Company
and the Intellectual Property of Matan;  

	2.  	The
Sellers Declarations  

	 	
The
Sellers hereby declare and undertake vis-à-vis the Buyer as follows:  

	2.1  	The
Company is a private company duly registered in Israel. The registration of the Company
is fully valid and the Registrar of Companies is not conducting any proceedings for the
removal of the Company. There are no liquidation proceedings against the Company, no
receivership proceedings, no application for liquidation or receivership, as aforesaid,
has been lodged, no notice or warning of the intent to open such proceedings, as
aforesaid, has been received and the Company has no knowledge of any reason that is
likely to lead to instituting such proceedings, as aforesaid. 

	2.2  	M.S.Y.
High-Tech Holdings Ltd., private company 51-2932138 (hereinafter: “Meshi Holdings”),
holds 100 percent of the paid and issued share capital, on a fully diluted basis, of the
Company. To date of the signature of this agreement, Ms. Medi Duchovna Naveh
(hereinafter: “Medi”) holds 100 percent of the paid and issued share
capital, fully diluted, of Meshi Holdings. On the Date of Closing, Amnon will hold 100
percent of the paid and issued share capital, on a fully diluted basis, of Meshi
Holdings. 

	2.3  	Matan
is a private company duly registered in Israel. The registration of Matan is in full
effect and the Registrar of Companies is not conducting any proceedings for its removal.
No liquidations proceedings have been undertaken against Matan, no receivership
proceedings, no application for liquidation or receivership, as aforesaid, has been
lodged, no notice or warning of any intent to institute such proceedings, as aforesaid,
has been received, and Matan has no knowledge of any reason likely to lead to instituting
such proceedings, as aforesaid. 

	2.4  	To
date of the signature of this agreement, Amnon and Medi hold 100 percent of the paid and
issued share capital, on a fully diluted basis, of Matan. On the Date of Closing, Amnon
will hold 100 percent of the paid and issued share capital, on a fully diluted basis, of
Matan. 

	2.5  	The
Company or Matan, as the case may be, are the sole owners of the Assets Being Transferred
and the Assets Being Transferred are free and clear of any debt, lien, encumbrance or
third party right whatsoever, save for debts appearing in the financial statements, as
defined in section 2.7 herein below, and save for the undertakings pursuant to agreements
specified in Appendix 2.13 to this agreement and debts that were formed
commencing from January 1, 2007, as specified in section 2.8 herein below. 

	2.6  	Save
for the undertakings which appear in the financial statements and as aforesaid in section
2.5 above, the Sellers and/or Medi have no undertaking vis-à-vis any third party
whatsoever to sell and/or transfer to a third party the Assets Being Transferred and/or
parts thereof and the Sellers have not granted any third party any option and/or right of
refusal for the purchase of the Assets Being Transferred or any part thereof. 

	 	
Financial
Statements  

	2.7  	The
financial statements of the Company and Matan for the years ending on December 31, 2005
and December 31, 2006 (hereinafter: “the Financial Statements”)
are attached hereto as Appendix 2.7A to this agreement. The
financial statements are audited and have been prepared according to customary accounting
principles in Israel that are consistently applied and reflect to date of their making
fully and properly the financial situation of the Company or of Matan, as the case may
be, the assets and undertakings of the Company and of Matan and the results of their
activities for a period or to the date to which they relate. In addition, attached hereto
as Appendix 2.7B to this agreement are the tax adjusting statements
of the Company and of Matan for the year that ended on December 31, 2006. 

	2.8  	Save
for that which is specified in Appendix 2.8, following December 31,
2006 and until the date of signature of this agreement, no fundamental adverse changes
have occurred in the Assets Being Transferred, and the Company and/or Matan did not
perform any transactions that are not in the ordinary course of business and have not
undertaken any undertakings that are not in the ordinary course of business; and until
the Date of Closing the Sellers will not assume any undertakings whatsoever which are not
in the ordinary course of business. 

	 	
Intellectual
Property  

	2.9  	The
Sellers are the full and sole proprietors, free and clear, of the Intellectual Property
Being Transferred. The Company and/or Matan hold the Intellectual Property Being
Transferred (including by way of a user license), which constitutes all the Intellectual
Property that has been used and/or is required to manage Company business and conduct
Matan’s business in the field of Activity, as these are managed at the time of
signature of this agreement. To the best of the Company’s and Matan’s
knowledge, the Company’s use and/or Matan’s use of the Intellectual Property
Being Transferred does not breach any right or license of the employees thereof or of
former employees and such use, as aforesaid, does not breach any right or license of any
others. The Sellers have not granted any others an exclusive right or any other right,
save for rights of use to Company customers, to use or make use of the Intellectual
Property Being Transferred. Appendix 2.9 to this agreement details
the registered rights included in the Intellectual Property Being Transferred. Save for
as detailed in Appendix 2.9 to this agreement, the Sellers are not
obligated to make any payment whatsoever in relation to the use of the Intellectual
Property Being Transferred, such as royalties, commissions or in any other manner to any
owners or license holders or claimants of any patent, trademark, service mark, commercial
name, copyright or any other proprietary right. Without derogating from the aforesaid and
for the avoidance of doubt, it is clarified that the assets being transferred do not
include information that has been developed within the context or as a result of the
implementation of approved program No. 17808 of the chief scientist of the Ministry of
Industry, Trade and Labor (in the context whereof systems to track ELS distress by way of
DTOA technology jointly with the SPSP offices have been developed, which are not included
as assets being transferred and are indicated in Appendix 1A to this agreement). 

	2.10  	The
Sellers duly use the Intellectual Property rights of others included in the Intellectual
Property Being Transferred, inclusive of software required for the current activities of
the Company and/or the current activity of Matan related to the activity, and the Company
and/or Matan fail to breach any intellectual property rights of any third party
whatsoever. A list of the intellectual property assets of the third parties that the
Company and/or Matan make use thereof and the agreements of use are attached hereto as Appendix
2.10 to this agreement. 

	2.11  	Save
for as detailed in Appendix 2.10, there is no third party whatsoever
who, following the signature of this agreement, maintains at its disposal any
intellectual property right or other right whatsoever in matters with which the Company
deals or has dealt and/or matters with which Matan deals or has dealt that are connected
to the Activity. Without derogating from the aforesaid, it is clarified and agreed that
the intellectual property of Matan specified in Appendix 1A to
this agreement is not connected to the Activity. The Sellers are unaware of any breach of
the Intellectual Property Being Transferred that are being transferred by any third party
whatsoever. 

	2.12  	Following
the closing of this agreement, the Sellers will not retain any Intellectual Property
right on matters connected to the Activity, which they held up until the date of
signature of this agreement. Without derogating from the aforesaid, it is clarified and
agreed that Matan retains the intellectual property detailed in Appendix 1A to
this agreement, which is not connected to the Activity. 

Agreements  

	2.13  	A
list of the material agreements to which the Company and Matan are a party to is attached
hereto as Appendix 2.13 to this agreement (hereinafter: “the
List of Material Agreements”). The Company and Matan have delivered
copies of these agreements to the Buyer. To the best of the Company and Matan’s
knowledge, the Company and Matan are not in any breach whatsoever of the aforesaid
agreements that would fundamentally have an adverse effect on the value of the Assets
Being Transferred, and their holdings in the rights pursuant thereto are valid. Apart
from the undertakings specified in the List of the Material Agreements and the current
undertakings to suppliers of the Company and Matan, the Company and/or Matan have no
undertakings of any kind and type whatsoever, connected to the Activity, which in
relation thereto or as a result thereof, following the date of this agreement, the Buyer
is likely to undertake any obligation whatsoever in connection with the Activity that
would have an essentially adverse effect on the value of the Assets Being Transferred. 

Legal Proceedings  

	2.14  	Amnon,
Medi and the Company are not a party to any legal proceedings whatsoever, whether
criminal or civil, whether in Israel or abroad, that are connected to the Activity, save
for the proceedings specified in Appendix 2.14 to this agreement;
other than as specified in Appendix 2.14 to this agreement, (a) the
Company is not a plaintiff or defendant in any action against any third party whatsoever
and Matan is neither a plaintiff or defendant against any third party whatsoever in all
that is connected with the Activity and (b) the Sellers have no knowledge of any caution
or demand of any third party whatsoever to take legal steps against (1) the Company or
(2) Matan in connection with the Activity or (3) shareholders, employees or officers of
the Company and/or Matan, in connection with the Activity. 

	2.15  	In
addition, save for as specified in Appendix 2.15 to this agreement,
there are no judgments, arbitral awards or judicial decisions to which Matan and/or the
Company is/are party and which are connected to the Activity. 

	2.16  	Without
derogating from the aforesaid in this agreement, the Sellers hereby undertake to assume
full liability for any obligation of any kind and type that is connected to the claims,
specified in Appendices 2.14 and 2.15, and any claim or other demand in
connection with the Activity and/or the assets being sold, where the cause of action
arose during the period prior to the Date of Closing; and they undertake to indemnify the
Buyer in connection with any expense and/or damage and/or demand and/or contention vis-à-vis
the Buyer in connection with these claims, subject to the provisions of section 13.8
herein below. 

Employees  

	2.17  	A
list updated to the date of signature of this agreement of all employees of Matan and all
employees of the Company (hereinafter jointly: “the Employees”) is specified
in Appendix 2.17 to this agreement. The aforesaid Appendix also
specifies the date of commencement of employment and details of the personal conditions
of employment of each employee, entitlement to a vehicle (and details of the vehicle
attached) and comprehensive salary (inclusive of social rights by virtue of any law,
means for linking the salary, vacation days and attendant benefits) paid to each
employee. The aforesaid Appendix also includes agreements of the Company and/or Matan
with sub-contractors and consultants in connection with the Activity. The Company and
Matan employ their employees while upholding all labor laws and there are no labor
disputes whatsoever between the Company or Matan and their employees. 

	2.18  	The
Employees have no claims (which have been filed and a copy whereof has been delivered to
the Company and/or Matan nor has the Company and/or Matan received any written or verbal
demand in respect thereof) against the Company and/or Matan in respect of the period of
their employment until the date of signature of this agreement, whether by virtue of
employer – employee relations or by virtue of any other cause of action whatsoever,
and the Company and/or Matan or their managers, has/have no concrete knowledge of the
existence of proceedings, as aforesaid, or the existence of any cause of action, as
aforesaid, against the Company and/or Matan. 

Authorizations  

	2.19  	The
Sellers have received or by the Date of Closing will receive all authorizations required
by law for entering into this agreement and, subject to meeting the conditions precedent,
there is no impediment to entering into this agreement and the performance of their
undertakings, pursuant thereto. Approval of the Board of Directors of the Company and
approval of the Board of Directors of Matan for the transaction subject of this agreement
is attached hereto to this agreement as Appendix 2.19. 

	2.20  	The
Sellers undertake that a condition precedent to the closing of the transaction is that
their undertakings, as specified in section 2 above, shall be correct also to the Date of
Closing, provided that each representation, which relates to a certain date, shall be
correct solely for the same date to which it relates. 

	2.21  	The
Sellers hereby declare that they are aware that the agreement of the Buyer to enter into
this agreement and under the conditions specified herein has been made in reliance on
their declarations, representations and undertakings, as aforesaid, herein in this
Agreement. 

	2A.  	The
Sellers’ Undertakings  

	2A.1  	The
Sellers undertake to cooperate with the Buyer and transmit to the Buyer all information
and/or financial statements and/or other pertinent data concerning the Company and Matan,
which must be included in the prospectus/es submitted on May 31, 2007, in connection with
the raising of capital for the Buyer from US investors and to be submitted, pursuant to
the Registration Rights Agreement, as defined in section 3.7 herein below. Without
derogating from the aforesaid, it is clarified that the financial statements of the
Company and Matan for the years 2004, 2005 and 2006 are audited and prepared pursuant to
U.S. auditing and reporting standards, as required by the U.S. Securities Exchange
Commission, as well as any other financial statement of Cellocator and/or Matan that is
required, insofar as such is required, by the U.S. Securities Exchange Commission
(against payment of the cost involved in the preparation thereof) shall be prepared by
the Sellers’ accountants (Horowitz office) and shall include, in addition to the
unqualified opinion of the auditors, also a letter of agreement of the Sellers’ accountants
to incorporate the financial statements in the Form F-3 Registration Statement that the
Buyer submitted to register for trade the shares that were allocated to U.S.
institutional investors, which was submitted on May 31, 2007, and the Form F-3
Registration Statement that is to be filed as detailed in the Registration Rights
Agreement, as defined in section 3.7 herein below; and the Buyer and the Sellers shall
sign them, and the completion of these statements is a condition for the closing of the
transaction. 

	 	
The
Buyer shall bear any costs and expenses to third parties (such as to the accountants)
involved in the preparation of the statements and the transfer of information, as
aforesaid, up to a total sum of USD 80,000.  

	 	
The
Buyer shall bear the costs, as aforesaid, subject to the closing of the transaction
subject of this agreement so that on the Date of Closing all costs and expenses shall
also be paid, as aforesaid, against a statutory tax invoice; notwithstanding the
aforesaid, the Buyer shall bear the foregoing costs also in the event that the
transaction will not be completed, as a result of an act or omission of the Buyer.  

	2A.2  	The
Sellers undertake not to sell 5 percent or more of the issued share capital of the Buyer
at the time of the sale, as aforesaid, to any person or to one isolated body, in one or
several transactions, until the conclusion of twenty-four (24) months from the Date of
Closing of the transaction, unless with the prior written approval of the Buyer. 

	2A.3  	The
Sellers hereby undertake to grant the Buyer the right of first refusal to purchase the
Shares and/or Debenture Shares, as defined herein below, under the same conditions as the
Sellers will offer them for sale. The Sellers shall send a written notice to the Buyer
wherein shall be specified the number of Shares offered for sale, the conditions of sale
and identity of the potential buyer. The Buyer will have to notify the Sellers within
seven (7) days whether it wishes to purchase the shares offered for sale under the
conditions of the sale notice. If the Buyer refuses to purchase the shares that were
offered or failed to deliver any notice whatsoever to the Sellers on the matter of the
right of refusal, the Sellers may sell the Shares and/or the Debenture Shares under
conditions that will not be better for the purchaser than the conditions for purchase
offered to the Buyer and this within 90 days of the date of provision of notice of the
right of first refusal to the Buyer. It is agreed that the right of first refusal, as
aforesaid in this section, shall not apply to the sale of Shares of the Buyer and/or
Debenture Shares within the context of trade on the stock exchange wherein the Buyer’s
shares are registered for trade, provided that the cumulative extent of the sale in one
transaction or several related transactions does not exceed 5 percent of the issued share
capital of the Buyer at that time and shall not apply to the sale of the Buyer’s
Shares and/or the Debenture Shares to entities under the control of the Sellers, to
shareholders of the Sellers, to their relatives and to entities under their control. In
connection herewith the term “control” shall have the meaning ascribed to it in
the Securities Law 5728-1968. 

	3.  	Declarations
and Undertakings of the Buyer  

	 	
The
Buyer hereby declares and undertakes vis-à-vis the Sellers as follows:  

	3.1  	The
Buyer is a public company, duly registered in Israel, whose securities are registered for
trade in the United States (on the Nasdaq Capital Market) and on the Tel Aviv Stock
Exchange. The registration of the Buyer is fully valid and there are no proceedings by
the Registrar of Companies for the removal thereof. No liquidation proceedings and no
receivership proceedings have been undertaken against the Buyer, and no application for
liquidation or receivership, as aforesaid, has been lodged. No notice or warning of
intent to open such proceedings has been received and the Buyer has no knowledge of a
reason likely to cause the institution of such proceedings as aforesaid. 

	3.2  	The
Buyer undertakes that it has the means and resources at its disposal necessary for
payment of the consideration to the Sellers as specified herein in this agreement. 

	3.3  	The
Buyer undertakes that the Shares, the Debenture and the Debenture Shares, as defined
herein below, at the time of their issuance and registration in the Company books or in a
registration company in the Sellers’ name, shall be duly issued, clear of all debt,
encumbrance and/or lien and/or any right of any third party. 

	3.4  	The
Buyer undertakes that to the best of its knowledge it has not omitted any essential
detail and/or included any misleading detail in its reports to the Securities Authorities
in Israel and the United States. 

	3.5  	The
Buyer undertakes that it has obtained all necessary authorizations pursuant to law for
entering into the agreement and, subject to the fulfillment of the conditions precedent,
there is no preclusion to its entering into this agreement and the performance of its
undertakings pursuant hereto, and all signatories to this agreement and the ancillary
documents are authorized to sign on its behalf this agreement and the ancillary documents
and/or required for the purpose of the execution hereof and to obligate the Buyer with
their signatures; and this agreement with all its conditions binds the Buyer for all
intents and purposes. Authorization of the competent organs of the Buyer for the
transaction, subject of this agreement, is attached hereto to this agreement as Appendix
3.5. 

	 	
The
Buyer has performed an examination of propriety (due diligence) to its satisfaction in
respect of the Assets Being Transferred including, without derogating from the generality
of the aforesaid, a legal and accounting examination in connection with the Activity and
the Assets Being Transferred.  

	 	
The
Buyer is entering into this agreement relying on the declarations of the Sellers in this
agreement and nothing in the contents of this section above may derogate from its rights
vis-à-vis the Sellers in the event that any of the representations are incorrect.  

	3.6  	The
Buyer undertakes that its undertakings, as specified in section 3 above and herein below,
shall be accurate also to the Date of Closing. 

	3.7  	The
Buyer shall act to register for trade in the United States the Shares as defined in
section 5.1.2 herein below and the shares that result from the conversion of the
Debenture as defined in section 5.1.3 herein below (hereinafter: “the Debenture
Shares”), and for this purpose the Buyer shall enter into with the Sellers on
the Date of Closing into a Registration Rights Agreement in the form attached hereto as
Appendix 3.7 (hereinafter: “the Registration Rights Agreement”), all as
specified in the Registration Rights Agreement and shall act until the Date of Closing to
obtain all other authorizations, insofar as required, for the purpose of the Shares and
Debenture Shares issuance. 

	3.8  	It
is agreed that as long as any of the Sellers hold Shares and/or Debenture Shares, as
defined herein in this agreement, the Sellers may appoint an observer on their behalf to
the Board of Directors of the Buyer, subject to such observer signing a confidentiality
agreement in the form attached hereto as Appendix 3.8. 

	3.9  	In
addition to the aforesaid in section 3.8, the parties agree that insofar as the matter
will not limit the filing of a prospectus in respect of the Shares (as they are defined
in section 5.1.2 herein below) and the Debenture Shares, pursuant to the Registration
Rights Agreement and the registration for trade of the Shares and Debenture Shares
pursuant thereto, and as long as the Sellers hold (inclusive of holdings that will result
from the conversion of the Debenture, even if not yet converted, but as long as still
convertible) at least five percent of the issued share capital of the Buyer at such time,
the Sellers may appoint, in place of the observer, as aforesaid in section 3.8 above, a
director on their behalf to the Board of Directors of the Buyer and the Buyer undertakes
to take steps in support of the appointment of the director, as aforesaid. 

	3.10  	The
Buyer undertakes that, subject to obtaining authorization to assign the authorized
enterprise of the Company to the Buyer, the Buyer shall fulfill the provisions of the
conditions of assignment on time and shall continue to fulfill the conditions of the
letter of authorization of the authorized enterprise in such manner and for a period that
will not damage the tax benefits which the Company received prior to the Date of Closing
(hereinafter: “the Buyer’s Undertakings in Respect of the
Authorized Enterprise”) and this subject to the undertaking of the Sellers that
(a) they take full liability for any obligation of any kind and type relating to the
authorized enterprise for the period prior to the Date of Closing and that (b) they
undertake to indemnify the Buyer, upon first demand, in connection with any expense
and/or damage and/or demand and/or contention vis-à-vis the Buyer in connection
with the authorized enterprise in the period that preceded the Date of Closing. The
letters of authorization of the authorized enterprise are attached as Appendix 3.10 to
this agreement. 

	4.  	The
Transaction  

	 	
Subject
to the fulfillment of the conditions precedent in this agreement, the Sellers transfer
and assign to the Buyer and the Buyer purchases and receives by way of transfer on the
Date of Closing all of the Intangible Assets and Tangible Assets, as defined above, clear
of any debt, encumbrance and/or lien and/or third party right whatsoever, save for as
specified in section 2 above, and this against the full payment of the Consideration, as
defined herein below, by the Buyer to the Sellers.  

	5.  	The
Consideration  

	5.1  	In
return for and against the transfer of the Intangible Assets to the Buyer, the Buyer
shall pay the Sellers on the Date of Closing the Consideration as specified herein below
(the Cash Consideration , the Shares and Debenture as defined herein below shall be
called jointly hereinafter: “the Consideration”): 

	5.1.1  	An
amount in cash of NIS 59,857,984 (fifty-nine million eight hundred and fifty-seven
thousand nine hundred and eighty-four New Israeli Shekels) shall be paid as follows: The
amount of NIS 55,657,984 (fifty-five million six hundred and fifty-seven thousand nine
hundred and eighty-four New Israeli Shekels) shall be paid to the Company and a cash sum
of NIS 4,200,000 (four million two hundred thousand New Israeli Shekels) shall be paid to
Matan (hereinafter together – “the Cash Consideration”); as
well as 

	5.1.2  	To
the Company: 160,000 ordinary shares of the Buyer nominal value NIS 3.00 each;

	5.1.3  	To
the Company: a non tradeable debenture convertible into 160,000 ordinary shares of
the Buyer, nominal value NIS 3.00 each (hereinafter: "the Debenture") in
the form attached hereto as Appendix 5.1.3 in the total amount of USD
1,921,668 (one million nine hundred and twenty-one thousand six hundred
and sixty-eight U.S. dollars) (hereinafter: "the Debenture Amount").  

	5.2  	In
consideration and against the transfer of the Tangible Assets to the Buyer, the Buyer
shall pay the Company on the Date of Closing the following payments as specified herein
below: 

	5.2.1  	An
amount equivalent to the difference between the Tangible Assets (inclusive of customer
debts to the Company and Matan as shall appear in the financial statements for 2006, and
the sums of the advances the Company transferred to the leasing companies in connection
with the leased vehicles to be transferred to the Buyer) and the undertakings of the
Company and Matan being transferred in accordance with their value as presented in the
financial statements of the Company, as of December 31, 2006, attached hereto as Appendix
2.6A, prepared in accordance with customary accounting principles
(hereinafter: “the Advance on Account of the Tangible Assets”),
and subject to adjustments to be implemented (following the Date of Closing), pursuant to
an audited balance sheet of the Company as of the date of the closing of the transaction,
as specified in section 5.3 herein below, the amount of the difference, as aforesaid, and
the manner of calculation thereof, as of December 31, 2006, are specified in Appendix
5.2.1 to this agreement; as well as 

	5.2.2  	An
amount in cash of NIS 1,500,000 (one million five hundred thousand New Israeli Shekels),
which constitutes the profit embodied in the inventory of the Company and a cash amount
of NIS 500,000 (five hundred thousand New Israeli Shekels), which constitutes the profit
embodied in the inventory of Matan (hereinafter: “the Consideration for
Profit Embodied in Inventory”). 

	5.3  	Adjusting
the Consideration in Respect of the Tangible Assets  

	5.3.1  	Within
30 days of the Date of Closing, the accountants of the Company and of Matan (Horowitz
office) shall prepare audited financial statements of the Sellers as of the Date of
Closing and prepared according to the customary principles of accounting in Israel
(hereinafter: “the Updated Financial Statements”). In addition, the same
accountants will also prepare audited financial statements of the Sellers as of the Date
of Closing and prepared according to U.S. auditing and reporting standards. Preparation
of all statements, as aforesaid, is subject to the Buyer bearing all expenses and
expenditures up to a total amount of USD 25,000, for third parties (such as accountants)
in respect of the preparation of the statements, solely in accordance with U.S. auditing
and reporting standards. 

	5.3.2  	The
consideration for the Tangible Assets shall be in accordance with their value in the
Updated Financial Statements. 

	5.3.3  	The
Updated Financial Statements, inclusive of details and supporting documents required for
the purpose of auditing, pursuant to customary accounting principles, shall be
transferred for inspection of the Buyer’s accountants, who may deliver their
objections within 15 days of the date of receiving the Updated Financial Statements. 

	5.3.4  	If
disputes arise between the parties’ accountants in relation to the sums specified in
the Updated Financial Statements, a decision in the dispute shall be made by Amnon and
Yossi Ben-Shalom and, insofar as the dispute is not settled by them within 14 days, an
agreed upon arbitrator shall be appointed (hereinafter: “the Arbitrator”)
by Amnon and Yossi Ben-Shalom and, in the absence of agreement between them, one of the
heads of the large accountants offices in Israel (the Big 4) shall be appointed as the
Arbitrator, who does not represent the Buyer or the Sellers and this within 7 days of the
date that either of the parties requests such appointment in writing. The decision of the
Arbitrator shall be final and shall bind the parties to the agreement for all intents and
purposes. The Sellers and the Buyer shall bear the expense of the Arbitrator in equal
parts. 

	5.3.5  	Insofar
as the total of the amounts specified in section 5.3.2 above (insofar as they are amended
pursuant to the procedures specified in section 5.3.4 above) will be higher or lower vis-à-vis
the amount of the Advance on Account of the Tangible Assets (hereinafter: “the
Differences in Value of the Tangible Assets”), the Difference in Value of
the Tangible Assets shall be paid to the Company or the Buyer, as the case may be, within
seven (7) business days from the Date of Closing of the inspection of the Updated
Financial Statements by the accountants of the Buyer and/or the decision of Amnon and
Yossi Ben-Shalom and/or the decision of the Arbitrator, whichever is the later of the
three (hereinafter: “the Date of the Reckoning”). 

	5.4  	To
the Consideration (inclusive of Shares and the Debenture) for the Advance on Account of
the Tangible Assets, the Difference in the Value of the Tangible Assets and Consideration
for Profit Embodied in the Inventory, Value Added Tax (VAT) will be added in accordance
with the law, against the issuing of a tax invoice by the Sellers, unless an
authorization is obtained from the VAT Authorities, pursuant to section 20 of the Value
Added Tax Law. Tax will be duly deducted by the Buyer, insofar as necessary, from the
Consideration, unless authorization is obtained from the Income Tax authorities in
respect of an exemption from the deduction of tax at source or an authorization that
indicates the rate of tax to be deducted, in which case tax will be deducted in
accordance with the provisions of the authorization. 

	6.  	The
Interim Period  

	6.1  	It
is hereby agreed that commencing from the date of signature of this agreement and until
the Date of Closing (hereinafter: “the Interim Period”), the
Sellers undertake that without the agreement of the Buyers in advance and in writing: 

	6.1.1  	The
Sellers will not perform any act that is not in the ordinary and/or current course of
business of the Company and/or Matan and no material change shall be implemented in the
business of the Company and/or Matan. 

	6.1.2  	The
Sellers will not create any debt, undertaking, lien, encumbrance, trusts, or similar
third-party rights, save undertakings vis-à-vis third parties in the ordinary
course of business. 

	6.1.3  	The
Sellers will not perform any transactions and/or dispositions, which may materially
affect the Transferred Assets. 

	6.1.4  	Save
for that which is required pursuant to law, no changes shall be made to the terms of
employment of employees of the Company and/or change in the number of employees, save for
a reduction in the number of employees as a result of the resignation of employees. 

	6.2  	During
the Interim Period, the Buyer shall take steps to obtain all licenses and permits
required for the use of the Intangible Assets and the Tangible Assets, and which will
enable the transfer of Intangible Assets and Tangible Assets in their entirety to the
Buyer on the Date of Closing. 

	7.  	Transfer
of Employees from the Company to the Buyer  

	7.1  	The
Company and Matan undertake to do their best so that their employees shall become
employees of the Buyer on the Date of Closing and the Buyer undertakes to admit all
employees of the Company and all employees of Matan who are interested in being employees
of the Buyer on the Date of Closing (hereinafter: “the Employees Being
Transferred”), with employment terms, wages and social conditions that are no
less than the conditions of their employment with the Company or Matan, as the case may
be. Save for as specified in section 7.8 herein below, the transferred employees shall
cease being employees of the Company or employees of Matan, as the case may be, and shall
become employees of the Buyer, while preserving the continuity of rights from the date of
commencement of employment with the Company or Matan, as the case may be, so that the
period of employment of each Employee Being Transferred from the Company or Matan shall
be deemed, for the purpose of the continuity of rights, as an employment period with the
Buyer. 

	7.2  	It
is hereby agreed and clarified that any debt, obligation, liability and/or duty of any
kind and type whatsoever vis-à-vis any of the transferred employees that relates
to the period until the Date of Closing and/or the date of its application is prior to
the Date of Closing, save for (a) debts as aforesaid in respect whereof allocation were
made in the financial statements and/or were made explicit in the financial statements
correct to the Date of Closing and (b) causes of action that were created in connection
with an act or omission of the Buyer and which created an obligation in respect of the
period prior to the Date of Closing and which shall apply to the Buyer as specified in
section 7.5 herein below, shall be the responsibility of the Company and/or Matan, as the
case may be, and any such debt, obligation, liability and/or duty, in respect of the
period from the Date of Closing and onward shall apply to the Buyer and shall be the
liability thereof. 

	7.3  	Without
derogating from the generality of the aforesaid, until the Date of Closing, the Company
and/or Matan, as the case may be, shall pay all current payments which they owe to
Employees Being Transferred, to the authorities and any other entity pursuant to any law
or agreement or custom in respect of the employment of the Employees Being Transferred
during the period up until the Date of Closing, inclusive of, but without derogating from
the generality of the aforesaid, salaries, income tax deductions, National Insurance fees
and health tax. 

	7.4  	In
addition, until the Date of Closing, the Company and/or Matan, as the case may be, shall
actually make all deposits and allocations required by law or agreement or custom in
respect of the employment of the Employees Being Transferred during the period up until
the Date of Closing, including, but without derogating from the generality of the
aforesaid, allocations in respect of pensions, study funds, benefits, severance pay,
recreation pay and vacation days. 

	7.5  	Any
obligation in respect of the Employees Being Transferred, as aforesaid, which arises
and/or is created following the Date of Closing, including in respect of the period prior
to the Date of Closing, as aforesaid in section 7.2 above, shall apply exclusively to the
Buyer. 

	7.6  	The
parties shall take action to obtain authorization from the tax authorities for a
successive arrangement of rights of the Employees Being Transferred. 

	7.7  	The
parties shall take action so that the accounts of the Employees Being Transferred in the
aforesaid funds and accounts shall be transferred to the Buyer’s name as employer.
Similarly, also with respect to insurance policies that relate to employees of the
Company and employees of Matan, insofar as they are in the name of the Company and/or
Matan (hereinafter jointly: “the Transferred Funds and Insurance Policies”). 

	7.8  	Notwithstanding
the aforesaid in this section, the parties agree that the Employees Being Transferred,
whose names are added to the list attached hereto as Appendix 7.8   prior
to the Date of Closing (hereinafter: “the Employees Without Continuity”)
shall become employed by the Buyer, following the performance of a full final accounting
with the Company and/or Matan, as the case may be, and payment of all that is owing to
them in the event of the termination of employer-employee relations between them and the
Company and/or Matan, as the case may be, inclusive of the release of all monies
deposited on their behalf in funds and directors’ insurances; in such event, the
funds and accounts of these employees shall not be transferred to the Buyer. 

	7.9  	The
Company and Matan shall be liable and undertake, jointly and severally, in respect of
their Employees Being Transferred, to pay the Employees Without Continuity the full
amounts owing them in connection with their work at the company and in connection with
the termination of the employer-employee relations between them and the company until the
Date of Closing. Any liability in respect of the Employees Without Continuity (exclusive
of Amnon and Medi), which arises and/or is created following the Date of Closing,
including in respect of the period prior to the Date of Closing, if such is created in
connection with an act or omission of the Buyer, and which has created a liability in
respect of the period up until the Date of Closing, shall apply exclusively to the Buyer. 

	7.10  	All
employees of the Company and/or Matan who are Employees Without Continuity and who, on
the Date of Closing, will move to be employees of the Buyer shall sign a letter of
waiver, to the effect that they confirm that they have received from the Company and/or
Matan, as the case may be, all sums owing to them and they have no contentions and/or
demands and/or claims against the Company and/or Matan in connection with their
employment and in connection with the termination of employer-employee relations between
them and the companies, in the form attached hereto as Appendix 7.10 to
this agreement. 

	7.11  	On
the Date of Closing, Amnon and Medi will sign a letter of waiver of claims and an
undertaking to indemnify the Buyer, in the form attached as Appendix 7.11 to
this agreement. 

	8.  	Conditions
Precedent  

	8.1  	Closing
of the transaction between the parties will be conditional on the cumulative fulfillment
of all conditions precedent as follows prior to or on the Date of Closing: 

	8.1.1  	Delivery
to the Buyer of financial statements of the Company and Matan for the years 2004, 2005
and 2006 prepared and audited pursuant to accounting rules of U.S. GAAP signed by the
Sellers’ accountants (Horowitz office) and by the Sellers, all as stated in section
2A1 above. 

	8.1.2  	The
Sellers shall confirm to the Buyer in writing that the representations made in this
agreement are correct also to the Date of Closing (provided that each representation that
relates to a certain date will be accurate for the date to which it relates) and that no
substantial adverse changes in the Company’s situation have occurred from the date
of signature of the agreement and until the Date of Closing. 

	8.1.3  	Obtaining
an authorization from the Investment Center for the transaction subject of this
agreement, including the authorization to transfer the authorized enterprise or the
beneficiary of the Company to the Buyer on the Date of Closing. 

	8.1.4  	Amnon
and Medi and the Buyer will sign the employment agreements attached as Appendices
8.1.4 (a) and 8.1.4(b) to this
agreement respectively, as each agreement includes undertakings of Amnon and Medi
to continue to be employed by the Buyer for a period of three (3) years from the Date of
Closing, as specified in the employment agreements. 

	8.1.5  	At
least 20 of all Company employees, including Amnon, Medi and all key personnel listed in
Appendix 8.1.5, have signed employment agreements with the Buyer, so
that the terms of the employment agreements shall be no less than the current terms as of
the date of this agreement. 

	8.1.6  	Agreement
has been obtained for the assignment of all agreements with customers, suppliers and
third parties, which require agreement, as aforesaid, that are related to the Assets
Being Transferred from the Company or from Matan, as the case may be, to the Buyer and
specified in Appendix 8.1.6. In the event that all agreements
required for assignment, as aforesaid, have not been received, the matter will not be
deemed a condition precedent which was not fulfilled, provided that the Company or Matan,
as the case may be, enters into “back to back” agreements with the Buyer, so
that it is does not damage the full transfer of Assets Being Transferred from the Company
to the Buyer. 

	 	
The
“back to back” agreements, as aforesaid, shall be until the date of obtaining
agreement for assignment or until the date of termination of each agreement, as
aforesaid, whichever of the two is the earlier. The operation of the agreements shall be
performed by the Buyer.  

	8.1.7  	Sagi
Duchovna Naveh, son of Amnon and Medi, will sign an undertaking for non-competition with
Cellocator and Matan for a period of 36 months from the Date of Closing, in the form
attached hereto as Appendix 8.1.7. 

	8.1.8  	On
the Date of Closing, Amnon will hold 100 percent of the issued and paid share capital, on
a fully diluted basis, of Meshi Holdings and 100 percent of the issued and paid share
capital, on a fully diluted basis, of Matan. 

	 	
Notwithstanding
the aforesaid, the Buyer may, at its sole discretion, waive one or more of the conditions
precedent specified above, save for the stipulation in section 8.1.3 above (in relation
to the Investment Center) and Section 8.1.2 (in respect of representations), which it may
waive solely with the agreement of the Sellers, and close the transaction even if the
conditions were not fulfilled.  

	8.2  	In
any event, in which the conditions precedent and/or any one of them have/has not been
fulfilled by September 20, 2007 or a later date agreed upon by the parties, this
agreement shall be null and void. In such event, as aforesaid, and provided that the
parties do their best to fulfill the conditions precedent on time, neither of the parties
shall have any contention and/or claim vis-à-vis the other. 

	9.  	Date
of Closing  

	 	
On
the Date of Closing, the parties will convene in the offices of Yigal Arnon and Assoc.,
at 1 Azrieli Center, Tel Aviv, Round Tower, 46th floor, and all acts specified
herein below will be performed at the same time, will be deemed to have been performed at
the same time and no isolated act will be deemed as completed and no single document will
be deemed as delivered until all the steps are completed and the documents delivered at
that time.  

	9.1  	The
Sellers  

	9.1.1  	The
Sellers will transfer the Assets Being Transferred to the Buyer.

	9.1.2  	The
Sellers will deliver to the Buyer a statutory tax invoice in respect of the Consideration
for the Assets Being Transferred (inclusive of the Cash Consideration, the consideration
in Shares and the consideration in the Debenture) in Advance on Account of the Tangible
Assets, the Differentials in the Value of the Tangible Assets and for the Consideration
of the Profit Embodied in the Iinventory, except if the Buyer received authorization,
pursuant to section 20 of the Value Added Tax Law 5736-1975. 

	9.1.3  	The
Sellers will deliver to the Buyer irrevocable instructions in connection with the bank
account, as stated in section 12.3 herein below. 

	9.1.4  	The
Sellers will deliver to the Buyer a copy of the Registration Rights Agreement, which they
have signed. 

	9.2  	The
Buyer  

	9.2.1  	The
Buyer will pay the Sellers, pursuant to their instructions, the Cash Consideration and,
unless an authorization from the Value Added Tax Authorities is obtained pursuant to
section 20 of the Value Added Tax Law, the VAT in respect of the entire Consideration
(inclusive of the Shares and the Debenture), as required by law. 

	9.2.2  	The
Buyer will issue the Shares to the Sellers, pursuant to their instructions, and will
deliver to the Sellers, pursuant to their instructions, a copy of the registrar of the
shareholders of the Company, testifying to the performance of the issuance and a share
certificate duly signed in respect of the Shares or documents, indicating registration of
the shares in the name of the Sellers with a registration company where the Buyer’s
shares are registered. 

	9.2.3  	The
Buyer will deliver to the Sellers, pursuant to their instructions, the Debenture signed
by the Buyer. 

	9.2.4  	The
Buyer will pay the Sellers, pursuant to their instructions, the Advance on Account of the
Tangible Assets and the consideration for the Profit Embodied in the Inventory and,
unless authorization from the VAT authorities pursuant to section 20 of the VAT Law is
obtained, the VAT in respect of these amounts. 

	9.2.5  	The
Buyer will deliver to the Sellers a signed undertaking by D.B.S.I. Investments Ltd.,
controlling shareholder in the Buyer, in the form attached hereto as
Appendix 9.2.5, to the effect that the Sellers will be able to attach their
Shares in the Buyer to the sale of shares by D.B.S.I. Investments Ltd., as
specified in Appendix 9.2.5.  

	9.2.6  	The
Buyer will deliver the Registration Rights Agreement it has signed to the Sellers. 

	9.3  	For
the avoidance of doubt, it is clarified that insofar as the Buyer or Sellers, as the case
may be, is/are obliged to pay the Difference in Value of the Tangible Assets, the
Difference in Value of the Tangible Assets will be paid with the addition of VAT (save if
an authorization from the VAT authorities is obtained pursuant to section 20 of the VAT
Law) and tax at source will be deducted, unless an exemption from the deduction is
delivered on the dates determined in section 5.3 above. 

	10.  	Taxes
and Payments  

	10.1  	Each
of the parties will bear the taxes that apply to it, pursuant to law, in connection with
the transaction subject of this agreement. 

	10.2  	Each
party will bear its expenses in connection with the transaction, subject of this
agreement, including the fees of its lawyers. 

	11. 	Non-Competition
and Cessation of the Use of the Name Cellocator

	11.1  	The
Sellers undertake that they will not establish, directly or indirectly, a competing
business and will not join, directly or indirectly, an existing competing business, in
the field of Activity as defined herein in this agreement, in the field of activity of
the Buyer as it is currently and as it will be during the period between the date of this
agreement and the termination of employer-employee relations between the Buyer and Amnon,
and six months thereafter, and all this for the period of one year from the date of
termination of Amnon’s employment with the Buyer or three years from the Date of
Closing of the transaction, whichever is the later of the two. 

	 	
The
aforesaid undertaking will also apply to Medi, with the necessary changes, and all this
for a period of one year from the date of termination of her employment with the Buyer or
three years from the Date of Closing of the transaction, whichever is the later.  

	11.2  	Likewise,
commencing on the Date of Closing, the Company will cease to make use of the name
Cellocator as the brand name and/or trademark and/or name that serves in any other
business and the Seller will see to it that, within 30 days of the Date of Closing, its
name at the Registrar of Companies will be changed to a new name, which does not include
the word “Cellocator.”

	12.  	Cooperation
Prior to Closing of the Transaction and Thereafter  

	12.1  	The
parties undertake to cooperate for the purpose of carrying out the provisions of this
agreement on time, to sign every document, bill, petition, power of attorney and any
other document required and to appear before the various authorities and/or lawyers to
complete the acts required to execute this agreement. 

	12.2  	Upon
clsoing of the transaction, the Company and Matan undertake to give the Buyer the right
of use, without any additional consideration, of all documents and databanks of the
Company, inclusive of accounting information, in relation to the Intangible Assets and
the Tangible Assets. 

	12.3  	The
parties further agree that the bank accounts of the Company and Matan, as specified
herein below, will serve the Buyer for the purpose of collecting past debts from
customers and to endorse checks that will arrive in the Company’s name. For the
aforesaid purpose, irrevocable instructions will be given on the Date of Closing to
banks, wherein the bank accounts are held, to transfer all monies collected from
customers included in the Assets Being Transferred to the bank account of the Buyer. 

	 	
And
these are the bank accounts:  

	 	
Cellocator - HSBC Private Banking, a division of HSBC Bank USA,
 N.A.

Account Number: 0605128650

452 Fifth Avenue, New York, New York 10018

Cellocator

United Mizrahi Bank

Hafetz Haim Branch

Petach Tikva

Account Number: 211510

Branch Number: 065

Matan

United Mizrahi Bank

Hafetz Haim Branch

Petach Tikva

Account Number: 287282

Branch Number: 065  

	13.  	Indemnity  

	13.1  	The
Sellers will indemnify the Buyer in respect of any damage and/or loss and/or expense
incurred by the Buyer in respect of inaccurate and/or incomplete declaration/s and/or
presentation/s that the Sellers gave the Buyer and/or in respect of the failure to
fulfill their undertakings pursuant to this agreement. 

	13.2  	Notwithstanding
the aforesaid in section 13.1 above, the indemnity shall not apply unless
above a cumulative floor of indemnities in the amount of USD 250,000 (two
hundred and fifty thousand dollars U.S.) (hereinafter: "the Floor Amount"). 

	13.3  	If
the total of damages rises above the Floor Amount, any damage will be paid, inclusive
of the Floor Amount, up to a cumulative amount that does not exceed the total
of the Cash Consideration (hereinafter: "the Ceiling Limit"). 

	13.4  	Notwithstanding
the aforesaid, it is clarified that in the event of a declaration or presentation that
the Sellers gave and/or did not give in this agreement fraudulently, with intent to
mislead or with malice, the limits determined in sections 13.2 and 13.3 above will not
apply. 

	13.5  	Without
derogating from the generality of the aforesaid herein in this agreement, the Sellers
undertake to assume and with full liability any undertaking and/or liability and/or
expense to the Chief Scientist and the Investment Center that result from the activities
of the Company and/or Matan prior to the Date of Closing and to indemnify the Buyer with
full indemnity in respect of any expense and/or damage and/or demand on the part of the
Chief Scientist and/or the Investment Center in connection with the Company and/or Matan
prior to the Date of Closing, all this, save if it resulted from a breach of the Buyer’s
Undertakings in Respect of the Authorized Enterprise (as defined above). 

	13.6  	The
parties agree that the Sellers will not be obligated to indemnity in respect of a demand,
claim, damage and/or loss and/or expense, as aforesaid in section 13.1 above, for which
notice in respect thereof was delivered to the Sellers following the expiration of a
period of 24 months from the Date of Closing, other than in connection with the
undertakings of the Sellers, as specified in section 13.5 above and, in the event of an
incorrect and/or inaccurate representation in relation to the Intellectual Property, as
specified in section 2.9 above, in connection with which the statutory limitation of
action will apply. 

	13.7  	The
parties declare and agree that the provisions of indemnity pursuant to this section 13
shall be the sole relief for the Buyer vis-à-vis the Sellers in respect of an
inaccurate and/or incomplete declaration/s and/or presentation/s, which the Sellers made
and/or in respect of the failure to fulfill the undertakings of the Sellers, pursuant to
this agreement, save for in the event of fraud, intent to mislead or malice on the part
of the Sellers. 

	13.8  	The
Liability of the Sellers and the Liability of the Buyer 

	 	
Unless
otherwise explicitly stated herein in this agreement, the Sellers will be liable in
respect of claims or demands of third parties in connection with the Activity (as defined
above) of the Sellers and/or the Assets Being Transferred, the grounds for which arose up
to the Date of Closing (“A Claim under the Sellers’ Liability”),
while the Buyer will be liable in respect of claims or demands of third parties in
connection with the Activity (as defined above) and/or the Assets Being Transferred, the
grounds for which arose commencing on the Date of Closing (“A Claim under the
Buyer’s Liability”).  

	 	
The
Sellers undertake to indemnify the Buyer in respect of any Claim Under the Sellers’ Liability,
which is filed, if such is filed, against the Buyer. However, the Buyer will have no
contention, demand and/or claim vis-à-vis the Sellers in respect of a claim in the
Sellers’ liability, unless: (a) the Buyer notified the Sellers of the claim under
the Sellers’ liability, as aforesaid, within 14 days following the Buyer’s
learning thereof; (b) the Buyer agreed that the Sellers participate in the Defense and
enabled them to do so, insofar as the matter is contingent on them, or, if the Sellers
requested such, to conduct the Defense jointly in a claim of a third party, as aforesaid,
by means of an attorney on behalf of the Sellers, all including by means of joining the
Sellers to any proceeding; and (c) the Buyer will not agree to a settlement in connection
with a third party’s claim, as aforesaid, other than with the advance and written
agreement of the Sellers, which shall not be refused except on reasonable grounds.  

	 	
The
Buyer undertakes to indemnify the Sellers in respect of any Claim under the Buyer’s
Liability and which is filed, if such is filed, against the Sellers or any one of them.
However, the Sellers will have no contention, demand and/or claim vis-à-vis the
Buyer in respect of any claim under the Buyer’s liability unless: (a) the Sellers
notified the Buyer of the claim under the Buyer’s liability, as aforesaid, within 14
days following the Sellers learning thereof; (b) the Sellers agreed that the Buyer would
participate in the Defense and enabled it do so, insofar as the matter is dependent on
them or, if the Buyer requested such, to jointly conduct the Defense against a third
party claim, as aforesaid, by means of an attorney on behalf of the Buyer, all including
by means of attaching the Buyer to any proceeding; and (c) the Sellers will not agree to
a settlement in connection with a third party claim, as aforesaid, unless with the
advance and written agreement of the Buyer which shall not be refused except on
reasonable grounds.  

	14.  	Miscellaneous  

	14.1  	The
parties undertake to act jointly and in good faith for the correct, just and effective
execution of this agreement and for this purpose the parties undertake to sign any
document and appear before any authority, as necessary. 

	14.2  	This
agreement expresses the complete and exhaustive agreement between the parties in respect
of the issues and matters discussed herein and it replaces and cancels any
representation, memorandum, offers, summations, letters of intent and/or undertaking, and
any other document, that prevailed or were exchanged (whether in writing or verbally) on
the aforesaid subjects and matters, between the parties, prior to the signature of this
agreement. Notwithstanding the aforesaid, a letter of confidentiality signed by the
Company and the Buyer will continue to constitute a binding document between the parties
and will expire solely on the Date of Closing of the transaction. 

	14.3  	All
that has been stated herein in this agreement in the singular also implies the plural and
all that has been stated in the masculine gender also implies the feminine, and vice
versa, and all as long as the opposite of that which is stated is not implied in the
context of matters. 

	14.4  	The
agreement of any one of the parties to diverge from any condition whatsoever of this
agreement, in a certain event or series of events, will be made in writing with the
signature of the parties and will not constitute a precedent and no inference by analogy
may be made to any other event in future. 

	14.5  	If
any of the parties does not exercise or exercised late any right whatsoever of the rights
granted to it, pursuant to this agreement and/or by virtue of the law, in a specific
event or a series of events, this will not be viewed as a waiver of the said right or any
other rights whatsoever. 

	14.6  	If
a provision of this agreement is not valid or there is no possibility of enforcing it,
the validity of the remaining provisions of this agreement will not be affected and the
agreement will be fulfilled insofar as is possible to fulfill the original provisions, in
accordance with the spirit of the agreement. 

	14.7  	Any
condition of the conditions of this agreement shall be amended solely on the basis of a
written document signed by each of the parties to this agreement. 

	14.8  	Erasures
and amendments made to drafts of this agreement that were exchanged by the parties within
the confines of negotiations for the signature of this agreement shall have no
significance whatsoever for the interpretation thereof. 

	14.9  	The
undertakings and rights of any of the parties pursuant to this agreement are not
transferable and/or given to assignment and/or encumbrance unless the other party have
agreed thereto in advance and in writing. 

	14.10  	The
substantial law which applies to this agreement are the laws of the State of Israel and
the jurisdiction for all matters pertaining to this agreement and/or ensuing from it are
granted to the competent courts in Tel Aviv and solely thereto. 

	14.11  	The
parties undertake to coordinate among them for the form of notices to the press, which
they will issue in connection with the transaction. 

	15.  	Notices
and Addresses  

	 	
The
addresses of the parties for the purposes of this agreement are as specified in the
preamble thereto and any notice that is sent by registered mail by any party to the
other, pursuant to its address as stated above or to any other address that it has
provided written notice thereof to the other parties, shall be deemed to have arrived at
its destination after three business days from the time of its delivery for mailing by
registered mail and/or on the first business day after the day it was hand delivered in
person.  

In Witness Whereof the Parties Have Signed: 

	——————————————

Cellocator Ltd. 	——————————————

Pointer Telocation Ltd. 

	——————————————

Matan Y. Communication and 
Tracking Systems Ltd.  	——————————————

Amnon Duchovna-NavehTURBOCHEF TECHNOLOGIES, INC.

SECOND AMENDMENT TO

2003 STOCK INCENTIVE PLAN

 

Background

 

TurboChef Technologies, Inc. (the “Company”) adopted its 2003 Stock Incentive Plan (the “Plan”) on October 29, 2003.  Under Section 4.1 of the Plan, the total number of shares of Common Stock of the Company available for grant of Awards under the Plan was six million (6,000,000) shares.  Effective April 1, 2004, the Company amended the Plan to increase the number of shares available for Award grants to ten million (10,000,000) shares.  The amended Plan was approved by stockholders of the Company on July 19, 2004.  Effective December 27, 2004, the Company effected a 1-for-3 reverse split of its outstanding shares, and the number of shares available for Award grants under the Plan adjusted pursuant to Section 4.4 of the Plan to 3,333,333 shares.  Under Section 13.1 of the Plan the Committee, defined in the Plan as the Compensation Committee of the Company’s Board of
Directors, is authorized at any time to amend the Plan.  The Company’s Board of Directors deemed it advisable that the number of shares available for grant of Awards be increased by an additional 2,000,000 shares, to a total of 5,333,333 shares, and by consent on June 6, 2005, the Board, including the members of the Compensation Committee, approved the amendment and recommended it for approval by the stockholders.  On July 19, 2005, the amendment was approved by the Company’s stockholders.

 

Amendment

 

The Plan, as amended, is further amended, effective July 19, 2005, by deleting the first sentence of Section 4.1 thereof and substituting in lieu thereof the following sentence:

 

Subject to adjustment as provided in Section 4.4, effective July 19, 2005 the total number of Shares available for grant of Awards under the Plan shall be five million three hundred thirty three thousand three hundred thirty three (5,333,333) Shares, subject to Awards granted prior to the effective date, all of which may be granted as Incentive Stock Options.

 

 

By authority of the Board of Directors

 

 

/s/ Dennis J. Stockwell

Dennis J. Stockwell

Secretary

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