Document:

Exhibit
      10.8

    

    CHINA
      TRANSINFO TECHNOLOGY CORP.

    

    NOTICE
      OF STOCK OPTION GRANT

    

      
        	
                Name:
                    Zhongsu
                  Chen

              	
                Address:

              	
                366
                  Pucheng Road, Bldg #2, Suite 2902

              
	 	 	
                Shanghai
                  China 200120

              

      

    

     

    You
      have
      been granted an option (the “Option”)
      to
      purchase common stock (“Shares”)
      of
China
      TransInfo Technology Corp
      (the
“Company”),
      subject to the terms and conditions of the attached Stock Option Agreement,
      as
      follows:

    

      
        	
                Date
                  of Grant:

              	 	
                May
                  1, 2008

              
	 	 	 
	
                Vesting
                  Commencement Date:

              	 	
                May
                  1, 2008

              
	 	 	 
	
                Exercise
                  Price per Share:

              	 	
                $6.50

              
	 	 	 
	
                Total
                  Number of Shares Granted:

              	 	
                30,000

              
	 	 	 
	
                Total
                  Exercise Price:

              	 	
                $195,000

              
	 	 	 
	
                Type
                  of Option:

              	 	
                Non-Qualified
                  Stock Option

              
	 	 	 
	
                Expiration
                  Date:

              	 	
                May
                  1, 2013

              

      

    

    
       

      Vesting
        Schedule:

    

    

    The
      Option vests in equal installments on a quarterly basis over a three-year period
      beginning on the Date of Grant.

    

    Termination
      Period:

    

    To
      the
      extent vested, this Option will be exercisable for three (3) months after the
      Termination Date, unless (i) termination is due to Optionee’s death or
      Disability, in which case this Option will be exercisable for twelve (12) months
      after the Termination Date or (ii) the Optionee is Terminated for Cause, in
      which case this Option will terminate on the Termination Date. In no event
      may
      this Option be exercised later than the Expiration Date provided above.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CHINA
      TRANSINFO TECHNOLOGY CORP.

     

    STOCK
      OPTION AGREEMENT

    

    This
      STOCK
      OPTION AGREEMENT (“Agreement”),
      dated
      as of the 1st
      day
      of
      May, 2008 is made by and between China TransInfo Technology Corp., a Nevada
      corporation (the “Company”),
      and
Zhongsu
      Chen
      (the
“Optionee”).

    

    BACKGROUND

    

    The
      Company, acting through its Board of Directors (the “Board”),
      approved the grant to the Optionee, effective as of the date set forth above,
      of
      a stock option (“Option”)
      to
      purchase shares of the common stock,
      par value $.001 per share (the “Shares”),
      of
      the
      Company at the price (the “Exercise
      Price”)
      set
      forth in the attached Notice of Stock Option Grant (which is expressly
      incorporated herein and made a part hereof, the “Notice
      of Grant”),
      upon
      the terms and conditions hereinafter set forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises and undertakings hereinafter set forth,
      the
      parties hereto agree as follows:

     

    1. Grant
      of Option.
      On
      behalf of the Company, the Board hereby grants to the Optionee an Option to
      purchase, subject to the terms and conditions of this Agreement, that number
      of
      Shares of the Company set forth in the Notice of Grant (the “Optioned
      Shares”),
      at an
      exercise price per share equal to the Exercise Price set forth in the Notice
      of
      Grant, subject to the terms and conditions of this Agreement. The Option is
      intended to be a Non-Qualified Stock Option, meaning that it is not qualified
      as
      an “Incentive Stock Option” as described in Section 422 of the Internal Revenue
      Code of 1986 (“Code”), as amended.

     

    2. Term. The
      term
      of the Option commences on the date of this Agreement and expires on the
      Expiration Date set forth in the Notice of Grant unless otherwise terminated
      in
      accordance with the terms of the Notice of Grant or this Agreement.

     

    3. Time
      of Exercise. Except
      as
      otherwise provided in this section or unless accelerated in the discretion
      of
      the Board, the Option will become exercisable during its term in accordance
      with
      the Vesting Schedule set forth in the Notice of Grant. Shares as to which the
      Option becomes exercisable may be purchased at any time prior to the expiration
      or termination of the Option.

     

    4. Termination
      of Option.

     

    (a) If
      the
      Optionee is Terminated for any reason except death or Disability, then the
      Optionee may exercise the Option (i) only to the extent that the Option would
      have been exercisable on the Termination Date and (ii) no later than three
      months after the Termination Date, but in any event, no later than the
      Expiration Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) If
      the
      Optionee is Terminated because of the Optionee’s death or Disability (or the
      Optionee dies within three months after a Termination other than for Cause
      or
      because of Optionee’s Disability), then the Option (i) may be exercised only to
      the extent that such Option would have been exercisable by the Optionee on
      the
      Termination Date and (ii) must be exercised by the Optionee (or the Optionee’s
      legal representative or authorized assignee) no later than twelve months after
      the Termination Date, but in any event no later than the Expiration
      Date.

     

    (c) Notwithstanding
      the provisions in paragraphs 4(b) and 4(c), if the Optionee is Terminated for
      Cause, neither the Optionee, the Optionee’s estate nor such other person who may
      then hold the Option will be entitled to exercise the Option whatsoever, whether
      or not, after the Termination Date, the Optionee may receive payment from the
      Company or any Parent, Subsidiary or Affiliate of the Company for vacation
      pay,
      for services rendered prior to the Termination Date, for services rendered
      for
      the day on which Termination occurs, for salary in lieu of notice, for severance
      or for any other benefits; provided,
      however,
      that the
      Board will give the Optionee an opportunity to present to the Board evidence
      on
      the Optionees’s behalf that the provisions of this paragraph 4(d) should not
      apply and, in the alternative, paragraph 4(b) or 4(c) will apply. For the
      purpose of this paragraph 4(d), Termination will occur on the date when the
      Company provides written notice to the Optionee that the Optionee is
      Terminated.

     

    5. Method
      of Exercise.
      This
      Option is exercisable by delivery of an exercise notice in the form attached
      as
      Exhibit A (the “Exercise Notice”) or in a manner and pursuant to procedures as
      the Board may determine, which will state the election to exercise the Option,
      the number of Shares for which the Option is being exercised, and other
      representations and agreements as may be required by the Company. The Exercise
      Notice will be accompanied by payment of the aggregate Exercise Price as to
      all
      Shares being acquired, together with any applicable tax withholding. This Option
      will be deemed to be exercised upon receipt by the Company of a fully executed
      Exercise Notice accompanied by the aggregate Exercise Price, together with
      any
      applicable tax withholding. 

     

    6. Method
      of Payment.
      Payment
      of the aggregate Exercise Price may be by any of the following, or a combination
      thereof, at the election of the Optionee: 

     

    (a) cash;
      

     

    (b) check;

     

    (c) to
      the
      extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, a
      promissory note;

     

    (d) to
      the
      extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002,
      surrender of other Shares which have a Fair Market Value on the date of
      surrender equal to the aggregate Exercise Price of the Shares being acquired;
      

     

    (e) by
      asking
      the Company to withhold Shares from the total Shares to be delivered upon
      exercise equal to the number of Shares having a value equal to the aggregate
      Exercise Price of the Shares being acquired;

     

    (f) in
      accordance with any broker-assisted cashless exercise procedures approved by
      the
      Company and as in effect from time to time;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (g) any
      combination of the foregoing methods of payment; or

     

    (h) other
      consideration and method of payment for the issuance of Shares to the extent
      permitted by applicable laws.

     

    7. Taxes.
      

     

    (a) Withholding.
      Optionee agrees to arrange for the satisfaction of all federal, state, local
      and
      foreign income and employment tax withholding requirements applicable to the
      Option exercise. Optionee acknowledges and agrees that the Company may refuse
      to
      honor the exercise and refuse to deliver the Shares if withholding amounts
      are
      not delivered at the time of exercise.

     

    (b) Code
      Section 409A.
      Under
      Code Section 409A, an Option that vests after December 31, 2004 that was granted
      with a per Share exercise price that is determined by the Internal Revenue
      Service (the “IRS”) to be less than the Fair Market Value of a Share on the date
      of grant (a “discount option”) may be considered “deferred compensation.” An
      Option that is a discount option may result in (i) income recognition by the
      Optionee prior to the exercise of the Option, (ii) an additional twenty percent
      (20%) tax, and (iii) potential penalty and interest charges. Optionee
      acknowledges that the Company cannot and has not guaranteed that the IRS will
      agree that the per Share exercise price of this Option equals or exceeds the
      fair market value of a Share on the date of grant in a later examination.
      Optionee agrees that if the IRS determines that the Option was granted with
      a
      per Share exercise price that was less than the Fair Market Value of a Share
      on
      the date of grant, Optionee shall be solely responsible for Optionee’s costs
      related to such a determination.

     

    8. Legal
      Compliance. Optionee may not exercise the Option unless the
      exercise
      of the Option and the issuance of the Optioned Shares comply with applicable
      law. The Company will be relieved of any liability with respect to any delayed
      issuance of shares or its failure to issue shares if such delay or failure
      is
      necessary to comply with applicable laws.

     

    9. Adjustments
      Upon Changes in Capitalization. In
      the
      event that any dividend or other distribution (whether in the form of cash,
      Shares, other securities, or other property), recapitalization, stock split,
      reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
      combination, repurchase, or exchange of Shares or other securities of the
      Company, or other change in the corporate structure of the Company affecting
      the
      Shares occurs, the Board, in order to prevent diminution or enlargement of
      the
      benefits or potential benefits intended to be made available under this Option,
      will equitably adjust the number, class, and Exercise Price of Shares covered
      by
      this Option to prevent enlargement or diminution of the value of this Option.
      Any such adjustment shall be done in a manner consistent with Code Section
      409A
      and Treasury Regulations section 1.409A-1 et seq.

     

    10. Investment
      Representation and Legend of Certificates. 

     

    (a) The
      Optionee acknowledges and agrees that, for any period in which a registration
      statement, with respect to the Option and/or Shares under the Securities Act
      of
      1933, as amended (the “Securities Act”), is not effective, the Optionee will
      hold the Option and will purchase and/or own the Optioned Shares for investment
      and not for resale or distribution. The Company will have the right to place
      upon the face and/or reverse side of any stock certificate or certificates
      evidencing the Optioned Shares such legend as the Board may prescribe for the
      purpose of preventing disposition of such Optioned Shares in violation of the
      Securities Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) If
      a
      registration statement under the Securities Act is not in effect with respect
      to
      the Shares issuable upon exercise, the Company may require as a condition
      precedent that the Optionee, upon exercising the Option, deliver to the Company
      a written representation and undertaking, satisfactory in form and substance
      to
      the Company, that, among other things, the Optionee is acquiring the Shares
      for
      his own account for investment and not with a view to or for sale in connection
      with any distribution of the security. 

     

    11. No
      Evidence of Employment or Service. Nothing
      contained in this Agreement confers upon the Optionee any right to continue
      in
      employment with the Company, its parent or any of its subsidiaries or interfere
      in any way with the right of the Company, its parent or its subsidiaries
      (subject to the terms of any separate agreement to the contrary) to terminate
      the Optionee’s business relationship or to increase or decrease the Optionee’s
      compensation at any time.

     

    12. Non-Transferability
      of Option. This
      Option may not be transferred in any manner otherwise than by will or by the
      laws of descent or distribution and may be exercised during the lifetime of
      the
      Optionee only by the Optionee. The terms of this Agreement is binding upon
      the
      executors, administrators, heirs, successors and assigns of the
      Optionee.

     

    13. Specific
      Performance.
      The
      Optionee expressly agrees that the Company will be irreparably damaged if the
      provisions of this Agreement are not specifically enforced. Upon a breach or
      threatened breach of the terms, covenants and/or conditions of this Agreement
      by
      the Optionee, the Company will, in addition to all other remedies, be entitled
      to a temporary or permanent injunction, without showing any actual damage,
      and/or decree for specific performance, in accordance with the provisions hereof
      and thereof. The Board has the power to determine what constitutes a breach
      or
      threatened breach of this Agreement. Any such determinations will be final
      and
      conclusive and binding upon the Optionee.

     

    14. Notices. All
      notices or other communications which are required or permitted hereunder will
      be in writing and sufficient if
      personally delivered or sent by telecopy,
      sent by
      nationally-recognized overnight courier, or
      sent by
      registered or certified mail, postage prepaid, return receipt requested,
      addressed as follows: 

     

    (a) if
      to the
      Optionee, to the address (or telecopy number) set forth on the Notice of Grant;
      and

     

    (b) if
      to the
      Company, to its principal executive office as specified in any report filed
      by
      the Company with the Securities and Exchange Commission or to such address
      as
      the Company may have specified to the Optionee in writing, Attention: Corporate
      Secretary;

     

    or
      to
      such other address as the party to whom notice is to be given may have furnished
      to the other party in writing in accordance herewith. Any such communication
      will be deemed to have been given (i) when delivered, if personally delivered,
      or when telecopied, if telecopied, (ii) on the first Business Day (as
      hereinafter defined) after dispatch, if sent by nationally-recognized overnight
      courier and (iii) on the third Business Day following the date on which the
      piece of mail containing such communication is posted, if sent by mail. As
      used
      herein, “Business Day” means a day that is not a Saturday, Sunday or a day on
      which banking institutions in the city to which the notice
      or
      communication is to be sent are not required to be open.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    15. No
      Waiver. No
      waiver
      of any breach or condition of this Agreement will be deemed to be a waiver
      of
      any other or subsequent breach or condition, whether of like or different
      nature.

     

    16. Optionee
      Undertaking. The
      Optionee agrees to take whatever additional actions and execute whatever
      additional documents the Company may in its reasonable judgment deem necessary
      or advisable in order to carry out or effect one or more of the obligations
      or
      restrictions imposed on the Optionee pursuant to the express provisions of
      this
      Agreement.

     

    17. Definitions.
      For
      purposes of this Agreement and the Notice of Grant, capitalized terms have
      the
      following meanings:

     

    (a) “Affiliate”
      means any entity or person that directly, or indirectly through one or more
      intermediaries, controls, is controlled by, or is under common control with,
      another entity, where “control” (including the terms “controlled by” and “under
      common control with”) means the possession, directly or indirectly, of the power
      to cause the direction of the management and policies of the entity, whether
      through the ownership of voting securities, by contract or
      otherwise.

     

    (b) “Cause”
      means (i) the conviction of the Optionee of a crime involving a sentence of
      incarceration or of a felony with or without a sentence of incarceration; (ii)
      the commission of an act by the Optionee constituting fraud, embezzlement or
      other material financial dishonesty against the Company, or of an act of moral
      turpitude which in the opinion of counsel to the Company would constitute a
      crime under the laws of the United States or China (or any of their state or
      local laws) and which, in case of any of the foregoing, in the good faith
      judgment of the Company, is likely to cause harm to the business of the Company,
      taken as a whole; (iii) the repeated refusal or failure by the Optionee to
      use
      his reasonable and diligent efforts to follow the lawful and reasonable
      directives of the Chief Executive Officer or Board with respect to a matter
      or
      matters within the control of the Optionee; (iv) the Optionee’s willful or gross
      neglect in carrying out his material duties and responsibilities under any
      employment agreement with the Company; or (v) a material breach by the Optionee
      of any provision of any employment agreement with the Company.

     

    (c) “Disability”
      has the meaning provided in the Optionee’s employment agreement. If “Disability”
is not defined therein, “Disability” means the inability of the Optionee to
      perform the duties of his position or any substantially similar employment
      position by reason of a physical or mental disability or infirmity for a
      continuous period of six months, as determined by the Board. The date of such
      Disability will be the last day of such six-month period or the date on which
      the Optionee submits such medical evidence, satisfactory to the Company, that
      the Optionee has a physical or mental disability or infirmity that will likely
      prevent the Optionee from performing the Optionee’s work duties for a continuous
      period of six months or longer, as the case may be. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d) “Parent”
      means any corporation (other than the Company) in an unbroken chain of
      corporations ending with the Company, if each of the corporations in the chain
      (other than the Company) owns stock possessing 50% or more of the combined
      voting power of all classes of stock in one of the other corporations in the
      chain.

     

    (e) “Subsidiary”
      means any corporation (other than the Company) in an unbroken chain of
      corporations beginning with the Company, if each of the corporations (other
      than
      the last corporation) in the unbroken chain owns stock possessing 50% or more
      of
      the total combined voting power of all classes of stock in one of the other
      corporations in the chain.

     

    (f) “Termination”
      or “Terminated” means that the Optionee has for any reason ceased to provide
      services as an employee, officer, director, Optionee, independent contractor,
      or
      advisor to the Company or any Parent, Subsidiary or Affiliate of the Company.
      The Optionee will not be deemed to have ceased to provide services in the case
      of (i) sick leave, (ii) military leave, or (iii) any other leave of absence
      approved by the Board, provided, that such leave is for a period of not more
      than three months, unless reemployment or reinstatement upon the expiration
      of
      such leave is provided by contract or statute. In the case the Optionee is
      on an
      approved leave of absence, the Board may suspend vesting of the Option while
      the
      Optionee is on leave from the Company or any Parent, Subsidiary or Affiliate
      of
      the Company. The Board has the sole discretion to determine whether the Optionee
      has ceased to provide services and the applicable Termination Date.

     

    (g) “Termination
      Date” means the effective date of Termination, as determined by the
      Board.

     

    18. Interpretation.
      The
      Company intends that no payments under this Agreement will be
      subject
      to the tax imposed by Code Section 409A. This agreement will be interpreted
      and
      administered in a manner that avoids the imposition of any increase in tax
      under
      Code section 409A(a)(1)(B), and any ambiguities herein will be interpreted
      to
      satisfy the requirements of Code section 409A or any exemption thereto.

     

    19. Governing
      Law. This
      Agreement is governed by, and will be construed in accordance with, the laws
      of
      the State of Nevada applicable to contracts made and to be wholly performed
      therein, without giving effect to its conflicts of laws principles.

     

    20. Counterparts;
      Facsimile Execution. This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed to be an original, but all of which together will constitute one and
      the
      same instrument. Facsimile execution and delivery of this Agreement is legal,
      valid and binding execution and delivery for all purposes.

     

    21. Entire
      Agreement. This
      Agreement (including the Notice of Grant and the Exercise Notice) constitute
      the
      entire agreement between the parties with respect to the subject matter hereof,
      and supersedes all previously written or oral negotiations, commitments,
      representations and agreements with respect to the subject matter hereof, and
      may not be modified adversely to the Optionee’s interest except by means of a
      writing signed by the Company and Optionee. 

     

    22. Severability. In
      the
      event one or more of the provisions of this Agreement should, for any reason,
      be
      held to be invalid, illegal or unenforceable in any respect, such invalidity,
      illegality or unenforceability will not affect any other provisions of this
      Agreement, and this Agreement will be construed as if such invalid, illegal
      or
      unenforceable provision had never been contained herein. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    23. WAIVER
      OF JURY TRIAL. THE
      OPTIONEE HEREBY EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
      JURY
      IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
      COUNTERCLAIM THEREIN.

     

    By
      Optionee’s signature and the signature of the Company’s representative below,
      Optionee and the Company agree that this Option is granted under and governed
      by
      the terms and conditions of this Agreement. Optionee has reviewed this Agreement
      in its entirety, has had an opportunity to obtain the advice of counsel prior
      to
      executing this Agreement and fully understands all provisions of this Agreement.
      

    

      
        	
                CHINA
                  TRANSINFO TECHNOLOGY CORP.

              
	 
	
                By: /s/
                  Shudong
                  Xia                                                        
                  

              
	
                Name:
                  Shudong Xia

              
	
                Title:
                  Chief Executive Officer

              
	 
	
                OPTIONEE

              
	 
	
                /s/
                  Zhongsu
                  Chen                                                                 

              
	
                Zhongsu
                  Chen

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    CHINA
      TRANSINFO TECHNOLOGY CORP.

    

    EXERCISE
      NOTICE

     

    China
      TransInfo Technology Corp

    717
      E-wing Center No. 113 Zhichu Road

    Haidian
      District, Beijing China 100086

    

    1. Exercise
      of Option.
      Effective as of today, ________________, 20__, the undersigned (“Optionee”)
      hereby elects to purchase______________ shares of the common stock (the
“Shares”) of China TransInfo Technology Corp (the “Company”) under the option
      (the “Option”) represented by the Stock Option Agreement dated May 1, 2008 (the
“Option Agreement”).

     

    2. Delivery
      of Payment.
      Optionee herewith delivers to the Company the full purchase price for the Shares
      and any and all withholding taxes due in connection with the exercise of the
      Option. 

     

    3. Representations
      of Optionee.
      Optionee acknowledges that Optionee has received, read and understood the Option
      Agreement and agrees to abide by and be bound by its terms and
      conditions.

     

    4. Rights
      as Stockholder.
      Until
      the issuance (as evidenced by the appropriate entry on the books of the Company
      or of a duly authorized transfer agent of the Company) of the Shares, no right
      to vote or receive dividends or any other rights as a stockholder will exist
      with respect to the Optioned Stock, notwithstanding the exercise of the Option.
      The Shares so acquired will be issued to the Optionee as soon as practicable
      after exercise of the Option. No adjustment will be made for a dividend or
      other
      right for which the record date is prior to the date of issuance, except as
      provided in the Option Agreement.

     

    5. Tax
      Consultation.
      Optionee understands that Optionee may suffer adverse tax consequences as a
      result of Optionee’s purchase or disposition of the Shares. Optionee represents
      that Optionee has consulted with any tax consultants Optionee deems advisable
      in
      connection with the purchase or disposition of the Shares and that Optionee
      is
      not relying on the Company for any tax advice.

     

    6. Successors
      and Assigns.
      The
      Company may assign any of its rights under this Exercise Notice to single or
      multiple assignees, and this Exercise Notice will inure to the benefit of the
      successors and assigns of the Company. Subject to the restrictions on transfer
      herein set forth, this Exercise Notice is binding upon Optionee and his or
      her
      heirs, executors, Boards, successors and assigns.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7. Entire
      Agreement; Governing Law.
      The
      Option Agreement and Notice of Grant are incorporated herein by reference.
      This
      Exercise Notice, the Option Agreement, and Notice of Grant constitute the entire
      agreement of the parties with respect to the subject matter hereof and supersede
      in their entirety all prior undertakings and agreements of the Company and
      Optionee with respect to the subject matter hereof, and may not be modified
      adversely to the Optionee’s interest except by means of a writing signed by the
      Company and Optionee. This Exercise Notice is governed by the internal
      substantive laws, but not the choice of law rules, of Nevada. 

     

    
      	
              Submitted
                by:

            	 	
              Accepted
                by:

            
	 	 	 
	
              Optionee

            	 	
              CHINA
                TRANSINFO TECHNOLOGY CORP

            
	 	 	 
	
              Signature

               

              ___________________________________

              Print
                Name

               

              Zhongsu
                Chen

              366
                Pucheng Road, Bldg #2, Suite 2902
Shanghai China 200120

            	 	
              Signature

               

              ___________________________________

              Print
                Name

              _Shudong
                Xia_______________________

              Address:

              717
                E-wing Center No. 113 Zhichu Road

              Haidian
                District, Beijing China 100086

               

              Date
                Received: __________STOCK
      PURCHASE AGREEMENT

    

    THIS
      STOCK PURCHASE AGREEMENT (this “Agreement”) is made this 30th
      day of
      April, 2008, among PCMT Corporation, a Delaware corporation (the “Company”),
      Suspect Detection Systems Ltd., an Israeli corporation (“SDS”), Shabtai Shoval,
      the chief executive officer of SDS (the “Principal”), and the shareholders of
      SDS that are identified on Exhibit
      A
      annexed
      hereto, including the Principal (each a “Seller” and collectively the
“Sellers”). 

    

    RECITALS

    

    A. Sellers
      are the owners of 100% of the issued and outstanding shares of SDS (the
“Shares”).

    

    B. The
      persons (the “Optionees”) whose names are set forth on Schedule 5.2 annexed
      hereto are the owners of 100% of the issued and outstanding securities of SDS
      that are convertible or exercisable into shares of SDS (the “SDS Convertible
      Securities”).

    

    C. The
      Company’s common stock, $0.0001 par value (the “Common Stock”), is registered
      under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
      “Exchange Act”) and quoted for trading on the OTC Bulletin Board. 

    

    D. Pursuant
      to the terms and conditions of this Agreement, Sellers desire to sell, and
      the
      Company desires to purchase, all of the Sellers’ rights, title, and interest in
      and to all of the Shares as further described herein.

    

    E. As
      contemplated by this Agreement, at the Closing (hereafter defined), the
      Optionees shall surrender all of the SDS Convertible Securities and all of
      their
      rights, title and interest therein, and in exchange therefor, the Company shall
      issue to the Optionees options to purchase shares of Common Stock (the “Company
      Options”). The number of shares of Common Stock into which the Company Options
      to be granted to each such Optionee at the Closing shall be exercisable shall
      equal the aggregate of the Consideration Shares and Underlying Shares issued
      and
      granted at Closing multiplied by the percentage holdings in SDS on a fully
      diluted basis represented by the SDS Option Shares held by each Optionee (the
      shares of Common Stock underlying the Company Options, the “Underlying Shares”).

    

    NOW,
      THEREFORE, in consideration of the covenants, promises and representations
      set
      forth herein, and for other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, and intending to be legally bound
      hereby, the parties agree as follows: 

    

    1.
       Agreement
      to Purchase and Sell.
      Subject
      to the terms and conditions of this Agreement, at the Closing, the Sellers
      shall
      sell, assign, transfer, convey, and deliver to the Company, and the Company
      shall accept and purchase, the Shares and any and all of their respective
      rights, title and interest in the Shares, and by doing so Sellers shall be
      deemed to have assigned all of their rights, title and interests in and to
      the
      Shares to the Company. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.
       Consideration.

    

    (a) In
      consideration for the Shares and the SDS Convertible Securities, at the Closing
      the Company shall issue and deliver to the Sellers an aggregate of 21,768,063
      shares of Common Stock (the “Consideration Shares”) and to the Optionees Company
      Options exercisabe into an aggregate of 6,831,937 Underlying Shares. The number
      of Consideration Shares issued to each Seller at the Closing shall be as
      indicated next to such Seller’s name on Exhibit
      A
      annexed
      hereto.

    

    (b) The
      Consideration Shares and the Underlying Shares are intended to represent 31%
      of
      (i) the issued and outstanding shares of Common Stock on the earlier of (x)
      the
      date that the Investment Target, as defined in Section 7.1 below, is achieved
      (the “Investment Target Achievement Date”) and (y) December 1, 2008 (the
“Investment Target Cut-Off Date”), plus (ii) any shares of Common Stock in
      excess of 500,000 shares issuable upon the exercise of options, warrants or
      other securities convertible into shares of Common Stock or pre-emptive rights,
      issued or granted by the Company, or undertaken to be issued or granted by
      the
      Company, after the date of this Agreement and on or before the earlier of the
      Investment Target Achievement Date and the Investment Target Cut-Off Date (the
      earlier of the Investment Target Achievement Date and the Investment Target
      Cut-Off Date, the “Break Date”).  The calculation of 31% of issued and
      outstanding shares of Common Stock shall exclude, for all purposes, shares
      of
      Common Stock to be held in escrow pursuant to Section 7.1 below, for the removal
      of doubt, whether or not such shares of Common Stock shall be cancelled or
      transferred pursuant to Section 7.1 below (the “Escrowed Shares”).  The
      number of issued and outstanding shares of Common Stock on the Break Date plus
      shares of Common Stock in excess of 500,000 shares issuable upon exercise of
      options, warrants or other securities convertible into shares of Common Stock
      or
      pre-emptive rights, as aforesaid, not taking into account the Escrowed Shares
      as
      aforesaid, is referred to hereinafter as the “Net Number of Shares.”  In
      the event that the Consideration Shares and the Underlying Shares represent
      less
      than 31% of the Net Number of Shares on the Break Date, the Company shall issue
      and deliver such number of additional shares of Common Stock to the Sellers
      which, in the aggregate and in addition to the Consideration Shares delivered
      at
      the Closing, shall represent 23.59% of the Net Number of Shares on the Break
      Date. It is hereby acknowledged and agreed that the Company Options shall
      provide that in such event the amount of Underlying Shares shall be
      automatically increased, on a pro-rata basis according to the proportion that
      each Optionee’s Underlying Shares bears to the aggregate number of Underlying
      Shares at Closing, such that the Consideration Shares and the Underlying Shares
      shall represent 31% of the Net Number of Shares on the Break Date. The Sellers
      shall not be required to pay any consideration to the Company for the additional
      shares of Common Stock issued to the Sellers pursuant to this Section
      2(b).  Additional shares of Common Stock issued pursuant to this Section
      2(b) shall be issued to the Sellers on a pro-rata basis according to the
      proportion of the Consideration Shares issued to each Seller at the Closing.
      

    

    3. Closing.

    

    (a) Time
      of Closing.
      The
      closing shall take place at such time and place (the “Closing Date”) as the
      parties hereto may agree (the “Closing”) at any time after satisfaction or
      waiver of any other condition or action to be performed on or prior to Closing
      under the terms of this Agreement and delivery of all of the items specified
      in
      Section 4 below, provided,
      however,
      that
      the Closing shall not occur before the completion of the Company’s current
      report on Form 8-K regarding the transactions contemplated by this Agreement
      including, without limitation, the requisite financial statements, which the
      Company hereby undertakes to make its best efforts to complete within 7 calendar
      days of the execution of this Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.
       Closing;
      Deliveries.
      

    

    (a)
       At
      the
      Closing, the delivery of the following documents shall occur simultaneously,
      and
      no document shall be deemed to have been delivered until all required documents
      are delivered, unless waived: 

    

    (1)
       Each
      Seller shall deliver an executed representation letter agreement to the Company.
      The form of such representation letter shall be attached hereto at the Closing
      as Exhibit B. In addition, each of the Sellers shall deliver to the Company
      (A)
      stock certificates evidencing the Shares held by each of them, duly endorsed
      in
      blank or accompanied by share transfer deeds duly executed in blank, or other
      instruments of transfer in form and substance reasonably satisfactory to the
      Company, (B) documentary evidence, filed with the Israeli Registrar of
      Companies, establishing the due recordation in the share register of SDS of
      the
      issuance of the Shares to each Seller, and (C) such other documents as may
      be
      required under applicable law or reasonably requested by the Company to effect
      the transfer of the Shares to the Company.

     

      (2) SDS
      shall
      deliver to the Company (A) a legal opinion on behalf of SDS opining as to
      matters customary in a transaction of this nature, (B) all the books and records
      of SDS, and (C) such other documents as may be required under applicable law
      or
      reasonably requested by the Company to effect the transfer of the Shares to
      the
      Company.

     

    (3) The
      Company shall deliver to each Seller a certificate evidencing the number of
      Consideration Shares indicated next to such Seller’s name on Exhibit
      A
      annexed
      hereto.

     

    (4) Mr.
      Yosef
      Nahum Bernstein, the Company’s Secretary, shall deliver to the Company a fully
      executed copy of an escrow agreement, in form and substance satisfactory to
      the
      Company and the Sellers (the “Escrow Agreement”). The Sellers shall become a
      party to the Escrow Agreement. A copy of the Escrow Agreement shall be delivered
      by the Company to each of the Optionees at Closing.

    

    (5)
       The
      Company shall deliver a legal opinion to the Principal and the remaining Sellers
      from David Lubin & Associates PLLC on behalf of the Company opining as to
      matters customary in a transaction of this nature. 

    

    (6)
       SDS
      and
      the Principal shall have delivered to each other a duly executed employment
      agreement between SDS and the Principal, in form and substance satisfactory
      to
      SDS, the Company and the Principal. The form of such employment agreement shall
      be attached hereto at the Closing as Exhibit D (the “Shoval Employment
      Agreement”). The Shoval Employment Agreement shall provide for, inter alia, the
      grant of three (3) warrants (the “Shoval Warrants”) to purchase shares of Common
      Stock. The terms of each Shoval Warrant shall include that upon the achievement
      of a milestone (each Shoval Warrant to provide a different milestone), the
      amount of shares of Common Stock exercisable under such warrant shall equal
      3.33% of the total number of outstanding shares of Common Stock at the time
      the
      milestone is achieved at an exercise price of $0.15 per share and shall provide
      for cashless exercise. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (7)
       SDS
      and
      Eran Druckman shall have delivered to each other a duly executed employment
      agreement between SDS and Mr. Druckman, in form and substance satisfactory
      to
      SDS, the Company and Mr. Druckman. The form of such employment agreement shall
      be attached hereto at the Closing as Exhibit E (the “Druckman Employment
      Agreement”). The Druckman Employment Agreement shall provide for, inter alia,
      the grant of three (3) warrants (the “Druckman Warrants”) to purchase shares of
      Common Stock. The terms of each Druckman Warrant shall include that upon the
      achievement of a milestone (each Druckman Warrant to provide a different
      milestone), the amount of shares of Common Stock exercisable under such warrant
      shall equal 1.67% of the total number of outstanding shares of Common Stock
      at
      the time the milestone is achieved at an exercise price of $0.15 per share
      and
      shall provide for cashless exercise.

    

    (8)
       The
      Company, the Sellers and Mr. Druckman shall have delivered to each other a
      duly
      executed Registration Rights Agreement, in form and substance satisfactory
      to
      such persons to cover the registration for resale of the Consideration Shares,
      Escrowed Shares, the Underlying Shares and shares of Common Stock issuable
      upon
      exercise of the Shoval Warrants and the Druckman Warrants. The form of such
      Registration Rights Agreement shall be attached hereto at the Closing as Exhibit
      F. Such agreement shall provide for unlimited piggyback rights from the Closing
      Date and demand rights available from 18 months from the Closing Date, provided
      such demand rights shall be available only if the Company shall have cash and
      cash-equivalents in an amount equal to or exceeding $500,000.

    

    (9) The
      Israeli Office of the Chief Scientist shall have approved the transactions
      contemplated by this Agreement and the Company shall deliver to SDS an executed
      undertaking, addressed to the Israeli Office of the Chief Scientist,
      substantially in the form of Exhibit G hereto.

    

    (10) SDS
      shall
      deliver to the Company a waiver, executed by NG - The Northern Group LP and
      in
      form and substance satisfactory to the Company, with respect to any right or
      rights of NG - The Northern Group LP under the Amended and Restated Articles
      of
      Association of SDS (the “SDS Articles”) or otherwise associated with the Series
      A Preferred Shares of SDS held by NG - The Northern Group LP, including rights
      of first refusal, the exercise of which may interfere with the consummation
      of
      the transactions as contemplated by this Agreement. Prior to or upon the
      Closing, NG - The Northern Group LP shall have converted said Series A Preferred
      Shares of SDS into ordinary shares in SDS on a one-to-one basis. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (11)
      The
      Optionees shall have executed option agreements in respect of the Company
      Options in form and substance satisfactory to the Company and the Sellers.
      The
      terms of such option agreements shall include an exercise price equal to
      $0.0001, a ten-year exercise period, shall provide for cashless exercise and
      shall include an automatic increase in the Underlying Shares as contemplated
      by
      Section 2(b) above and Section 7.1 below. The form of such option agreements
      shall be attached hereto at the Closing as Exhibit H.

    

    (12) The
      Sellers and the Optionees shall have received pre-rulings from the Israeli
      Tax
      Authority, in form and substance satisfactory to them concerning the
      transactions contemplated by this Agreement.

    

    5. Representations
      and Warranties of SDS.
      As
      further inducement to the Company to enter into this Agreement and to consummate
      the transactions contemplated herein, the Principal hereby represents and
      warrants to the Company that to the best of his knowledge, as of the date of
      this Agreement and as of the Closing Date:

    

    5.1 Organization
      and Good Standing.
      SDS is
      duly organized and validly existing under the laws of the State of Israel,
      with
      full power and authority to own, lease, use and operate its properties and
      to
      carry on its business as and where now owned, leased, used, operated and
      conducted. SDS does not own, directly or indirectly, any capital stock of any
      corporation or any equity, profit sharing, participation or other interest
      in
      any corporation, partnership, limited liability company, joint venture or other
      entity.

    

    5.2  Capitalization.
      As of
      the Closing, the authorized capital of SDS will consist of (a) 20,000,000
      Ordinary Shares, NIS 0.01 par value per share, authorized, 1,170,295 of which
      shares are issued and outstanding, fully paid and non-assessable, (i) with
      each
      holder thereof being entitled to cast one vote for each share held on all
      matters properly submitted to the shareholders for their vote, and (ii) there
      being no pre-emptive or similar rights and no cumulative voting. Other than
      as
      set forth in Schedule 5.2, SDS has no shares reserved for issuance pursuant
      to a
      stock option plan or agreement or pursuant to securities exercisable for, or
      convertible into or exchangeable for shares of its capital stock. All issuances
      by SDS of shares of its capital stock in past transactions have been legally
      and
      validly effected. All past issuances of shares of SDS were conducted in full
      compliance with the requirements of Israeli law and the then effective Articles
      of Association of SDS. Other than as set forth on Schedule 5.2 to this
      Agreement, there are (i) no outstanding options, warrants, scrip, rights to
      subscribe for, puts, calls, rights of first refusal, agreements, understandings,
      claims or other commitments or rights of any character whatsoever relating
      to,
      or securities or rights convertible into or exchangeable for any shares of
      capital stock of SDS or arrangements by which SDS is or may become bound to
      issue additional shares of capital stock, (ii) no agreements or arrangements
      under which SDS is obligated to register for resale any of its or Sellers’
securities under the US Securities Act of 1933, as amended, and (iii) no
      anti-dilution or price adjustment provisions contained in any security issued
      by
      SDS (or in any agreement providing any such rights). 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.3 Post-Closing
      Ownership.
      Upon
      the consummation of the transactions contemplated herein, the Company will
      own
      100% of the issued and outstanding share capital of SDS on a fully-diluted
      basis. 

    

    5.4 Employees.
      Other
      than as set forth on Schedule 5.4 to this Agreement, SDS does not (i) have
      any
      employees, (ii) as at the Closing, will not owe any compensation of any kind,
      deferred or otherwise, to any person (other than liabilities with regard to
      current one-month salaries, current one month social and other benefits or
      current reimbursable expenses) including, without limitation, any agent,
      representative, consultant, accountant or attorney, (iii) have any written
      or
      oral employment agreement with any person, nor (iv) is it a party to or bound
      by
      any collective bargaining agreement, other than by operation of law. Other
      than
      as set forth on Schedule 5.4 to this Agreement, there are no loans or other
      monetary obligations payable to or owing by SDS to any stockholder, officer,
      director, agent, representative, consultant, accountant, attorney or otherwise,
      nor are there any loans or debts payable or owing by any such persons to SDS
      or
      any guarantees by SDS of any loan or obligation of any nature to which any
      such
      person is a party.

    

    5.5 Intellectual
      Property.

    

    (a) Schedule
      5.5(a) annexed hereto is a complete and accurate list of all the patents, patent
      applications, patent rights, inventions, know-how, trade secrets, trademarks,
      trademark applications, service marks, service names, trade names and copyrights
      (the “Intellectual Property”) registered by SDS, or with respect to which SDS
      has any rights, and it specifies, where applicable, the jurisdictions in which
      each such item of Intellectual Property has been issued or registered or in
      which an application for such issuance and registration has been filed. Prior
      to
      the date hereof, the Company has been provided with the respective registration
      or application numbers. Other than as set forth in Schedule 5.5(a), all of
      the
      Intellectual Property is valid and subsisting, all necessary registration,
      maintenance and renewal fees currently due in connection with such Intellectual
      Property have been made and all necessary documents, recordations and
      certificates in connection with such Intellectual Property have been filed
      with
      the relevant patent, copyright, trademark or other authorities in Israel and
      or
      in foreign jurisdictions, as the case may be, for the purposes of maintaining
      such Intellectual Property. Other than as set forth in Schedule 5.5(a), there
      is
      no claim or action by any person pertaining to, or proceeding pending or
      threatened, which challenges the right of SDS with respect to any of the
      Intellectual Property. Other than as set forth on Schedule 5.5(a), SDS owns
      and
      has good and exclusive title to, or has license (sufficient for the conduct
      of
      its business as currently conducted and as proposed to be conducted) to, each
      item of the Intellectual Property free and clear of any Encumbrances (excluding
      licenses and related restrictions). Other than as set forth in Schedule 5.5(a),
      none of the Intellectual Property is subject to any law, rule or regulation
      of
      the Israeli government, the United States government or any agency thereof,
      and
      there is no outstanding order of any governmental authority of competent
      jurisdiction in Israel or in the United States, restricting the use or licensing
      of any of the Intellectual Property. For the purposes of this Agreement, the
      term “Encumbrances” shall mean all liens, pledges, hypothecations, charges,
      adverse claims, options, preferential arrangements or restrictions of any kind,
      including, without limitation, any restriction of the use, voting, transfer,
      receipt of income or other exercise of any attributes of ownership.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) Other
      than as set forth in Schedule 5.5(b), all employees, consultants and
      subcontractors of SDS, and any other individual or entity that took any part
      in
      the development of the Intellectual Property, have executed valid and subsisting
      agreements duly assigning and transferring all of their rights in the
      Intellectual Property to SDS.

     

    (c) Other
      than as set forth in Schedule 5.5(c), SDS is not obligated under any law, rule,
      regulation or order of the Israeli government, the United States government
      or
      any agency thereof, or any stipulation or agreement of any kind, to pay any
      royalty or other payment to any third party with respect to the marketing,
      sale,
      distribution, manufacture, license or use of any of the Intellectual Property.
      

    

    (d) Other
      than as set forth in Schedule 5.5(d), SDS has not violated and is not currently
      violating or infringing on any Intellectual Property of any other person or
      entity, and SDS has not received any communication alleging any such violation
      or infringement.

    

    (e) Other
      than as set forth in Schedule 5.5(e), all providers of services to SDS, and
      all
      persons and entities engaged by SDS that would have access to SDS’s Intellectual
      Property, have executed valid and subsisting non-disclosure agreements with
      SDS
      with respect to SDS’s Intellectual Property. 

    

    (f) SDS
      has
      taken reasonable security measures to protect the confidentiality and value
      of
      all of its Intellectual Property.

    

    (g) Except
      as
      set forth in Schedule 5.5(g), the Principal is not obligated under any agreement
      (including licenses, covenants or other commitments) or subject to any judgment,
      decree or order of any court or governmental agency, that would interfere in
      a
      material manner with his ability to carry out his duties to SDS or to the
      Company as contemplated by the Shoval Employment Agreement.

    

    (h) Except
      as
      set forth in Schedule 5.5(h), SDS has not received any grant or other benefit
      from the United States government or the Israeli government, through the office
      of the Chief Scientist under the Encouragement of Research and Development
      in
      Industry Law, 5744-1984, or otherwise. 

    

    5.6 No
      Loan Agreements.
      SDS is
      not a party to any contract, arrangement or agreement, whether oral or in
      writing, including without limitation, loan agreements, credit lines, promissory
      notes, mortgages, pledges, guarantees, security agreements, factoring
      agreements, letters of credit, powers of attorney or other arrangements to
      loan
      or borrow money or extend credit.

    

    5.7 Taxes.
      SDS has
      made or filed all income and all other tax returns, reports and declarations
      required by any jurisdiction to which it is subject and has paid all taxes
      and
      other governmental assessments and charges that are material in amount, shown
      or
      determined to be due on such returns, reports and declarations. There are no
      unpaid taxes claimed to be due by the taxing authority of any jurisdiction,
      and
      SDS knows of no basis for any such claim. SDS has not executed a waiver with
      respect to the statute of limitations relating to the assessment or collection
      of any foreign, federal, state or local tax. None of SDS’s tax returns is
      presently being audited by any taxing authority. SDS expressly assumes and
      shall
      pay any taxes due by SDS up to the date of the Closing.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.8 Licenses.
      SDS is
      in possession of all franchises, grants, authorizations, licenses, permits,
      easements, variances, exemptions, consents, certificates, approvals and orders
      necessary to own, lease and operate its properties and to carry on its business
      as it is now being conducted (collectively, the “Permits”), and there is no
      action pending or threatened regarding suspension or cancellation of any of
      the
      Permits. SDS is not in conflict with, or in material default or violation of,
      any of the Permits. SDS has not received any notification with respect to
      possible conflicts, defaults or violations of applicable laws, except for
      notices relating to possible conflicts, defaults or violations that have not
      been resolved.

    

    5.9 Real
      Property.
      SDS
      does not own any real property.

    

    5.10 Information.
      All
      information relating to or concerning SDS that has been provided to the Company
      and all of the representations and warranties of the Principal set forth in
      this
      Agreement and otherwise in connection with the transactions contemplated hereby,
      are true and correct in all material respects and the Principal has not omitted
      to state any fact necessary in order to make the statements made herein or
      therein, in light of the circumstances under which they were made, not
      misleading. No event or circumstance has occurred or exists with respect to
      SDS
      or its business, properties, prospects, operations or financial conditions,
      which, under applicable law, rule or regulation, requires public disclosure
      or
      announcement by SDS but which has not been so publicly announced or disclosed.
      There is no fact known to the Principal that has specific application to the
      Shares and that materially adversely affects or, as far as can be reasonably
      foreseen, materially threatens the Shares that has not been set forth in this
      Agreement.

    

    6. Representations
      and Warranties of the Company.
      As an
      inducement to Sellers and the Principal to enter into this Agreement and to
      consummate the transactions contemplated herein, the Company hereby represents
      and warrants to each of the Sellers and to the Principal that as of the date
      of
      this Agreement and as of the Closing Date:

    

    6.1 Organization
      and Good Standing.
      The
      Company is duly organized, validly existing and in good standing under the
      applicable laws of the state of its incorporation and has full power and
      authority to own, lease, use and operate its properties and to carry on its
      business as and where now owned, leased, used, operated and conducted.

    

    6.2 Authority.
      The
      execution and delivery of this Agreement and the documents ancillary hereto,
      and
      the transactions contemplated hereby and thereby, have been duly approved by
      the
      board of directors of the Company and does not require the approval of the
      shareholders of the Company. This Agreement and the documents ancillary hereto
      constitute the legal, valid and binding obligations of the Company, enforceable
      against the Company in accordance with the terms hereof and
      thereof.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.3
       Consents. All
      material consents, approvals, authorizations and orders, required for the
      consummation by the Company of any of the transactions on its part contemplated
      under this Agreement and the documents ancillary hereto, have been obtained,
      and
      all reports required by the Company with any governmental authority prior to
      the
      execution of this Agreement have been made.

    

    6.4 No
      Conflict.
      None of
      the execution, delivery, or performance of this Agreement and the documents
      ancillary hereto, and the consummation of the transactions contemplated hereby
      and thereby, conflicts or will conflict with, or (with or without notice or
      lapse of time, or both) result in a termination, breach or violation of (i)
      to
      the best of the Company’s knowledge, any instrument, contract or agreement to
      which the Company is a party or by which it or its assets is bound; (ii) the
      certificate of incorporation and by-laws of the Company, or (iii) to the best
      of
      the Company’s knowledge, any federal, state, local or foreign law, ordinance,
      judgment, decree, order, statute, or regulation, or that of any other
      governmental body or authority, applicable to the Company.

    

    6.5 Company
      Shares.
      The
      Consideration Shares are duly authorized and will be duly and validly issued,
      fully paid and nonassessable, free and clear of all Encumbrances and in full
      compliance with all U.S. federal and state securities laws. The Underlying
      Shares, the shares of Common Stock issuable upon exercise of the Shoval Warrants
      and the Druckman Warrants and the additional shares that may be issued pursuant
      to Section 2(b) hereof and additional shares that may be issuable under the
      Company Options, when issued, will be duly authorized and will be duly and
      validly issued, fully paid and nonassessable, free and clear of all Encumbrances
      and in full compliance with all U.S. federal and state securities laws. The
      Company has reserved from its duly authorized capital stock the maximum number
      of shares of Common Stock issuable pursuant to this Agreement and all documents
      ancillary hereto and will from time to time reserve any additional number of
      shares of Common Stock that may be issuable pursuant to this Agreement and
      all
      documents ancillary hereto. All of the outstanding shares of capital stock
      of
      the Company are validly issued, fully paid and nonassessable, and none of such
      outstanding shares was issued in violation of any preemptive rights, rights
      of
      first refusal or similar rights to subscribe for or purchase securities and
      were
      issued in full compliance with all U.S. federal and state securities laws.
      

    

    6.6 Company
      Reports.
      The
      Company has timely filed all reports, schedules, forms, statements and other
      documents required to be filed by the Company with the Securities and Exchange
      Commission pursuant to the requirements of the Exchange Act. To the best
      knowledge of the Company, as of their respective dates, all reports, schedules,
      forms, statements and other documents filed by the Company with the Securities
      and Exchange Commission (the “SEC Documents”) complied in all material respects
      with the requirements of the Exchange Act and applicable rules and regulations
      as in effect at the time of filing, and none of the SEC Documents, at the time
      they were filed, contained any untrue statement of a material fact or omitted
      to
      state a material fact required to be stated therein or necessary in order to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.7 Litigation.
      There
      is no civil, criminal or administrative suit, claim, hearing, inquiry, action,
      proceeding or investigation pending, to which the Company is a party, or to
      the
      best of the Company’s knowledge, threatened in writing to the Company, against
      the Company, except as would not, individually or in the aggregate, reasonably
      be expected to have a material adverse effect on the Company and its business.
      The Company is not subject to any outstanding order, writ, injunction or decree,
      except as would not, individually or in the aggregate, reasonably be expected
      to
      have a material adverse effect on the Company or its business. There has not
      been, and to the best knowledge of the Company, there is no pending or
      contemplated, civil, criminal or administrative suit, claim or investigation,
      including by the Securities and Exchange Commission, in which the Company or
      any
      current or former officer or director of the Company, in his or her capacity
      as
      such, is a party or the subject thereof.

    

    6.8 Major
      Shareholders.
      To the
      best of the Company’s knowledge, other than as set forth on Schedule 6.8 to this
      Agreement, no shareholder or group of shareholders of the Company has beneficial
      ownership of more than 4.99% of any class of the Company’s equity securities.
For
      the
      purposes of this Section 6.8, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Exchange Act, and Rule 13d-3 thereunder.
      Schedule 6.8 sets forth the amount of issued shares of Common Stock. Other
      than
      as set forth in Schedule 6.8, there are no outstanding options, warrants or
      other securities convertible or exercisable into shares of Common
      Stock.

    

    6.9
       Listing
      and Maintenance Requirements.
      The
      shares of Common Stock are registered pursuant to Section 12(g) of the Exchange
      Act, and the Company has taken no action designed to, or which to its knowledge
      is likely to have the effect of, terminating the registration of the Common
      Stock under the Exchange Act nor has the Company received any notification
      that
      the Commission is contemplating terminating such registration. The Company
      has
      not, in the 12 months preceding the date hereof, received notice from the
      OTC Bulletin Board to the effect that the shares of Common Stock will not
      continue to be listed for trade on the OTC Bulletin Board. The Company is,
      and
      has no reason to believe that the shares of Common Stock will not in the
      foreseeable future continue to be listed for trade on the OTC Bulletin
      Board.

     

    7. Covenants.

    

    7.1 Escrowed
      Shares. 
      On the
      Closing Date, Mr. Yosef Nachum Bernshten, the Company’s Secretary, will forfeit
      and relinquish 7 million shares of Common Stock that are registered in his
      name,
      by depositing such shares, which shall be free and clear of any Encumbrances,
      in
      an escrow account to be managed by David Lubin & Associates, PLLC, pursuant
      to the Escrow Agreement. If the Investment Target is achieved on or before
      the
      Investment Target Cut-Off Date, the Escrowed Shares shall be cancelled without
      payment of any consideration. Alternatively, if the Investment Target is not
      achieved on or before the Investment Target Cut-Off Date, then, as described
      in
      Schedule 7.1 hereto (a) a portion of such Escrowed Shares will be transferred
      to
      the Sellers, on a pro-rata basis according to the proportion of the
      Consideration Shares issued to each Seller on the Closing Date, without payment
      of any consideration by Sellers, (b) the remaining Escrowed Shares shall be
      cancelled by the Company, and (c) the number of Underlying Shares issuable
      upon
      exercise of the Company Options shall be automatically increased by the amount
      of such cancelled shares on a pro-rata basis according to the proportion of
      the
      Underlying Shares of each Optionee’s Company Option at the Closing. The term
“Investment Target” means the actual receipt by the Company of an aggregate
      amount of at least $1.5 million through the sale of non-debt equity securities
      of the Company during the period commencing October 2, 2007 and ending on
      December 1, 2008. It is hereby acknowledged that as of the date of this
      Agreement the Company has received $1,060,700.50 towards the Investment Target
      and the use of such monies by the Company is not restricted in any
      manner.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    7.2 Directors.
      For so
      long as the Sellers shall collectively hold at least 5% of the outstanding
      Common Stock, Shabtai Shoval shall have the right to appoint one member of
      the
      Company’s board of directors.

    

    7.3 Officers.
      On or
      prior to the Closing Date, the resignations of Yosef Nachum Bernstein and
      Nachman Shlomo Cohen as officers of the Company shall become effective and,
      provided the Closing has occurred, Shabtai Shoval shall be appointed to serve
      as
      the chief executive officer of the Company.

    

    7.4 Ownership
      of Shares.
      The
      Company acknowledges that the transactions contemplated under this Agreement
      by
      the Sellers and the Optionees are being performed under Section 103 of the
      Israeli Income Tax Ordinance [New
      Version], 5721-1961 (the “Ordinance”). For
      the
      purpose of complying with Section 103 of the Ordinance,
      the
      Company hereby agrees and undertakes, to the best of its ability and knowledge,
      from the Closing, not to take any action which might be anticipated to result
      in
      a violation of the terms and conditions of Section 103 of the Ordinance, which
      terms and conditions include, inter alia, subject to certain exceptions, the
      Company retaining all of the ownership rights acquired by the Company in SDS
      pursuant to this Agreement, SDS retaining the ownership rights in its assets
      and
      restrictions as to the issuance of additional shares of Common Stock, during
      the
      period commencing on the Closing Date and ending two (2) years from the end
      of
      the calendar year in which the Closing occurs.

    

    8.
       Indemnification;
      Survival.
      

    

    8.1
       Indemnification.
      The
      Principal shall indemnify and hold harmless the Company its agents,
      beneficiaries, affiliates, representatives and their respective successors
      and
      assigns (collectively, the “Company Indemnified Persons”) from and against any
      and all damages, losses, liabilities, taxes, costs and expenses (including,
      without limitation, attorneys’ fees and costs) (collectively, “Losses”)
      resulting directly or indirectly from (a) any inaccuracy, misrepresentation,
      breach of warranty or non-fulfillment of any of the representations and
      warranties made by the Principal and contained in Article 5 of this Agreement
      and in the representation letter agreement referred to in Section 4(a)(1),
      or
      any actions, omissions or statements of fact inconsistent in any material
      respect with any such representation or warranty, (b) any failure on the part
      of
      SDS or the Principal to perform or comply with any agreement, covenant or
      obligation in this Agreement; provided,
      however,
      that
      (i) the indemnification provided by the Principal pursuant to this Section
      8.1
      shall terminate on the second anniversary of this Agreement, and it shall have
      no further force or effect thereafter, notwithstanding anything to the contrary
      contained in any provision of this Agreement or applicable law; and (ii) the
      indemnification provided by the Principal under this Section 8.1 shall be
      limited, in that the Principal’s total liability to the Company and to any other
      Company Indemnified Person, in the aggregate, for all claims made under this
      Section 8.1, by the Company and any other Company Indemnified Person, at any
      time or from time to time, shall not exceed $10,000 and shall be satisfied
      and
      recoverable only through surrender by the Principal to the Company and
      forfeiture of shares of Common Stock with a fair market value equal to the
      relevant Losses up to a maximum aggregate amount of $10,000. If a claim for
      indemnification is made by any Company Indemnified Person other than the
      Company, the Company shall make a cash payment to the Company Indemnified Person
      in an amount equal to the fair market value of the shares of Common Stock
      surrendered by the Principal. For the purposes of this Section 8.1, fair market
      value shall mean the average of the closing bid and ask prices for a share
      of
      Common Stock as quoted by the OTC Bulletin Board (or other US market or exchange
      on which the Common Stock is listed or quoted for trading if not listed or
      quoted for trading on the OTC Bulletin Board) on the five (5) trading days
      immediately following the date on which the Company Indemnified Person notifies
      the Principal, in writing as required pursuant to Section 10.2 below, that
      he
      has a claim for indemnification under this Section 8.1. If the price of a share
      of Common Stock is not so reported, the fair market value of a share of Common
      Stock shall be determined by agreement in good faith between the Company and
      the
      Principal.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Company shall indemnify the Principal, the remaining Sellers and SDS, their
      agents, beneficiaries, affiliates, representatives and their respective
      successors and assigns, and hold each of them harmless from and against any
      and
      all damages, losses, liabilities, taxes, costs and expenses (including, without
      limitation, attorneys’ fees and costs) resulting directly or indirectly from (A)
      any inaccuracy, misrepresentation, breach of warranty or non-fulfillment of
      any
      of the representations and warranties of the Company in this Agreement, or
      any
      actions, omissions or statements of fact inconsistent in any material respect
      with any such representation or warranty, (B) any failure by the Company to
      perform or comply with any agreement, covenant or obligation in this Agreement;
      provided,
      however,
      that
      (1) the indemnification provided by the Company pursuant to this Section 8.1
      shall terminate on the second anniversary of this Agreement, and it shall have
      no further force or effect thereafter, notwithstanding anything to the contrary
      contained in any provision of this Agreement or applicable law; and (2) the
      indemnification provided by the Company under this Section 8.1 shall be limited,
      in that the Company’s total liability to the Principal, the remaining Sellers
      and SDS, their agents, beneficiaries, affiliates, representatives and their
      respective successors and assigns, in the aggregate, for all claims made under
      this Section 8.1 at any time or from time to time, shall not exceed an aggregate
      maximum amount of $10,000. Notwithstanding the aforementioned, the limitations
      set forth in the previous sentence shall not apply to Sections 6.5, 6.9 and
      7.4.

    

    The
      provisions of this Section 8.1 shall be the sole and exclusive remedy for
      breaches of the matters set forth in said Section.

    

    8.2
       Survival.
      Unless
      otherwise stated in this Agreement, all covenants and agreements of the parties
      contained herein or in any other certificate or document delivered pursuant
      hereto shall survive the date hereof until the later of the expiration of the
      applicable statute of limitations or the second anniversary of the date
      hereof.

    

    9.  Termination.
      This
      Agreement may be terminated, and the transactions contemplated hereby may be
      abandoned at any time prior to the Closing, by the Company or by SDS, if
      (a) the Closing shall not have been consummated by October 31, 2008, or
      (b) any injunction or order of any governmental authority permanently
      restraining, enjoining or otherwise prohibiting consummation of the transaction
      contemplated by this Agreement shall have become final and non-appealable;
      provided,
      however,
      that
      the right to terminate this Agreement pursuant to this Section 9 shall not
      be available to any party that has breached its obligations under this Agreement
      in any manner that shall have proximately contributed to the failure to
      consummate the transactions contemplated by this Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.
       Miscellaneous.
      

    

    10.1 Further
      Assurances.
      From
      time to time, whether at or following the Closing, each party shall make
      reasonable commercial efforts to take, or cause to be taken, all actions, and
      to
      do, or cause to be done, all things reasonably necessary, proper or advisable,
      including as required by applicable laws, to consummate and make effective
      as
      promptly as practicable the transactions contemplated by this
      Agreement.

    

    10.2
       Notices.
      All
      notices or other communications required or permitted hereunder shall be in
      writing and shall be deemed duly given (a) if by personal delivery, when so
      delivered, (b) if mailed, three (3) business days after having been sent by
      registered or certified mail, return receipt requested, postage prepaid and
      addressed to the intended recipient as set forth below (or ten (10) business
      days if the address to which such notice is addressed is not in the same country
      in which such notice is mailed), or (c) if sent through an overnight delivery
      service in circumstances to which such service guarantees next day delivery,
      the
      second day following being so sent to the addresses of the parties as indicated
      on Exhibit
      A
      annexed
      hereto. Any party may change the address to which notices and other
      communications hereunder are to be delivered by giving the other parties notice
      in the manner herein set forth.

    

    10.3
       Choice
      of Law.
      This
      Agreement shall be governed, construed and enforced in accordance with the
      laws
      of the State of New York, without giving effect to principles of conflicts
      of
      law.

    

    10.4
       Jurisdiction.
      The
      parties hereby irrevocably consent to the in personam jurisdiction and venue
      of
      the courts of the State of New York and of any federal court located in such
      State in connection with any action or proceeding arising out of or relating
      to
      this Agreement, any document or instrument delivered pursuant to, in connection
      with or simultaneously with this Agreement, or a breach of this Agreement or
      any
      such document or instrument. EACH
      PARTY HERETO WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING
      OUT
      OF THIS AGREEMENT OR ANY BREACH OR ALLEGED BREACH HEREOF.

      

    10.5 Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding of the parties
      in
      respect of the transactions contemplated hereby and supersedes all prior and
      contemporaneous agreements, arrangements and understandings of the parties
      relating to the subject matter hereof. No representation, promise, inducement,
      waiver of rights, agreement or statement of intention has been made by any
      of
      the parties which is not expressly embodied in this Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.6 Assignment.
      Each
      party's rights and obligations under this Agreement shall not be assigned or
      delegated, by operation of law or otherwise, without the other parties’ prior
      written consent, and any such assignment or attempted assignment without the
      other parties’ prior written consent shall be void, of no force or effect, and
      shall constitute a material default by such party. Notwithstanding the
      aforesaid, the Principal shall have the right to assign his rights under this
      Agreement to an entity in which the Principal, alone or together with any of
      his
      relatives of the first degree, own 100% of the voting rights.

    

    10.7
       Amendments.
      This
      Agreement may be amended, modified, superseded or cancelled, and any of the
      terms, covenants, representations, warranties or conditions hereof may be
      waived, only by a written instrument executed by the parties
      hereto.

    

    10.8 Waivers.
      The
      failure of any party at any time or times to require performance of any
      provision hereof shall in no manner affect the right at a later time to enforce
      the same. No waiver by any party of any condition, or the breach of any term,
      covenant, representation or warranty contained in this Agreement, whether by
      conduct or otherwise, in any one or more instances shall be deemed to be or
      construed as a further or continuing waiver of any such condition or breach
      or a
      waiver of any other term, covenant, representation or warranty of this
      Agreement.

    

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

    

    10.10 Severability. 
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction or other authority to be invalid, void or unenforceable,
      the remainder of the terms, provisions, covenants and restrictions of this
      Agreement shall remain in full force and effect and shall in no way be affected,
      impaired or invalidated so long as the economic or legal substance of the
      transactions contemplated hereby is not affected in any manner materially
      adverse to any party. Upon such determination, the parties shall negotiate
      in
      good faith to modify this Agreement so as to give effect the original intent
      of
      the parties as closely as possible in an acceptable manner in order that the
      transactions contemplated hereby are consummated as originally contemplated
      to
      the fullest extent possible. 

    

    10.11
       Interpretation.
      The
      parties agree that this Agreement shall be deemed to have been jointly and
      equally drafted by them, and that the provisions of this Agreement therefore
      shall not be construed against a party or parties on the ground that such party
      or parties drafted or was more responsible for the drafting of any such
      provision(s). The parties further agree that they have each carefully read
      the
      terms and conditions of this Agreement, that they know and understand the
      contents and effect of this Agreement and that the legal effect of this
      Agreement has been fully explained to their satisfaction by counsel of their
      own
      choosing. The various paragraph and/or section headings in this Agreement are
      for reference and convenience only and shall not be considered in the
      interpretation hereof for any purpose and in no way alter, modify, amend, limit,
      or restrict any contractual obligations of the parties.

    

    10.12 Pronouns.
      The use
      herein of the masculine pronouns "him" or "his" or similar terms shall be deemed
      to include the feminine and neuter genders as well and the use herein of the
      singular pronoun shall be deemed to include the plural as well and vice versa.
      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.13 Expenses. Each
      party shall pay the fees and expenses of its advisers, counsel, accountants
      and
      other experts, if any, and all other expenses incurred by such party incident
      to
      the negotiation, preparation, execution, delivery and performance of this
      Agreement, provided that the Company shall participate and pay SDS and the
      Principal up to the following amounts upon delivery of itemized invoices with
      respect thereto (or shall reimburse them on account thereof) (a) up to $20,000
      in accountant fees incurred by SDS and/or the Principal, including for obtaining
      the pre-rulings referred to in Section 4, and (b) up to $15,000 in legal fees
      incurred by SDS and/or the Principal. The Company shall pay all transfer agent
      fees, stamp taxes and other taxes and duties levied in connection with the
      delivery of any securities of the Company as contemplated by this
      Agreement.

     

    IN
      WITNESS WHEREOF, the parties have duly executed this Stock Purchase Agreement
      as
      of the date first above written.

     

     

    
      	
              PCMT
                CORPORATION

            	
              SUSPECT
                DETECTION SYSTEMS LTD.

            
	 	 
	 	 
	
              By:
                /s/ Asher
                Zwebner            
                

            	
              By:
                /s/ Shabtai
                Shoval           
                

            
	
              Name:
                Asher Zwebner

            	
              Name:
                Shabtai Shoval

            
	
              Title:
                CFO

            	
              Title:
                CEO

            

    

    

     

    

    PRINCIPAL

    

    

    /s/
      Shabtai Shoval 

    Name:
      Shabtai Shoval

    

    

    

    SELLER

    

     

    By:
      /s/
      Ishayahu Horowitz 

    Name:
      Ishayahu (Sigi) 
      Horowitz

    

    SELLER

    NG
      - The
      Northern Group LP

     

    By:
      /s/
      Illegibile 

    Name:
      Illegible

    Title:
      CFO

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

    

    
      	
              Name
                of Seller

               

            	
              Address

               

            	
              SDS
                Shares Sold

               

            	
              Consideration
                Shares Acquired at Closing

               

            
	
              Shabtai
                Shoval

            	
              c/o
                Suspect Detection 

              Systems
                Ltd.

              121
                Habsor

              Shoham,
                Israel

              Fax:
                (972) (0) 3-973-1841

            	
              750,000

            	
              13,950,371

               

            
	
              Ishayahu
                Sigi 

              Horowitz

            	
              11
                Ben Gurion St.

              Ramat
                Gan, Israel

              (972)
                (0) 3-616-1515

            	
              250,000

            	
              4,650,122

               

            
	
              NG
                - The Northern 

              Group
                LP

            	
              17
                Hadar St.

              Caesarea,
                Israel

              Fax:
                (972) (0) 4-626-0816

            	
              170,295*

               

            	
              3,167,570

               

            

    

    

    *
      Represents Preferred A Shares which are anticipated to be converted by NG -
      The
      Northern Group LP into ordinary shares of SDS upon the Closing.

    

      
        	
                The
                  address for notices to the Company is:

              	
                4
                  Nafcha Street

              
	 	
                Jerusalem,
                  Israel

              
	 	
                95508

              
	 	
                Fax:
                  516-887-8253

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      G

     

    Form
      of OCS Undertaking

     

    
      	To:	
              The
                Research Committee

            

    

    The
      Office of the Chief Scientist

    Jerusalem

    

    Relating
      to projects that have been financed by or are currently being financed by the
      Office of the Chief Scientist of the Ministry of Industry, Trade and Labor
      (the
      "OCS")
      (Project no. 34581 and File no. 36325) and to projects of the Company (as this
      term is defined below) that may be financed by the OCS in the future (the
      "Projects").
      

    

     

    Undertaking

     

    

    We,
      the
      undersigned, PCMT Corporation, a company incorporated, organized and existing
      under the laws of the State of Delaware, USA and whose registered office is
      at 4
      Nafcha Street, Jerusalem, Israel, 95508, having, by an agreement dated April
      30,
      2008, purchased 100% of the issued and outstanding share capital of Suspect
      Detection Systems (S.D.S.) Ltd. (the "Company");

    

    Recognizing
      that the Company's research and development Projects are currently, have been
      or
      will be financially supported by the Government of the State of Israel, through
      the OCS under and subject to the provisions of The Encouragement of Research
      and
      Development in Industry Law 5744-1984 (the "R&D
      Law")
      and
      the regulations, rules and procedures promulgated there under;

    

    Recognizing
      that the R&D Law places strict constraints on the transfer of know-how
      and/or production rights, making all such transfers subject to the absolute
      discretion of the OCS' research committee (the "Research
      Committee"),
      acting in accordance with the aims of the R&D Law and requiring that any
      such transfer receive the prior written approval of the Research
      Committee;

    

    Hereby
      declare and undertake:

    

    
      	1.	
              To
                observe strictly all the requirements of the R&D Law and the
                regulations, rules and procedures promulgated there under, as applied
                to
                the Company and as directed by the Research Committee, in particular
                those
                requirements stipulated under Sections 19, 19A and 19B of the R&D Law
                relating to the prohibitions on the transfer of know-how and/or production
                rights.

            

    

    

    
      	
              2.

            	
              As
                a shareholder of the Company, to make all reasonable efforts that
                the
                Company shall observe strictly all the requirements of the R&D Law and
                the regulations, rules
                and procedures promulgated there under,
                as applied to the Company and as directed by the Research Committee,
                in
                particular those requirements stipulated under Sections 19, 19A and
                19B of
                the R&D Law relating to the prohibitions on the transfer of know-how
                and/or production rights.

            

    

     

    
      
        	 	 	 
	
                Date

              	 	
                Name
                  (block letters) and signature of Authorized Company Representative
                  and
                  Company Seal

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