Document:

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of January 1,
2000, by and between Global Payment Technologies, Inc., a Delaware corporation,
with executive offices at 20 East Sunrise Highway, Valley Stream, New York 11581
(the "Company"), and Thomas Oliveri, residing at 19 Arcadia Drive, Dix Hills, NY
11746, (the "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Company desires to formalize the employment of the Executive
as a senior executive officer of the Company; and

     WHEREAS, the Company and Executive desire to enter into an agreement
relating to such employment;

     NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

     1.   EMPLOYMENT

     1.1 As of the commencement of the Employment Term (as hereinafter defined),
the Company hereby employs Executive in a senior executive capacity (it being
contemplated that he shall be elected and serve as the Vice President of
Operations upon the terms and conditions herein contained), with responsibility
for the performance of such duties as may from time to time be assigned to him
by the Board of Directors of the Company (the "Board of Directors"), its Chief
Operating Officer or its Chief Executive Officer. Executive hereby accepts
employment.

     1.2 The term of employment under this Agreement shall commence on the
effective date of this Agreement, and, subject to the terms hereof, shall
terminate on December 31, 2001. It is the Company's and the Executive's
intention to commence re-negotiation ninety (90) days prior to the end of this
Agreement. For purposes hereof, the term "year" shall mean January 1 through
December 31.

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     1.3 Throughout the Employment Term, Executive shall devote his best efforts
and all of his business time, attention and skills to the business and affairs
of the Company.

     2.   SALARY

     During the Employment Term, Executive shall be entitled to receive a base
salary at the rate of $135,000 per year, payable in accordance with the
Company's regular payroll practice for senior executives of the Company;
provided that such base salary shall be reviewed by the Board of Directors at
the same time of the year as the other senior executives, which is not less than
annually. In addition, such salary may be increased, but not decreased.

     3.   ANNUAL BONUSES

     For each year during the term of this Agreement, commencing with the first
year, Executive shall be entitled to receive a bonus in an amount to be
determined by the Board of Directors in its sole discretion.

     4.   INCENTIVE STOCK OPTION PLAN

     4.1 The Executive shall be entitled to participate in the Company's Stock
Option ("ISO") plan in a manner equal to that of other senior executives.

     4.2 The ISO shall be subject to such other terms and conditions as are set
forth in the grant.

     5.   TERMINATION UNDER CERTAIN CONDITIONS

     Subject to section 7(d), in the event that Executive's employment is
terminated by the Company (other than for "Cause" as hereinafter defined) or
Executive terminates his employment for "Good Reason" (as hereinafter defined)
prior to the end of the Employment Term, Executive shall be entitled to receive
in lieu of any and all other payments, a severance payment in an aggregate
amount equal to (1) Executive's yearly base salary in effect on the date of his
termination of employment hereunder multiplied

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by 75% plus (2) an amount equal to the bonus projected by the Board of Directors
for the fiscal year in which termination occurred (subject to the terms and
conditions of paragraph 3), and, in the case of (2), pro rated by a fraction,
the numerator of which shall be the actual number of days elapsed in the current
fiscal year and denominator of which shall be 365 (the "Severance Payment"). In
the event that Executive's termination were to occur after the first annual
anniversary of this Agreement, then the amount calculated in (1) above shall be
equal to Executive's yearly base salary in effect on the date of his termination
of employment hereunder multiplied by 100%. The Severance Payment shall be
payable in four equal monthly installments, the first installment to be due and
payable on the first day of the month immediately following such termination. In
addition to the Severance Payment, Executive shall be entitled to receive all
benefits set forth in section 6.1 for the six months following such termination,
on terms and conditions no less favorable than those in effect immediately prior
to the Executive's termination.

     6.   CERTAIN EMPLOYEE BENEFITS

     6.1 During the Employment Term, Executive shall be entitled to participate,
to the extent he is eligible under the terms and conditions thereof, in any
benefit plans which the Company may from time to time provide to its senior
executives during the Employment Term. Unless otherwise specifically set forth
herein, the Company shall be under no obligation to institute or thereafter
continue the existence of any such benefit plan.

     6.2 The Company currently has directors and officers liability insurance.
The Company covenants that Executive shall be covered under such policy through
the Employment Term, and thereafter with respect to matters occurring during the
Employment Term.

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     7.   CHANGE OF CONTROL

     (a) For the purpose of this Agreement, a "Change of Control" shall mean:

          (i) The acquisition by any individual, entity or group (within the
     meaning of Section 13(d) (3) or 14(d) (2) of the Securities Exchange Act of
     1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
     (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
     50% or more (on a fully diluted basis) of either (i) the then outstanding
     shares of common stock of the Company, taking into account as outstanding
     for this purpose such common stock issuable upon the exercise of options or
     warrants, the conversion of convertible stock or debt, and the exercise of
     any similar right to acquire such common stock (the "Outstanding Company
     Common Stock") or (ii) the combined voting power of the then outstanding
     voting securities of the Company entitled to vote generally in the election
     of directors (the "Outstanding Company Voting Securities"); provided,
     however, that for purposes of this subsection (a), the following
     acquisitions shall not constitute a Change of Control: (W) any acquisition
     by the Company or any "affiliate" of the Company, within the meaning of 17
     C.F.R. ss. 230.405 (an "Affiliate"), (X) any acquisition by any employee
     benefit plan (or related trust) sponsored or maintained by the Company or
     any Affiliate, (Y) any acquisition by any corporation pursuant to a
     transaction which complies with clauses (X), (Y) and (Z) of subsection
     (iii) of this Section 7(a), and (Z) any acquisition by any entity in which
     the Executive has a direct or indirect equity interest; or

          (ii) Individuals who, as of the effective date hereof, constitute the
     Board of Directors (the "Incumbent Board") cease for any reason to
     constitute at least a majority of the Board of Directors; provided,
     however, that any individual becoming a director subsequent to such
     effective date whose election, or nomination for election by the Company's
     shareholders, was approved by a vote of at least a majority of the
     directors then comprising the Incumbent Board shall be considered as though
     such individual were a member of the Incumbent Board, but excluding, for
     this purpose, any such individual whose initial assumption of office occurs
     as a result of an actual or threatened election contest with respect to the
     election or removal of directors or other actual or

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     threatened solicitation of proxies or consents by or on behalf of a Person
     other than the Board of Directors; or

          (iii) Consummation of a reorganization, merger or consolidation or
     sale or other disposition of all or substantially all of the assets of the
     Company (a "Business Combination"), in each case, unless, following such
     Business Combination, (X) all or substantially all of the individuals and
     entities who were the beneficial owners, respectively, of the Outstanding
     Company Common Stock and Outstanding Company Voting Securities immediately
     prior to such Business Combination beneficially own, directly or
     indirectly, more than 60% of, respectively, the then outstanding shares of
     common stock and the combined voting power of the then outstanding voting
     securities entitled to vote generally in the election of directors, as the
     case may be, of the corporation resulting from such Business Combination
     (including, without limitation, a corporation which as a result of such
     transaction owns the Company or all or substantially all of the Company's
     assets either directly or through one or more subsidiaries) in
     substantially the same proportions as their ownership, immediately prior to
     such Business Combination of the Outstanding Company Common Stock and
     Outstanding Company Voting Securities, as the case may be, and (Y) no
     Person (excluding (I) any employee, benefit plan (or related trust)
     sponsored or maintained by the Company or any Affiliate of the Company, or
     such corporation resulting from such Business Combination or any Affiliate
     of such corporation, or (II) any entity in which the Executive has an
     equity interest, or any Affiliate of such entity) beneficially owns,
     directly or indirectly, 20% or more (on a fully diluted basis) of,
     respectively, the then outstanding shares of common stock of the
     corporation resulting from such Business Combination, taking into account
     as outstanding for this purpose such common stock issuable upon the
     exercise of options or warrants, the conversion of convertible stock or
     debt, and the exercise of any similar right to acquire such common stock,
     or the combined voting power of the then outstanding voting securities of
     such corporation except to the extent that such ownership existed prior to
     the Business Combination and (Z) at least a majority of the members of the
     board of directors

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<PAGE>

     of the corporation resulting from such Business Combination were members of
     the Incumbent Board at the time of the execution of the initial agreement,
     or of the action of the Board of Directors, providing for such Business
     Combination; or

          (iv) Approval by the shareholders of the Company of a complete
     liquidation or dissolution of the Company.

     (b) The Company or its successor or purchaser shall notify Executive in
writing, no later than 10 days prior to a Change in Control, whether it desires
Executive to remain employed for a maximum of six months following the Change in
Control (the "Transition Period"). If Executive is notified that it is not
desired that he remain employed following the Change in Control, or if no such
notice is given or the notice references a Transition Period of more than six
months, Executive shall have the right to voluntarily terminate his employment
for the 60-day period following the Change in Control and, subject to Section
7(d) below, such termination shall be deemed to have occurred for Good Reason
for purposes of this Agreement.

     (c) If Executive is properly notified that the Company or its successor or
purchaser desires Executive to remain employed for a Transition Period, and if
Executive remains employed for the Transition Period, then Executive shall have
the right to voluntarily terminate his employment for the 60-day period
following the end of the Transition Period and, subject to Section 7(d) below,
such termination shall be deemed to have occurred for Good Reason for purposes
of this Agreement.

     (d) If, following a Change in Control, Executive's employment is terminated
by the Company other than for Cause, or Executive terminates his employment for
Good Reason (including for this purpose under circumstances described in Section
7(b) and (c)), (i) the Severance Payment due to Executive pursuant to Section 5
shall be increased by Executive's current base salary multiplied by 25% and (ii)
such payment shall be made to Executive in a single lump sum no later than five
days following his termination.

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     8.   TERMINATION FOR GOOD REASON

     Executive may terminate his employment hereunder for Good Reason at any
time during the Employment Term, in which event Executive shall resign from all
of his positions with the Company. For purposes of this Agreement, "Good Reason"
shall mean the Executive's good faith determination that any of the following
has occurred (without Executive's express prior written consent):

          (i) The assignment to executive by the Company of duties inconsistent
     with those of a vice president or those of such other equivalent or more
     senior position then held by Executive, if any (including status, titles,
     offices and lines of reporting), except in connection with the termination
     of Executive's employment for Cause (as described in paragraph 9),
     disability (as defined in section 9.2(c) below), or as a result of
     Executive's death or termination by Executive other than for Good Reason;

          (ii) A reduction by the Company in Executive's base salary;

          (iii) The taking of any action by the Company which would deprive
     Executive of any material fringe benefit enjoyed by Executive at any time
     during the Emp1oyment Term as set forth in paragraph 6; or

          (iv) Any material breach by the Company of any provision of this
     Agreement.

     9.   DISCHARGE FOR CAUSE

     9.1 The Company shall have the right to terminate the employment of
Executive during the Employment Term. If the Company terminates the employment
of Executive other than for Cause, the provisions of paragraph 5 hereof shall
apply. If the Company terminates the employment of Executive for Cause, its
obligation under this Agreement to make any further payments to Executive shall
thereupon cease and terminate except for any obligations accrued but which
remain unpaid.

     9.2 As used herein, the term "cause" shall be limited to (a) action by
Executive involving willful malfeasance or gross negligence having an adverse
effect on the Company, or (b) failure to act by Executive involving material
malfeasance or gross negligence having an adverse effect on the Company provided
that any action or failure to act by Executive shall not constitute "Cause" if,
in good faith, Executive believed such action or failure to act to be in or not
opposed to the best interests of the

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Company, or if Executive shall be entitled, under applicable law or the
Certificate of Incorporation or By-Laws of the Company, to be indemnified with
respect to such action or failure to act, (c) in the event Employer makes a good
faith determination that Executive is so disabled, for mental or physical
reasons, that he is unable to satisfactorily perform his duties hereunder for an
aggregate of 180 days during any period of 12 consecutive months, or (d) the
death of Executive.

     9.3 Termination of Executive for Cause pursuant to this section 9 shall be
communicated by a notice of termination.

     10.  EXPENSES

     The Company shall reimburse Executive for reasonable expenses incurred in
connection with the performance of his duties hereunder upon presentation to it
by Executive from time to time of an itemized account of such expenditures in
accordance with the Company's procedures as in effect from time to time.

     11.  NONDISCLOSURE; NONCOMPETE; INVENTIONS

     11.1 "Confidential Information" Defined. As used in this paragraph 11, the
term "Confidential Information" shall mean any and all information (verbal and
written) relating to the Company or any of its respective subsidiaries or any of
its respective activities, other than such information which can be shown by
Executive to be in the public domain (such information not being deemed to be in
the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of a breach of the
provisions of section 11.2 below, including, but not limited to, information
relating to: technology; research; test procedures and results; machinery and
equipment; manufacturing processes; financial information; products; identity
and description of raw materials and services used; purchasing; costs; pricing;
engineering; customers and prospects; marketing; and selling and servicing.

     11.2 Nondisclosure of Confidential Information. Executive shall not, at any
time during the term of his employment by the Company (other than as

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may be required in connection with the performance by him of his duties
hereunder) or thereafter directly or indirectly, use, communicate, disclose or
disseminate any Confidential Information in any manner whatsoever.

     11.3 Non-compete Covenant

     (a) Unless Executive has terminated for Good Reason, Executive shall not,
during the period of his employment by the Company and for a period of 12 months
thereafter, directly or indirectly (a) engage in any business (whether as owner,
manager, operator, lender, partner, shareholder, licensor, licensee, joint
venturer, employee, consultant or otherwise) in which the Company or any of its
then subsidiaries is engaged (or is actively considering engaging) during the
term of Executive's employment by the Company in any geographic area in which
the Company or any of its respective subsidiaries is so engaged or is actively
considering engaging, or (b) take any other action which constitutes an
interference with or a disruption of the activities of the company or any of its
subsidiaries. Notwithstanding the foregoing, Executive shall be permitted to own
(as a passive investment) not more than 1% of any class of securities which is
registered under the Securities Exchange Act of 1934, as amended; provided,
however, that said 1% limitation shall apply to the aggregate holdings of
Executive and those of all other persons and entities with whom Executive has
agreed to act for the purpose of acquiring, holding, voting or disposing of such
securities.

     11.4 Certain Activities. For purposes of clarification, but not of
limitation, Executive hereby acknowledges and agrees that the provisions of
section 11.3 above shall serve as a prohibition against him, during the period
referred to therein, directly or indirectly, hiring, offering to hire, enticing
away or in any other manner persuading or attempting to persuade any officer,
employee, agent, lessor, lessee, licensor, licensee, customer, prospective
customer or supplier of the Company or any of its subsidiaries to discontinue or
alter his or its relationship with the Company or any of its subsidiaries.

     11.5 Inventions. Executive shall assign, transfer, convey and deliver to
the Company, and hereby does assign, transfer and convey to the Company, all

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right, title and interest in and to all ideas, concepts, inventions, devices and
improvements which pertain to methods, apparatus, designs, products, processes,
devices or services sold, leased, used under consideration or development by the
Company or any of subsidiaries, or which otherwise relate or pertain to the
business, functions or operations of the Company or any of its subsidiaries,
whether or not patentable or copyrightable (collectively called "Inventions"),
and in and to any and all patents, copyrights, trademarks and other protection
with respect thereto and applications therefor (including continuations,
continuations-in-part, divisions, reissues, renewals and extensions) for all
countries relating to such Inventions, which Executive, either alone or with
others, may make, conceive or reduce to practice during the term of his
employment by the Company (it being agreed that any Invention disclosed by
Executive within one year following the termination of his employment by the
Company shall be deemed to fall within the provisions of this section 11.5
unless proved by him to have been first conceived, made and reduced to practice
following the termination of his employment by the Company). Executive shall (i)
promptly communicate and disclose to the Company all information, data and
details concerning all Inventions, and (ii) during the term of his employment by
the Company and at any time thereafter, execute all papers and perform all acts,
and cooperate with the Company and its counsel in any other way which, in the
sole view of the Company, is necessary and proper to more fully effectuate the
provisions of this section 11.5. All expenses in connection with the obligations
of Executive under this section 11.5 shall be borne by the Company or its
nominee.

     11.6 Records. During the period of his employment by the Company, Executive
shall make and maintain adequate and current written records of all Inventions,
in the form of notes, sketches, drawings and/or reports relating thereto, which
records shall be and shall remain the property of the Company and shall be
available to the Company at all times. Upon the termination of Executive's
employment for any reason whatsoever, all documents, records, notebooks and
other materials which refer or relate to any aspect of the business which
are in the possession of Executive, including all copies thereof, shall be
promptly returned to Employer.

     11.7 Injunctive Relief, etc. The parties hereto hereby acknowledge and
agree that (i) the Company would be irreparably injured in the event of

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a breach by Executive of any of his obligations under this paragraph 11, (ii)
monetary damages would not be an adequate remedy for any such breach, and (iii)
the Company shall be entitled to injunctive relief, in addition to any other
remedy which it may have, in the event of any such breach. It is hereby also
agreed that the existence of any claims which Executive may have against the
Company or its subsidiaries, whether under this Agreement or otherwise, shall
not be a defense to the enforcement by the Company of any of its rights under
this paragraph 11.

     11.8 Scope of Restriction. It is the intent of the parties hereto that the
covenants contained in this paragraph 11 shall be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement is sought (Executive hereby acknowledging that said restrictions are
reasonably necessary for the protection of the Company). Accordingly, it is
hereby agreed that if any of the provisions of this paragraph 11 shall be
adjudicated to be invalid or unenforceable for any reason whatsoever, said
provision shall be (only with respect to the operation thereof in the particular
jurisdiction in which such adjudication is made) construed by limiting and
reducing it so as to be enforceable to the extent permissible, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of said provision in any other jurisdiction.

     11.9 Nonexclusivity. The undertakings of Executive contained in this
paragraph 11 shall be in addition to, and not in lieu of, any obligations which
he may have with respect to the subject matter hereof, whether by contract, as a
matter of law or otherwise.

     12.  CAPACITY, ETC.

     Employee hereby represents and warrants to Employer that: (a) he has full
power, authority and capacity to execute and deliver this Agreement, and to
perform his obligations hereunder, (b) said execution, delivery and performance
will not (and with the giving of notice or lapse of time or both would not)
result in the breach of any agreements or other obligations to which he is a
party or otherwise bound, and (c) this Agreement is his valid and binding
obligation in accordance with its terms.

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     13.  NOTICES

     All notices or communications hereunder shall be in writing, addressed as
follows:

                              To the Company:
                              20 East Sunrise Highway
                              Suite 201
                              Valley Stream, New York 11581

                              To Executive:
                              19 Arcadia Drive
                              Dix Hills, NY  11746

     Any such notice or communication shall be sent certified or registered
mail, return receipt requested, postage prepaid, addressed as above (or to such
other address as such party may designate in writing from time to time), and the
actual date of receipt, as shown by the receipt therefor, shall determine the
time at which notice was given.

     14.  SEPARABILITY, LEGAL FEES

     If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect. The Company shall pay all legal fees and other fees and expenses which
Executive may incur in entering into this Agreement, if executed (provided the
amount of such legal fees shall not exceed $2,500) or in obtaining, or
attempting to obtain compensation or other benefits under this Agreement.

     15.  INDEMNIFICATION

     The Company shall indemnify and hold harmless the Executive from and
against any and all damage, loss, liability or expense (including reasonable
attorneys' fees which shall be advanced by the Company) arising out of or with
respect to the performance of his duties hereunder in his capacity as an officer
and employee of the Company (or any subsidiary or affiliate thereof) to the
maximum extent permitted by law.

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The Executive shall notify the Company of any claim by any third party coming to
his attention which could result in any liability on the Company's part. The
Company shall have the right to conduct the defense against any such claim with
counsel of its selection. The obligations of the Company under this Section 16
shall continue following the termination of this Agreement and/or the
termination of employment of the Executive with the Company.

     16.  BINDING EFFECT, ASSIGNMENT

     (a) This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by Executive or by the Company. The
Company shall not assign this Agreement to any successor or assignee of the
Company without the written consent of Executive.

     (b) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

     17.  GOVERNING LAW

     This Agreement shall be construed, interpreted, and governed in accordance
with the laws of the State of New York.

     18.  ARBITRATION

     Any controversy or claim arising out of or relating to this agreement, or
the breach thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in New
York, New York,

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and judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.

     19.  ENTIRE AGREEMENT

     This Agreement represents the entire agreement of the parties and shall
supersede any and all previous contracts, arrangements or understandings between
the Company and Executive with respect to the subject matter hereof. The
Agreement may be amended at any time by mutual written agreement of the parties
hereto

     20.  HEADINGS

     The headings contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this Agreement.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and Executive has hereunto set his hand effective as of the date set
forth above.

                                            GLOBAL PAYMENT TECHNOLOGIES, INC.

                                            By: s/ Stephen Katz
                                               ---------------------------------
                                                      Stephen Katz
                                                      Chairman of the Board

                                               s/ Thomas Oliveri
                                               ---------------------------------
                                                         Thomas Oliveri

                                       14<PAGE>   1
                                                                     EXHIBIT 4.2

               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

This Amended and Restated Registration Rights Agreement (the "AGREEMENT"), dated
as of December__, 1999, is entered into by and among IET-INTELLIGENT ELECTRONICS
LTD. (the "COMPANY"), OAK INVESTMENT PARTNERS VI, L.P., OAK VI AFFILIATES FUND
L.P., GENESIS PARTNERS I, L.P., THE GENESIS PARTNERS I (CAYMAN) L.P. WORLDVIEW
TECHNOLOGY PARTNERS I, L.P., WORLDVIEW TECHNOLOGY INTERNATIONAL I, L.P.,
WORLDVIEW STRATEGIC PARTNERS I L.P. SEMEL INVESTMENTS LTD., ADSHA PROJECT
INITIATION AND DEVELOPMENT LTD., NORMAN NIE, HAMBRECHT AND QUIST CALIFORNIA,
CHRISTINA M. MORGAN, JAMES A. DAVIDSON, MARK J. ZANOLI, ZOHAR ZISAPEL, MERITECH
CAPITAL PARTNERS L.P. and MERITECH CAPITAL AFFILIATES L.P. (collectively, the
"SHAREHOLDERS") and PROF. MOSHE BEN BASSAT and IDIT BEN BASSAT (together the
"FOUNDER").

                                 R E C I T A L S

The parties wish to set out their respective rights and obligations with respect
to registration of the shares of the company for trading and to replace all
previous agreements between the Company and any of them regarding such
registration by the terms and provisions of this Agreement.

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

1.    Certain Definitions. As used in this Agreement, the following terms shall
      have the following respective meanings:

      "COMMISSION" shall mean the United States Securities and Exchange
      Commission or any other federal agency at the time administering the
      Securities Act or the equivalent authority of any other applicable
      jurisdiction.

      "DOLLAR OR $" shall mean United States dollar.

      "EXCHANGE ACT" shall mean the United States Securities Exchange Act of
      1934, as amended, and the rules and regulations promulgated thereunder.

      "HOLDER" shall mean any holder, or an assignee under Section 11 hereof, of
      outstanding Registrable Securities.

      "INITIATING HOLDERS" shall mean any Holders who in the aggregate are
      Holders of twenty percent (20%) or more of the outstanding Registrable
      Securities.

      "ORDINARY SHARES" shall mean the voting ordinary shares of the Company.

      "PUBLIC OFFERING" shall mean the closing of the initial offering to the
      public of the Company's shares in any jurisdiction.

<PAGE>   2

      The terms "REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
      registration effected by preparing and filing a registration statement in
      compliance with the Securities Act or prospectus in compliance with the
      Israel Securities Law, 1968 and the declaration or ordering of the
      effectiveness of such registration statement.

      "REGISTRABLE SECURITIES" shall mean Ordinary Shares (i) issued or issuable
      pursuant to the conversion of the Shares, (ii) issued in respect of
      securities issued pursuant to the conversion of the Shares upon any stock
      split, stock dividend, recapitalization, substitution, or similar event,
      (iii) issued in respect of securities purchased pursuant to preemptive
      rights or rights of first refusal conferred upon the Holders of the
      Shares, and (iv) only with regard to Section 3, held by the Founder and
      Ordinary Shares issued, pursuant to the conversion of the Shares, but only
      to the extent provided by Section 3(c) hereof; provided, however, that
      Registrable Securities shall not include any (a) Ordinary Shares which
      have previously been registered, (b) Ordinary Shares which have previously
      been sold to the public, or (c) securities which would otherwise be
      Registrable Securities held by a Holder who is then permitted to sell all
      such securities within any three (3) month period following the Public
      Offering pursuant to Rule 144 under the Securities Act if such securities
      then held by such Holder constitute less than one percent of the Company's
      out standing equity securities.

      "REGISTRATION EXPENSES" shall mean all expenses (excluding Selling
      Expenses) incurred in connection with a registration or offering under
      this Agreement, including, without limitation, all registration and filing
      fees, printing expenses, fees and disbursements of counsel for the
      Company, blue sky fees and expenses, and the expense (not to exceed
      $15,000) of any special audits incident to or required by any such
      registration (but excluding the compensation of regular employees of the
      Company, which shall be paid in any event by the Company).

      "SECURITIES ACT" shall mean the United States Securities Act of 1933, as
      amended, and the rules and regulations promulgated thereunder.

      "SELLING EXPENSES" shall mean all underwriting discounts and selling
      commissions applicable to the sale of Registrable Securities, and fees and
      expenses of special counsel for the selling shareholders.

      "SHARES" shall mean shares of the Company's Class A Convertible Preferred
      Shares, Class A-1 Convertible Preferred Shares, Class B Convertible
      Preferred Shares, Class B Convertible Ordinary Shares, Class C Convertible
      Preferred Shares and Class D Convertible Preferred Shares.

2.    Requested Registration.

      a.    Shares held by Founder: For the purpose of this Section only and
            notwithstanding anything to the contrary contained herein,
            Registrable Securities shall not include Ordinary Shares held by the
            Founder, except for Ordinary Shares issued or issuable pursuant to
            conversion of Preferred Shares.

      b.    Request for Registration. If after the earlier of March 29, 2001 or
            12 months following the Public Offering, the Company shall receive
            from Initiating Holders a written request that the Company effect
            any registration in the jurisdiction in which the public offering is
            made, with respect to the lesser of at least twenty

                                        2
<PAGE>   3

            percent (20%) of the Registrable Securities or such lesser number of
            Registrable Securities which would result in an aggregate offering
            of at least $10,000,000, the Company will:

            (i)   promptly give written notice of the proposed registration to
                  all other Holders; and

            (ii)  as soon as practicable, use its best efforts to effect such
                  registration (including, without limitation, the execution of
                  an undertaking to file post effective amendments, appropriate
                  qualification under applicable blue sky or other state
                  securities laws and appropriate compliance with applicable
                  regulations issued under the Securities Act) as may be so
                  requested and as would permit or facilitate the sale and
                  distribution of all or such portion of such Registrable
                  Securities as are specified in such request, together with all
                  or such portion of the Registrable Securities of any Holder or
                  Holders joining in such request as are specified in a written
                  request delivered to the Company within fifteen (15) days
                  after receipt of such written notice from the Company;
                  provided that the Company shall not be obligated to effect, or
                  to take any action to effect, any such registration pursuant
                  to this Section after the Company has effected two (2) such
                  registrations pursuant to this subsection (a) and such
                  registrations have been declared or ordered effective and the
                  sales of such Registrable Securities have closed (or such
                  registration was not declared or ordered effective); provided
                  further that no such demand shall be made within 180 days of
                  the effective date of a prior registration statement.

            The Company shall file a registration statement covering the
            Registrable Securities so requested to be registered as soon as
            practicable, after receipt of the request or requests of the
            Initiating Holders; provided, however, that if the Company shall
            furnish to such Holders a certificate signed by the Chairman of the
            Board of Directors of the Company stating that in the good faith
            judgment of the Board of Directors of the Company, it would be
            seriously detrimental to the Company and its shareholders for such
            registration statement to be filed on or before the time filing
            would be required and it is therefore essential to defer the filing
            of such registration statement, the Company shall have the right to
            defer such filing for a period of not more than ninety (90) days
            after receipt of the request of the Initiating Holders.

            A registration requested pursuant to this Section shall not be
            deemed to have been effected (i) unless a registration statement
            with respect thereto has become effective under the Securities Act
            or any equivalent law of any other applicable jurisdiction, provided
            that a registration which does not become effective after the
            Company has filed a registration statement with respect thereto
            solely by reason of the refusal of the holders of Registrable
            Securities to proceed shall be deemed to have been effected by the
            Company pursuant to this Section unless such refusal to proceed is
            caused by a material adverse change in the business or operations of
            the Company after such request for registration or (ii) if, after it
            has become effective, such registration becomes subject to any stop
            order, injunction or other order or requirement of the Commission or
            other governmental agency or court for any reason and such order,
            injunction or requirement is not promptly withdrawn or lifted.

                                        3
<PAGE>   4

      (c)   Underwriting. If the Initiating Holders intend to distribute the
            Registrable Securities covered by their request by means of an
            underwriting, they shall so advise the Company as a part of their
            request made pursuant to this Section, and the Company shall include
            such information in the written notice referred to in subsection
            (b)(i) above. The right of any Holder to registration pursuant to
            this Section shall be conditioned upon such Holder's participation
            in such underwriting and the inclusion of such Holder's Registrable
            Securities in the underwriting (unless otherwise mutually agreed by
            a majority in interest of the Initiating Holders and such Holder
            with respect to such participation and inclusion) to the extent
            provided herein. A Holder may elect to include in such underwriting
            all or a part of the Registrable Securities he holds.

            The Company shall (together with all Holders proposing to distribute
            their securities through such underwriting) enter into an
            underwriting agreement in customary form with the representative of
            the underwriter or underwriters (the "UNDERWRITER") selected for
            such underwriting by sixty percent (60%) of the Initiating Holders
            and reasonably acceptable to the Company. Notwithstanding any other
            provision of this Section, if the Underwriter determines that
            marketing factors require a limitation on the number of shares to be
            underwritten, the Underwriter may (subject to the allocation
            priority set forth below) limit the number of Registrable Securities
            to be included in the registration and underwriting to not less than
            fifty percent (50%) of the securities which Holders have requested
            be included therein. The Company shall so advise all holders of
            securities requesting registration, and the number of shares of
            securities that are entitled to be included in the registration and
            underwriting shall be allocated pro rata among such holders on the
            basis of all Registrable Securities then held by such holders. If
            any Holder disapproves of the terms of any such underwriting, such
            holder may elect to withdraw therefrom by written notice to the
            Company and the Underwriter. Any Registrable Securities excluded or
            withdrawn from such underwriting shall be withdrawn from such
            registration. If the Underwriter has not limited the number of
            Registrable Securities or other securities to be underwritten, the
            Company may include its securities for its own account in such
            registration if the Underwriter so agrees and if the number of
            Registrable Securities and other securities which would otherwise
            have been included in such registration and underwriting will not
            thereby be limited.

3.    Company Registration.

      (a)   If the Company shall determine to register, or offer to the public
            in any jurisdiction, any of its securities either for its own
            account or for the account of a security holder or holders
            exercising their respective demand registration rights, other than a
            registration (or its equivalent in other jurisdictions) (i) relating
            solely to employee benefit plans or to a Commission Rule 145
            transaction, or (ii) on any form which does not permit secondary
            sales or does not include substantially the same information as
            would be required to be included in a registration statement
            covering the sale of Registrable Securities, the Company will:

            (i)   promptly give to each Holder written notice thereof (which, to
                  the extent then known, shall include a list of the
                  jurisdictions in which the Company

                                        4
<PAGE>   5
                  intends to attempt to qualify such securities under the
                  applicable blue sky or other state securities laws); and

            (ii)  include in such registration (and any related qualification
                  under blue sky laws or other compliance), and in any
                  underwriting involved therein, all of the Registrable
                  Securities specified in a written request or requests made by
                  any Holder within fifteen (15) days after receipt of the
                  written notice from the Company described in clause (i) above,
                  except as set forth in subsection (b) below. Such written
                  request may specify all or a part of a Holder's Registrable
                  Securities.

      (b)   Underwriting. If the registration of which the Company gives notice
            is for a registered public offering involving an underwriting, the
            Company shall so advise the Holders as a part of the written notice
            given pursuant to subsection (b)(i) above. In such event the right
            of any Holder to registration pursuant to this Section shall be
            conditioned upon such Holder's participation in such underwriting
            and the inclusion of such Holder's Registrable Securities in the
            underwriting to the extent provided herein. All Holders proposing to
            distribute their securities through such underwriting shall
            (together with the Company) enter into an underwriting agreement in
            customary form with the Underwriter selected for underwriting by the
            Company. Notwithstanding any other provision of this Section, if the
            Underwriter determines that marketing factors require a limitation
            on the number of shares to be underwritten, and (a) if such
            registration is the first offering of the Company's securities to
            the public, the Underwriter may (subject to the allocation priority
            set forth below) exclude from such registration and underwriting
            some or all of the Registrable Securities which would otherwise be
            underwritten pursuant hereto (but no Registrable Securities may be
            excluded until all other securities held by Company's shareholders
            have been excluded), and (b) if such registration is other than the
            first registered offering of the sale of the Company's securities to
            the public, the Underwriter may (subject to the allocation priority
            set forth below) limit the number of Registrable Securities to be
            included in the secondary portion of the registration and
            underwriting to not less than twenty five percent (25%) of the total
            number of securities to be offered to the public. The Company shall
            so advise all holders of securities requesting registration, and the
            number of shares of securities that are entitled to be included in
            the registration and underwriting by persons other than the Company
            shall be allocated in the following priority: first, to Holders of
            Registrable Securities and to the Founder only with respect to
            Ordinary Shares issued pursuant to conversion of Shares of the
            Founder, to the extent of seventy five percent (75%) of the
            Registrable Securities to be included in the registration and
            underwriting (and pro rata among such holders on the basis of all
            the aforesaid shares); and then, to Founder, to the extent of
            twenty-five percent (25%) of the Registrable Securities to be
            included in the registration and underwriting. If any Holder
            disapproves of the terms of any such underwriting, he may elect to
            withdraw therefrom by written notice to the Company and the
            Underwriter. Any Registrable Securities or other securities excluded
            or withdrawn from such underwriting shall be withdrawn from such
            registration.

      (c)   Piggyback Registration Rights. The Founder shall be entitled to
            include (subject to any underwriter cutbacks as provided in this
            Agreement) Ordinary Shares in any registration by the Company under
            subsection (a) above.

                                        5
<PAGE>   6

4.    Registration on Form S-3. In case the Company shall receive from any
      Holder or Holders of Registrable Securities a written request or requests
      that the Company effect a registration on Form S-3 (or any successor to
      Form S-3) or any similar short-form registration statement, including Form
      F-3 (for purposes of this Agreement, "Form S-3"), and any related
      qualification or compliance with respect to all or a part of the
      Registrable Securities owned by such Holder or Holders, the Company will:

      (i)   promptly give written notice of the proposed registration, and any
            related qualification or compliance, to all other Holders of
            Registrable Securities; and

      (ii)  as soon as practicable, effect such registration and all such
            qualifications and compliances as may be so requested and as would
            permit or facilitate the sale and distribution of all or such
            portion of such Holder's or Holders' Registrable Securities as are
            specified in such request, together with all or such portion of the
            Registrable Securities of any other Holder or Holders joining in
            such request as are specified in a written request given within
            fifteen (15) days after receipt of such written notice from the
            Company, subject only to the following limitations:

      (a)   The Company shall not be obligated to cause a registration pursuant
            on Form S-3 to become effective prior to sixty (60) days following
            the effective date of the Company's most recent registration,
            provided that the Company shall use its best efforts to achieve such
            effectiveness promptly following such sixty (60) days period, and
            that notice of Company-initiated registration is given to Holders
            before the receipt of a request from a holder of Registrable
            Securities for registration on Form S-3, provided, however, that if
            the Company shall furnish to such Holders a certificate signed by
            the Chairman of the Board of Directors of the Company stating that
            in the good faith judgment of the Board of Directors of the Company,
            it would be seriously detrimental to the Company and its
            shareholders for such registration statement to be filed on or
            before the time filing would be required and it is therefore
            essential to defer the filing of such registration statement, the
            Company shall have the right to defer such filing for a period of
            not more than sixty (60) days after receipt of the request of the
            Initiating Holders.

      (b)   The Company shall not be required to effect a registration pursuant
            to this Section unless the Holder or Holders requesting registration
            propose to dispose of shares of Registrable Securities having an
            aggregate disposition price (before deduction of underwriting
            discounts and expenses of sale) of at least $500,000; and

      (iii) The Company shall not be required to maintain and keep any such
            registration on Form S-3 effective for a period exceeding ninety
            (90) days from the effective date thereof. The Company shall give
            notice to all Holders of the receipt of a request for registration
            pursuant to this Section and shall provide a reasonable opportunity
            for all such other holders to participate in the registration.
            Subject to the foregoing, the Company will use its best efforts to
            effect promptly the registration of all shares of Registrable
            Securities on Form S-3 to the extent requested by the Holder or
            Holders thereof for purposes of disposition. In the event the
            Underwriter determines that market factors require a limitation on
            the number of shares to be underwritten, then shares shall be
            excluded from such registration and underwriting pursuant to the
            method described in Section 3(b).

                                        6
<PAGE>   7

      (iv)  Subject to the foregoing, the Company shall file a Form S-3
            registration statement covering the Registrable Securities and other
            securities so requested to be registered as soon as practicable
            after receipt of the request or requests of the Holders.
            Registrations effected pursuant to this Section 4 shall not be
            counted as requested registrations or registrations effected
            pursuant to Sections 2 or 3, respectively.

5.    Expenses of Registration. All Registration Expenses incurred in connection
      with any registration, qualification or compliance pursuant to this
      Agreement shall be borne by the Company, and all Selling Expenses shall be
      borne by the holders of the securities so registered pro rata on the basis
      of the number of their shares so registered; provided, however, that the
      Company shall not be required to pay any Registration Expenses if, as a
      result of the withdrawal of a request for registration by Initiating
      Holders, the registration statement does not become effective, unless such
      withdrawal is caused by a material adverse change in the business or
      operations of the Company after such request for registration, or unless
      the Initiating Holders agree to have such registration considered effected
      and the sales of which have closed. If the Company is not required to pay
      any Registration Expenses, then the Holders requesting registration shall
      bear such Registration Expenses pro rata on the basis of the number of
      their shares so included in the registration request, and such
      registration shall not be considered a registration for purposes computing
      the number of effected requested registrations of which the sales have
      closed.

6.    Registration Procedures. In the case of each registration effected by the
      Company pursuant to this Agreement, the Company will keep each Holder
      advised in writing as to the initiation of such registration and as to the
      completion thereof. At its expense, the Company will:

      (a)   Prepare and file with the Commission a registration statement with
            respect to such Registrable Securities and use all reasonable
            efforts to cause such registration statement to become effective,
            and, upon the request of the Holders of a majority of the
            Registrable Securities registered thereunder, keep such registration
            statement effective for up to ninety (90) days or, if earlier, until
            the Holder or Holders have completed the distribution related
            thereto.

      (b)   Prepare and file with the Commission such amendments and supplements
            to such registration statement and the prospectus used in connection
            with such registration statement as may be necessary to comply with
            the provisions of the Securities Act with respect to the disposition
            of all securities covered by such registration statement for the
            period set forth in paragraph (a) above.

      (c)   Furnish to the Holders such number of copies of a prospectus,
            including a preliminary prospectus, in conformity with the
            requirements of the Securities Act, and such other documents as they
            may reasonably request in order to facilitate the disposition of
            Registrable Securities owned by them.

      (d)   Use its reasonable best efforts to register and qualify the
            securities covered by such registration statement under such other
            securities or Blue Sky laws of such jurisdictions as shall be
            reasonably requested by the Holders; provided that the Company shall
            not be required in connection therewith or as a condition thereto to
            qualify to do business or to file a general consent to service of
            process in any such states or jurisdictions.

                                        7
<PAGE>   8

      (e)   Notify each Holder of Registrable Securities covered by such
            registration statement at any time when a prospectus relating
            thereto is required to be delivered under the Securities Act of the
            happening of any event as a result of which the prospectus included
            in such registration statement, as then in effect, includes an
            untrue statement of a material fact or omits to state a material
            fact required to be stated therein or necessary to make the
            statements therein not misleading in the light of the circumstances
            then existing.

      (f)   Use its best efforts to furnish, on the date that such Registrable
            Securities are delivered to the underwriters for sale, if such
            securities are being sold through underwriters, (i) an opinion,
            dated as of such date, of the counsel representing the Company for
            the purposes of such registration, in form and substance as is
            customarily given to underwriters in an underwritten public
            offering, addressed to the underwriters, if any, and (ii) a letter
            dated as of such date, from the independent certified public
            accountants of the Company, in form and substance as is customarily
            given by independent certified public accountants to underwriters in
            an underwritten public offering addressed to the underwriters.

       (g)  In connection with any underwritten offering pursuant to a
            registration statement filed pursuant to Section 2 hereof, the
            Company will enter into any underwriting agreement reasonably
            necessary to effect the offer and sale of Ordinary Shares, provided
            such underwriting agreement contains customary underwriting
            provisions, and provided further that if the underwriter so requests
            the underwriting agreement will contain customary indemnification
            and contribution provisions, and provided further that the
            Underwriter is reasonably acceptable to the Company.

7.    Indemnification.

      (a)   The Company will indemnify each Holder, each of its officers,
            directors and partners, and each person controlling such Holder, if
            Registrable Securities held by such Holder are included in the
            securities with respect to which registration, qualification or
            compliance has been effected pursuant to this Agreement, and each
            underwriter, if any, and each person who controls any underwriter,
            against all claims, losses, damages and liabilities (or actions in
            respect thereof) arising out of or based on any untrue statement (or
            alleged untrue statement) of a material fact contained in any
            prospectus, offering circular or other document (including any
            related registration statement, notification or the like) incident
            to any such registration, qualification or compliance, or based on
            any omission (or alleged omission) to state therein a material fact
            required to be stated therein or necessary to make the statements
            therein, in light of the circumstances in which they were made, not
            misleading, or any violation by the Company of the Securities Act
            including any rule or regulation thereunder applicable to the
            Company relating to action or inaction required of the Company in
            connection with any such registration, qualification or compliance,
            and will reimburse each such Holder, each of its officers, directors
            and partners, and each person controlling such Holder, each such
            underwriter and each person who controls any such underwriter, for
            any legal and any other expenses reasonably incurred in connection
            with investigating and defending any such claim, loss, damage,
            liability or action, provided that the Company will not be liable in
            any such case to the extent that any such claim, loss, damage,
            liability or expense arises out of or is based on any untrue
            statement (or alleged untrue statement) or omission

                                       8
<PAGE>   9

            (or alleged omission) based upon written information furnished to
            the Company by such Holder or underwriter and stated to be
            specifically for use therein.

      (b)   Each Holder will, if Registrable Securities or other securities held
            by such Holder are included in the securities as to which such
            registration, qualification or compliance is being effected,
            indemnify the Company, each of its directors, officers and agents
            and each underwriter, if any, of the Company's securities covered by
            such a registration statement, each person who controls the Company
            or such underwriter within the meaning of the Securities Act and the
            rules and regulations thereunder, each other such Holder and each of
            their officers, directors and partners, and each person controlling
            such Holder, against all claims, losses, damages and liabilities (or
            actions in respect thereof) arising out of or based on any untrue
            statement (or alleged untrue statement) of a material fact contained
            in any such registration statement, prospectus, offering circular or
            other document, or any omission (or alleged omission) to state
            therein a material fact required to be stated therein or necessary
            to make the statements therein, in light of the circumstances in
            which they were made, not misleading, and will reimburse the Company
            and such Holders, directors, officers, agents, partners, persons,
            underwriters or control persons for any legal or any other expenses
            reasonably incurred in connection with investigating of defending
            any such claim, loss, damage, liability or action, in each case to
            the extent, but only to the extent, that such untrue statement (or
            alleged untrue statement) or omission (or alleged omission) is made
            in such registration statement, prospectus, offering circular or
            other document in reliance upon and in conformity with written
            information furnished to the Company by such Holder and stated to be
            specifically for use therein; provided, however, that the
            obligations of such Holders hereunder shall be limited to an amount
            equal to the proceeds to each such Holder of securities sold as
            contemplated herein.

      (c)   Each party entitled to indemnification under this Section (the
            "INDEMNIFIED PARTY") shall give notice to the party required to
            provide indemnification (the "INDEMNIFYING PARTY") promptly after
            such Indemnified Party has actual knowledge of any claim as to which
            indemnity may be sought and shall permit the Indemnifying Party to
            assume the defense of any such claim or any litigation resulting
            therefrom, provided that counsel for the Indemnifying Party, who
            shall conduct the defense of such claim or any litigation resulting
            therefrom, shall be approved by the Indemnified Party (whose
            approval shall not unreasonably be withheld), and the Indemnified
            Party may participate in such defense at such party's expense, and
            provided further that the failure of any Indemnified Party to give
            notice as provided herein shall not relieve the Indemnifying Party
            of its obligations under this Agreement. No Indemnifying Party in
            the defense of any such claim or litigation shall, except with the
            consent of each Indemnified Party, consent to entry of any judgment
            or enter into any settlement which does not include as an
            unconditional term thereof the giving by the claimant or plaintiff
            to such Indemnified Party of a release from all liability in respect
            to such claim or litigation. Each Indemnified Party shall furnish
            such information regarding itself or the claim in question as an
            Indemnifying Party may reasonably request in writing and as shall be
            reasonably required in connection with defense of such claim and
            litigation resulting therefrom.

8.    Information by Holder. Each Holder holding securities included in any
      registration shall furnish to the Company such information regarding such
      Holder as the

                                        9
<PAGE>   10

      Company may reasonably request in writing and as shall be reasonably
      required in connection with any registration, qualification or compliance
      referred to in this Agreement.

 9.   Limitations on Registration. From and after the date of this Agreement,
      the Company shall not enter into any agreement with any holder or
      prospective holder of any securities of the Company giving such holder or
      prospective holder rights that, in the good faith judgment of the
      Company's Board of Directors, are superior to the rights herein, unless
      such superior rights are granted to each Shareholder.

10.   Rule 144 Reporting. With a view to making available the benefits of
      certain rules and regulations of the Commission which may permit the sale
      of securities to the public without registration, the Company agrees to:

      (a)   Make and keep public information available as those terms are
            understood and defined in Rule 144 under the Securities Act, at all
            times from and after ninety (90) days following the effective date
            of the first registration under the Securities Act filed by the
            Company for an offering of its securities to the general public;

      (b)   Use its best efforts to file with the Commission in a timely manner
            all reports and other documents required of the Company under the
            Securities Act and the Exchange Act at any time after it has become
            subject to such reporting requirements;

      (c)   Furnish to each Holder upon request a written statement by the
            Company as to its compliance with the reporting requirements of Rule
            144 (at any time from and after ninety (90) days following the
            effective date of the first registration statement filed by the
            Company for an offering of its securities to the general public),
            and of the Securities Act and the Exchange Act (at any time after it
            has become subject to such reporting requirements), a copy of the
            most recent annual or quarterly report of the Company, and such
            other reports and documents so filed as a Shareholder may reasonably
            request in availing itself of any rule or regulation of the
            Commission allowing a Holder to sell any such securities without
            registration.

11.   Transfer of Rights. The rights to cause the Company to register the
      Shareholder's securities granted by the Company hereof may be transferred
      or assigned, provided that (i) the Company is given written notice by a
      Shareholder at the time of said transfer or assignment, stating the name
      and address of said transferee or assignee and identifying the securities
      with respect to which such registration rights are being transferred or
      assigned, (ii) the transfer is in connection with a transfer of all
      securities of the Company held by the transferor and involves at least
      100,000 shares, or is to constituent partners or shareholders who agree to
      act through a single representative; and (iii) the transferee or assignee
      assumes the obligations of a Shareholder under this Agreement.

12.   "Market Stand-off" Agreement. Each Shareholder and the Founder agrees, if
      requested by the Company and an underwriter of Ordinary Shares (or other
      securities) of the Company, not to sell or otherwise transfer or dispose
      of any Ordinary Shares (or other securities) of the Company held by
      Shareholder or Founder during a period of time determined by the Company
      and its Underwriters (not to exceed 180 days) following the effective date
      of a registration statement of the

                                       10
<PAGE>   11

      Company filed under the Securities Act, provided that all officers and
      directors of the Company who then hold Ordinary Shares (or other
      securities) of the Company and holders of more than 1% of the Company's
      voting securities enter into similar agreements.

      Such agreement shall be in writing in a form satisfactory to the Company
      and such underwriter. The Company may impose stop-transfer instructions
      with respect to the Shares (or securities) subject to the foregoing
      restriction until the end of said period.

13.   Transfers to Permitted Transferees. In the event of a transfer to a
      Permitted Transferee (as defined in the Articles of Association of the
      Company in force at the date of this Agreement), such Permitted Transferee
      shall be entitled to all the rights and shall assume in writing all the
      obligations of the transferor with respect to the transferred shares.

14.   Public Offering Outside of the U.S. As to each Public Offering in a
      jurisdiction outside the United States, the rights contained in this
      Agreement shall be read as replaced (for such offering) by the most
      comparable provisions of such jurisdiction's securities laws. The Company
      and each of the Shareholders and the Founder shall take all necessary and
      advisable action in order so that all the Company's Class B Ordinary
      Shares and Class C Ordinary Shares will entitle their holders to the same
      rights and privileges according to this Agreement as if they were holding
      Ordinary Shares.

15.   [Reserved]

16.   Governing Law. This Agreement shall be governed by, construed and enforced
      in accordance with the laws of the State of Israel, while giving effect to
      the applicable securities and other laws of the United States.

17.   Entire Agreement. This Agreement constitutes the full and entire
      understanding and agreement between the parties regarding rights to
      registration and all previous agreements regarding registration rights are
      superseded by this Agreement and are of no further force and effect.
      Except as otherwise expressly provided herein, the provisions hereof shall
      inure to the benefit of, and be binding upon, the successors, assigns,
      heirs, executors and administrators of the parties hereto.

18.   Notices, Etc. All notices and other communications required or permitted
      hereunder shall be in writing and shall be in English and be mailed by
      first-class mail, postage prepaid, or otherwise delivered by hand or by
      messenger, addressed at such address as such holder shall have furnished
      the other parties in writing.

19.   Counterparts. This Agreement may be executed in any number of
      counterparts, each of which shall be an original, but all of which
      together shall constitute one instrument.

20.   Amendments. Any provision of this Agreement may be amended, waived or
      modified upon the written consent of the Company, the Founder and the
      Shareholders (or their assignees to whom Shareholders have expressly
      assigned their rights in compliance with Section 11 hereof) who then hold
      at least seventy-five percent (75%) of the Registrable Securities then
      held by persons entitled to registration rights hereunder (excluding the
      Founder).

                                       11
<PAGE>   12

                         [remainder of page left blank]

                                       12
<PAGE>   13

IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.

                                    IET - INTELLIGENT ELECTRONICS LTD.

                                    By:
                                       ---------------------------------

                    ------------------------            -----------------------
                        MOSHE BEN BASSAT                    IDIT BEN BASSAT

                                    OAK INVESTMENT PARTNERS VI, L.P.

                                    By:
                                       ---------------------------------

                                    OAK VI AFFILIATES FUND L.P.

                                    By:
                                       ---------------------------------

                                    GENESIS PARTNERS I L.P

                                    By:
                                       ---------------------------------

                                    GENESIS PARTNERS (CAYMAN) I L.P.

                                    By:
                                       ---------------------------------

                                    WORLDVIEW TECHNOLOGY PARTNERS I, L.P.,

                                    By:
                                       ---------------------------------

                                       13
<PAGE>   14

                                    WORLDVIEW TECHNOLOGY INTERNATIONAL I,
                                    L.P.,

                                    By:
                                       -----------------------------------

                                    WORLDVIEW STRATEGIC PARTNERS I, L.P.,

                                    By:
                                       -----------------------------------

                                    SEMEL INVESTMENTS LTD.

                                    By:
                                       -----------------------------------

                                    ADSHA PROJECT INITIATION DEVELOPMENT
                                    (TA) LTD.

                                    By:
                                       -----------------------------------

                                    ------------------------------------------
                                    ZOHAR ZISAPEL

                                    HAMBRECHT AND QUIST CALIFORNIA

                                    By:
                                       -----------------------------------------

                                    --------------------------------------------
                                    NORMAN NIE

                                    --------------------------------------------
                                    CHRISTINA M. MORGAN

                                    --------------------------------------------
                                    JAMES A. DAVIDSON

                                    --------------------------------------------
                                    MARK J. ZANOLI

                                    --------------------------------------------
                                    MERITECH CAPITAL PARTNERS L.P.

                                    By:
                                       -----------------------------------

                                       14
<PAGE>   15

                                    ------------------------------------------
                                    MERITECH CAPITAL AFFILIATES L.P.

                                    By:
                                       -----------------------------------

                                       15

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