<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>koorsc13dexhibita.txt
<DESCRIPTION>EXH. A - SHARE TRANSFER DEED - KOORS
<TEXT>

                                                                     Exhibit A


                              SHARE TRANSFER DEED


                                    BETWEEN



                              KOOR INDUSTRIES LTD.


                                      AND


                               ELBIT SYSTEMS LTD.



<PAGE>


                     [TRANSLATED FROM THE HEBREW ORIGINAL]


                              SHARE TRANSFER DEED
                              -------------------

                Made in Tel Aviv this 27th day of December 2004


                                    BETWEEN

                              KOOR INDUSTRIES LTD.
                         Public Company No. 52-001414-3
        of 14 Hamalacha Street, Afek Industrial Park, Rosh Ha'ayin 48091
                                    ("Koor")

                                                                of the one part
                                                                ---------------


                                      AND

                               ELBIT SYSTEMS LTD.
                         Public Company No. 52-004302-7
                 of the Advanced Technology Center, Haifa 31053
                                   ("Elbit")


                                                               of the other part
                                                               -----------------


WHEREAS                    Koor is the holder of 3,944,276 Ordinary Shares of
                           the issued and paid up share capital of Tadiran
                           Communications Ltd., a public company duly
                           incorporated in Israel, whose number with the
                           Companies Registrar is Public Company No.
                           51-207441-0 (hereinafter the "Company");

AND WHEREAS                Koor wishes to sell and transfer to Elbit, in two
                           stages, 3,944,276 Ordinary Shares, which on the
                           date of signing this Deed constitute approximately
                           32% of the Company's issued and paid-up share
                           capital, while in the first stage Koor will sell
                           and transfer




                                      A-2
<PAGE>


                           to Elbit 1,700,000 Ordinary Shares, which on the
                           date of signing this Deed constitute approximately
                           13.8% of the Company's issued and paid-up share
                           capital, and in the second stage Koor will sell and
                           transfer to Elbit 2,244,276 Ordinary Shares, which
                           on the date of signing this Deed constitute
                           approximately 18.2% of the Company's issued and
                           paid-up share capital, subject to and in accordance
                           with the provisions of this Deed;

AND WHEREAS                Elbit wishes to purchase and receive from Koor the
                           Shares Being Sold, subject to and in accordance with
                           the provisions of this Deed;

AND WHEREAS                the performance of this Deed, in both stages, is
                           subject to the Conditions Precedent as set out below
                           in this Deed;

AND WHEREAS                Elbit believes, without placing Elbit under any
                           obligation prior to the transaction contemplated by
                           this Deed being duly approved, if at all, by Elbit's
                           General Meeting of shareholders, that there should
                           be a consolidation of defense industries in Israel
                           and that in that context the transaction
                           contemplated by this Deed as well as the Elisra
                           Transaction, on appropriate terms and conditions,
                           are in the interest of Elbit and the Company, from
                           the perspective of Elbit as a shareholder of the
                           Company;

AND WHEREAS                Koor is interested in the performance of the
                           transaction contemplated by this Deed as part of an
                           overall transaction, in the scope of which Koor will
                           purchase shares of Elbit from Federmann Enterprises
                           Ltd, as set out in the Koor-Federmann Deed and this
                           Deed;

AND WHEREAS                the parties wish to set forth their relationship in
                           respect of the sale and purchase of the Shares Being
                           Sold in the context of this Deed.


NOW, THEREFORE, THE PARTIES HEREBY WARRANT, PROVIDE AND AGREE BETWEEN THEM AS
FOLLOWS:


1.       Preamble, Appendices and Interpretations
         ----------------------------------------

         1.1        The preamble and Appendices hereto constitute an integral
                    part hereof.

         1.2        The clause headings in this Deed are solely for the sake of
                    convenience and shall not be applied in the interpretation
                    hereof.


                                      A-3
<PAGE>

2.       Definitions

         2.1        In this Deed, the following expressions shall have the
                    meanings herein ascribed to them, unless expressly stated
                    otherwise:

                    "Elbit" means as defined in the preamble hereto;

                    "Elisra" means Elisra Electronic Systems Ltd. , Private
                    Company No. 52-003587-4;

                    "General Meeting" means as defined in the Companies Law,
                    and any adjourned meeting;

                    "U.S. dollar" or "$" means United States dollars;

                    "Stock Exchange" means the Tel-Aviv Stock Exchange Ltd.;

                    "Company" means as defined in the preamble hereto;

                    "Shareholders Agreement" means an agreement between Koor
                    and Elbit in the form of Appendix "10.7" hereto, which is
                    to be signed contemporaneously with the signature of this
                    Deed and will take effect on the First Closing Date;

                    "Stage 'A' Conditions Precedent" means the Conditions
                    Precedent for Stage 'A' of the Transaction, as set out in
                    Appendix "9.2" hereto;

                    "Stage 'B' Conditions Precedent" means the Conditions
                    Precedent for Stage 'B' of the Transaction, as set out in
                    Appendix "12.2" hereto;

                    "Conditions Precedent" means the Stage 'A' Conditions
                    Precedent and the Stage 'B' Conditions Precedent;

                    "Companies Law" means the [Israel] Companies Law, 5759-1999;

                    "Business Day" means a day on which the two major banks in
                    Israel are open for business, other than Fridays and
                    holiday eves, which shall not be treated as a Business Day;

                    "Koor" means as defined in the preamble hereto;


                                      A-4
<PAGE>

                    "First Closing Date" means the third Business Day after the
                    date on which all the Stage 'A' Suspending Conditions have
                    been fulfilled or such later date as may be agreed by the
                    parties, as provided in Clause 20.3 below;

                    "Koor-Federmann Deed First Closing Date" means the First
                    Closing Date as the term is defined in the Koor-Federmann
                    Deed;

                    "Second Closing Date" means the third Business Day after
                    the date on which all the Stage 'B' Conditions Precedent
                    have been fulfilled or such later date as may be agreed by
                    the parties, as provided in Clause 20.3 below;

                    "Koor-Federmann Deed Second Closing Date" means the Second
                    Closing Date as the term is defined in the Koor-Federmann
                    Deed;

                    "Stage 'A' Completion Deadline" means as defined in Clause
                    9.1 below;

                    "Stage 'B' Completion Deadline" means as defined in Clause
                    12.1 below;

                    "Koor-Federmann Deed Stage 'B' Completion Deadline" means
                    the Stage 'B' Completion Deadline as the term is defined in
                    the Koor-Federmann Deed;

                    "Confidential Information" means all information relating
                    to the parties hereto or to the Company, other than (a)
                    information that was in the public domain or came into the
                    public domain otherwise than due to a breach of this Deed
                    and (b) information the disclosure of which is required in
                    accordance with the provisions of applicable law;

                    "Ordinary Share" or "Ordinary Shares" means ordinary shares
                    of 1 NIS par value each of the Company's issued capital;

                    "Stage 'A' Shares" mean 1,700,000 (one million seven
                    hundred thousand) Ordinary Shares;

                    "Stage 'B' Shares" mean 2,244,276 (two million two hundred
                    forty-four thousand two hundred and seventy-six) Ordinary
                    Shares;

                    "Koor-Federmann Deed Stage 'A' Shares" means the Stage 'A'
                    Shares as the term is defined in the Koor-Federmann Deed;

                                      A-5
<PAGE>


                    "Koor-Federmann Deed Stage 'B' Shares" means the Stage 'B'
                    Shares as the term is defined in the Koor-Federmann Deed;

                    "Shares Being Sold" means the Stage 'A' Shares and the
                    Stage 'B' Shares;

                    "Federmann Enterprises" means Federmann Enterprises Ltd.,
                    Private Company No. 51-227839-1;

                    "Free and Clear" means free and clear of any charge,
                    pledge, attachment, levy, debt, lien, claim, right of
                    pre-emption, right of refusal, option, lock-up arrangement
                    or any additional or other third party right whatsoever;

                    "Elisra Transaction" means a transaction pursuant to which
                    the Company will purchase shares constituting at least 70%
                    of Elisra's issued capital;

                    "Interest" means three-month LIBOR at Bank Leumi Le-Israel
                    B.M., plus annual interest at the rate of 1.5%, compounded
                    every three months;

                    "Deed" or "this Deed" means this Share Transfer Deed
                    together with all the Appendices hereto;

                    "Koor-Federmann Deed" means the Share Transfer Deed
                    together with all the Appendices thereto made between Koor
                    and Federmann Enterprises contemporaneously with the
                    signature of this Deed, subject to the terms thereof
                    pursuant to which Federmann Enterprises will sell and
                    transfer to Koor, in two stages, 4,000,000 (four million)
                    ordinary shares of 1 NIS par value each of Elbit, which on
                    the date of signing this Deed constitute approximately 9.8%
                    of Elbit's issued share capital;

                    "Stage 'A' of the Transaction" means as defined in Clause
                    8.1 below;

                    "Stage 'B' of the Transaction" means as defined in Clause
                    11.1 below;

                    "Koor-Federmann Deed Stage 'A'" means Stage 'A' of the
                    transaction contemplated by the Koor-Federmann Deed as the
                    term is defined in the Koor-Federmann Deed;

                    "Koor-Federmann Deed Stage 'B'" means Stage 'B' of the
                    transaction contemplated by the Koor-Federmann Deed as the
                    term is defined in the Koor-Federmann Deed;


                                      A-6
<PAGE>

                    "Stage 'A' Consideration" means US$37 (thirty-seven U.S.
                    dollars) for each of the Stage 'A' Shares, totalling
                    US$62,900,000 (sixty-two million nine hundred thousand U.S.
                    dollars), and insofar as all or part of that amount is
                    actually paid after April 1, 2005, such amount shall be
                    subject to the addition of Interest from April 1, 2005
                    until the time of actual payment, all subject to the
                    adjustments as set out in Clause 15 below;

                    "Stage 'B' Consideration" means US$37 (thirty-seven U.S.
                    dollars) for each of the Stage 'B' Shares, totalling
                    US$83,038,212 (eighty-three million thirty-eight thousand
                    two hundred and twelve U.S. dollars), and insofar as all or
                    part of that amount is actually paid after April 1, 2005,
                    such amount shall be subject to the addition of Interest
                    from April 1, 2005 until the time of actual payment, all
                    subject to the adjustments as set out in Clause 15 below;

                    "Consideration" means the Stage 'A' Consideration and the
                    Stage 'B' Consideration together;

                    "Qualification Conditions" means all the requirements in
                    accordance with applicable law and pursuant to the
                    Company's incorporation documents for a person to serve as
                    a director of the Company, including security clearance as
                    required in Israel for the purpose of such service.

         2.2        The following terms shall have the meanings defined in
                    Section 1 of the [Israel] Securities Law, 5728-1968:

                    "securities", "company", "subsidiary", "acquisition of
                    securities", "holding and acquisition" and "control".

         2.3        The following terms shall have the meanings defined in
                    Section 1 of the Companies Law:

                    "dividend", "director", "external director", "public
                    company", "distribution", "bonus shares", "officer",
                    "personal interest", "transaction", "extraordinary
                    transaction", "act" and "Company Registrar".

3.       Appendices

         The following Appendices, which constitute an integral part hereof,
         are annexed to this Deed:

         3.1        Appendix 9.2 - the Stage 'A' Conditions Precedent;


                                      A-7
<PAGE>

         3.2        Appendix 10.7 - the Shareholders Agreement between Koor and
                    Elbit, which is to be entered into contemporaneously with
                    the signature of this Deed and will take effect on the
                    First Closing Date;

         3.3        Appendix 12.2 - the Stage 'B' Conditions Precedent.

4.       The Koor-Federmann Deed

         Contemporaneously with the signing this Deed, the Koor-Federmann Deed
         is also being signed. The Koor-Federmann Deed and this Deed are
         separate and unrelated deeds, except as expressly provided in this
         Deed. For the avoidance of doubt it is hereby clarified that Elbit is
         not a party to the Koor-Federmann Deed, and the provisions of the
         Koor-Federmann Deed do not impose any obligation, that is not
         expressly provided in this Deed, on Koor to Elbit or on Elbit to Koor.

5.       The Parties' Warranties and Undertakings

         The parties hereby warrant and undertake to each other as follows:

         5.1        The representations and warranties of the parties in this
                    Deed are solely as set out in this Clause 5 and in Clauses
                    6 and 7 below, as the case may be.

         5.2        The parties' warranties and undertakings as set out in this
                    Clause 5 and in Clauses 6 and 7 below, as the case may be,
                    will continue to be correct, complete and accurate as of
                    the First Closing Date and the Second Closing Date, and
                    they shall be deemed as having been given again by each of
                    the parties as of both the First Closing Date and on the
                    Second Closing Date.

6.       Koor's Warranties and Undertakings

         Koor hereby warrants and undertakes to Elbit as follows:

         6.1        That it is a duly incorporated public company, that its
                    number with the Companies Registrar is as appears in the
                    preamble hereto and that no actions or proceedings for
                    delisting, liquidation, winding-up, receivership or like
                    acts have been taken or are threatened against it.

         6.2        That on signing this Deed and until the completion of Stage
                    'A' of the Transaction it is and shall be the sole owner of
                    the Shares Being Sold (subject to the Fixed Lien), and
                    after the completion of Stage 'A' of the Transaction and
                    until the completion of Stage 'B' of the Transaction it is
                    and shall be the sole owner of the Stage 'B' Shares
                    (subject to the Fixed Lien, as will be modified as provided
                    in Clause 10.3 below), that it will not grant any person or
                    entity an option or right to purchase all or any of

                                      A-8
<PAGE>

                    the Shares Being Sold, that it has not undertaken to grant
                    such an option or right as aforesaid, that no person or
                    entity has any right of first refusal or tag-along right in
                    connection with all or any of the Shares Being Sold and
                    that on the date of signing this Deed, apart from the
                    Shares Being Sold, it does not hold securities of the
                    Company or any rights to receive or acquire securities of
                    the Company.

         6.3        That the Shares Being Sold are fully paid and Free and
                    Clear, save for a fixed lien in favor of Bank Hapoalim
                    B.M.. (in this Deed the "Bank") over all the Shares Being
                    Sold, including all the rights, income and proceeds that
                    Koor now or in future has from them (in this Deed the
                    "Fixed Lien") and that in the context of the Fixed Lien the
                    Shares Being Sold are held in a trust account at the Bank
                    in the name of Poalim Trust Services Ltd. (in this Deed the
                    "Trust Account") and that on the First Closing Date, upon
                    the Stage 'A' Consideration being received in Koor's
                    account, the Stage 'A' Shares will be Free and Clear and
                    that on the Second Closing Date, upon the Stage 'B'
                    Consideration being received in Koor's account, the Stage
                    'B' Shares will be Free and Clear.

         6.4        That apart from Koor's board of directors' approval, Koor
                    has no need, including pursuant to its incorporation
                    documents and applicable law, in Israel or abroad, to
                    obtain any other approvals from any of its organs for the
                    purpose of entering into this Deed and performing all its
                    obligations pursuant hereto.

         6.5        That subject to ratification by Koor's board of directors,
                    the signatories on Koor's behalf to this Deed and the
                    documents ancillary hereto are the persons who are
                    empowered, on Koor's behalf, to sign this Deed and the
                    documents ancillary hereto and/or necessary for the
                    performance hereof and to obligate Koor by their signature,
                    and this Deed, together with all its terms and conditions,
                    obligates Koor in all respects.

         6.6        That subject to the approval of Koor's board of directors
                    and the fulfilment of the Conditions Precedent, there is no
                    legal or other impediment to its entering into this Deed
                    and the performance hereof and that this Deed and the
                    performance of its obligations pursuant hereto are not
                    contrary to any judgment, order or direction of a court, to
                    any contract, understanding or agreement to which Koor is a
                    party, to its incorporation documents or to any other
                    obligation of Koor, whether by virtue of contract (oral, by
                    conduct or written) or by virtue of law.

         6.7        That apart from Koor's board of directors' approval and the
                    Conditions Precedent, all the approvals, consents and
                    permits have been obtained and all the necessary
                    proceedings have been performed, including with any


                                      A-9
<PAGE>

                    authorities, government entities or any other body, for the
                    purpose of Koor's entering into this Deed and performing
                    its obligations pursuant hereto, including transferring the
                    Shares Being Sold to Elbit.

         6.8        That from the time of Koor's acquisition of the Shares
                    Being Sold, Koor and/or its controlling shareholders and/or
                    officers have not entered into a transaction in which any
                    of them has a personal interest with the Company and/or its
                    subsidiaries, apart from the payment of remuneration to the
                    Company's directors, as customary with the Company, and
                    apart from arrangements for the grant of relief, insurance
                    and indemnity by the Company to the Company's directors.

                    Nothing in this Clause 6.8 shall be deemed to prevent Koor
                    and the Company from entering into the Elisra Transaction
                    or into transactions to which Elbit has given its consent
                    by written notice signed by two officers of Elbit, without
                    any further approval being necessary.

         6.9        That as at the time of signing this Deed, the Company
                    and/or its subsidiaries have not entered into a transaction
                    in which Koor and/or its subsidiaries and/or Koor's
                    controlling shareholders and/or officers and/or companies
                    controlled by any of them have a personal interest, other
                    than: (1) transactions in the ordinary course of business
                    with Elisra and its subsidiaries, the total financial value
                    of which does not exceed $5,000,000; (2) a transaction in
                    connection with the provision of warehousing services by
                    the Company to subsidiaries of Elisra; (3) payment of
                    remuneration to the Company's directors; (4) arrangements
                    for the grant of relief, insurance and indemnity by the
                    Company to the Company's directors; and that from the time
                    of signing this Deed until the Second Closing Date, the
                    Company and/or its subsidiaries will not enter into a
                    transaction in which Koor and/or its subsidiaries and/or
                    controlling shareholders and/or officers of Koor and/or the
                    companies controlled by any of them have a personal
                    interest, other than: (1) transactions in the ordinary
                    course of business with Elisra and its subsidiaries; (2)
                    transactions not in the ordinary course of business, the
                    total financial value of which does not exceed $5,000,000;
                    (3) a transaction in connection with the provision of
                    warehousing services by the Company to subsidiaries of
                    Elisra; (4) payment of remuneration to the Company's
                    directors as customary in the Company; and (5) arrangements
                    for the grant of relief, insurance and indemnity by the
                    Company to the Company's directors.

                    Nothing in this Clause 6.8 [sic] shall be deemed to prevent
                    Koor and the Company from entering into the Elisra
                    Transaction or transactions to which Elbit has granted its
                    consent by written notice signed by two officers of Elbit,
                    without any further approval being necessary.


                                     A-10
<PAGE>

         6.10       That from the time the Shares Being Sold were acquired by
                    Koor until the time of signing this Deed, the Company had
                    not brought to Koor's attention nor given any report to the
                    public that any material agreement to which the Company is
                    a party had been terminated or modified or that there was
                    any intent to terminate or modify any material agreement to
                    which the Company is a party.

7.       Elbit's Warranties and Undertakings

         Elbit hereby warrants and undertakes to Koor as follows:

         7.1        That it is a duly incorporated public company, that its
                    number with the Companies Registrar is as appears in the
                    preamble hereto and that no actions or proceedings for
                    delisting, liquidation, winding-up, receivership or like
                    acts have been taken or are being threatened against it.

         7.2        That it has the ability and resources to perform its
                    obligations pursuant to this Deed in full and on time and
                    that it is in possession of the financial resources
                    sufficient for payment of the Consideration in full and at
                    the times set out in this Deed.

         7.3        That apart from approval by Elbit's audit committee and
                    board of directors, Elbit has no need, including pursuant
                    to its incorporation documents and law, in Israel or
                    abroad, to obtain any other approvals from any of its
                    organs for the purpose of entering into this Deed and
                    performing all its obligations pursuant hereto, except for
                    approval by Elbit's General Meeting in accordance with
                    Section 275 of the Companies Law, if and insofar as not yet
                    obtained. At the time of signing this Deed, Elbit's General
                    Meeting's approval had not yet been obtained.

         7.4        That subject to the approvals of Elbit's audit committee
                    and board of directors, the signatories on behalf of Elbit
                    to this Deed and the documents ancillary hereto are those
                    who are empowered, on Elbit's behalf, to sign this Deed and
                    the documents ancillary hereto and/or necessary for the
                    performance hereof, and to obligate Elbit by their
                    signatures, and this Deed, including all its terms and
                    conditions, obligates Elbit in all respects, subject to
                    obtaining Elbit's General Meeting's approval.

         7.5        That subject to the approvals of Elbit's audit committee
                    and board of directors and the fulfilment of the Conditions
                    Precedent, there is no legal or other impediment to its
                    entering into and performing this Deed and that this Deed
                    and the performance of its obligations pursuant hereto are
                    not contrary to any judgment, order or direction of a
                    court, to any contract,


                                     A-11
<PAGE>

                    understanding or agreement to which it is a party, to its
                    incorporation documents or to any other obligation of
                    Elbit, whether by virtue of contract (oral, by conduct or
                    written) or by virtue of law.

         7.6        That apart from the approvals of Elbit's audit committee
                    and board of directors and apart from the Conditions
                    Precedent, including Elbit's General Meeting's approval,
                    all the approvals, consents and permits have been obtained
                    and all the necessary proceedings have been performed,
                    including with any authorities, government entities or any
                    other body, for the purpose of Elbit's entering into this
                    Deed and performing its obligations pursuant hereto,
                    including the acquisition from Koor of the Shares Being
                    Sold.

         7.7        That on signing this Deed it is the holder of 518,488
                    Ordinary Shares.

         7.8        That subject only to Koor's warranties and representations
                    in Clauses 5 and 6 of this Deed, the Shares Being Sold are
                    being purchased in their actual condition, and the actual
                    condition of the Company and its assets, and they are "As
                    Is", without any other representations or warranties being
                    received from or on behalf of Koor and that the
                    Consideration, as agreed between the parties, has been
                    fixed having regard also to the fact that the purchase is
                    on such an "As Is" basis.

8.       Stage 'A' of the Transaction

         8.1        On the First Closing Date and subject to the fulfilment of
                    Stage 'A' Conditions Precedent by the Stage 'A' Completion
                    Deadline, Koor shall sell and transfer to Elbit, on and
                    against payment of the whole of Stage 'A' Consideration,
                    1,700,000 (one million seven hundred thousand) Ordinary
                    Shares (the Stage 'A' Shares), fully paid and Free and
                    Clear, and Elbit shall purchase and receive from Koor the
                    Stage 'A' Shares and pay Koor the full amount of the Stage
                    'A' Consideration (in this Deed "Stage 'A' of the
                    Transaction").

         8.2        Furthermore, on the First Closing Date, Koor shall purchase
                    from Federmann Enterprises 2,160,000 (two million one
                    hundred and sixty thousand) ordinary shares of 1 NIS par
                    value each of Elbit, which on the date of signing this Deed
                    constitute approximately 5.3% of Elbit's issued share
                    capital, in accordance with the Koor-Federmann Deed, which
                    is being signed contemporaneously with this Deed. The
                    Koor-Federmann Deed Stage 'A' and Stage 'A' of the
                    Transaction shall be performed contemporaneously, and Stage
                    'A' of the Transaction (contemplated by this Deed) shall
                    not be performed without the Koor-Federmann Deed Stage 'A'
                    being performed.


                                     A-12
<PAGE>


         8.3        For the avoidance of doubt, after the performance and
                    completion of Stage 'A' of the Transaction, Stage 'A' of
                    the Transaction will not be revoked, even if Stage 'B' of
                    the Transaction is not performed or completed for any
                    reason.

9.       The Stage 'A' Completion Deadline and the Stage 'A' Conditions
         Precedent

         9.1        In this Deed the "Stage 'A" Completion Deadline" means:

                    9.1.1       31 March 2005;

                    or -

                    9.1.2       If by 31 March 2005 all the Stage 'A'
                                Conditions Precedent have been fulfilled, other
                                than the approval of the [Israel] Commissioner
                                of Restrictive Trade Practices, as set out in
                                Clause (3) of Appendix "9.2", the Stage 'A'
                                Completion Deadline shall be automatically
                                deferred until 31 May 2005 or to such later
                                date as may be fixed by the parties as provided
                                in Clause 20.3 below.

         9.2        The Stage 'A' Conditions Precedent are set out in Appendix
                    "9.2".

         9.3        Should all the Stage 'A' Conditions Precedent not have been
                    fulfilled by the Stage 'A' Completion Deadline, this Deed
                    shall be void - except, if and insofar as Elbit's General
                    Meeting's approval for its entering into the transaction
                    contemplated by this Deed has been obtained, the provisions
                    of Clauses 14.3 (except insofar as concerns the acquisition
                    of Ordinary Shares), 14.5 and 17 hereof, without either of
                    the parties having any complaint and/or claim and/or demand
                    against the other. For the avoidance of doubt, it is
                    clarified that if the Stage 'A' Conditions Precedent have
                    not been fulfilled by the Stage 'A' Completion Deadline,
                    neither of the parties shall be subject to any restriction
                    as regards the acquisition of Ordinary Shares.

                    Nothing in the provisions of this Clause 9.3 above shall be
                    deemed to derogate from any right or other remedy pursuant
                    to this Deed or by law that is available to the parties in
                    respect of a breach of any of the provisions of this Deed
                    (insofar as breached). Without prejudice to the above
                    provisions of this Clause 9.3, it is clarified that no
                    provision of this Deed shall obligate Elbit in any manner
                    whatsoever, prior to obtaining the approval of its General
                    Meeting, to enter into the transactions contemplated by
                    this Deed.

                                     A-13
<PAGE>

10.      The First Closing Date

         Subject to the Stage 'A' Conditions Precedent being fulfilled by the
         Stage 'A' Completion Deadline, the parties shall meet on the First
         Closing Date at such place as determined by the parties and the
         following interdependent acts shall be performed contemporaneously:

         10.1       Elbit shall remit the Stage 'A' Consideration by bank
                    transfer to Koor's bank account at the Bank, the details of
                    which shall be provided to it in writing by Koor by the
                    First Closing Date (in this Deed "Koor's Account") and
                    confirmation from the Bank shall be provided to Koor that
                    the Stage 'A' Consideration has been received in Koor's
                    Account.

         10.2       Koor shall provide Elbit confirmation from the Bank,
                    according to which the Bank agrees that on and against
                    receipt of the Stage 'A' Consideration in Koor's Account,
                    it will discharge the Fixed Lien from the Stage 'A' Shares.

         10.3       Koor shall provide Elbit a letter of instructions from the
                    Bank, in the Bank's standard form, addressed to the
                    Companies Registrar, pursuant to which the Bank applies to
                    the Companies Registrar to amend the Fixed Lien to the
                    effect that the Fixed Lien will be discharged from the
                    Stage 'A' Shares.

         10.4       Koor shall provide Elbit a written certificate from Poalim
                    Trust Services Ltd., in which Poalim Trust Services Ltd.
                    gives instructions to transfer the Stage 'A' Shares from
                    the Trust Account to Elbit's securities account, the
                    details of which shall be provided to Koor by Elbit in
                    writing by the First Closing Date (hereinafter "Elbit's
                    Account").

         10.5       Koor shall provide the Bank an irrevocable instruction to
                    transfer the Stage 'A' Shares, by means of a transaction
                    outside the Stock Exchange, from the Trust Account to
                    Elbit's Account, and confirmation from the Bank that the
                    Stage 'A' Shares have been received in Elbit's Account
                    shall be provided to Elbit.

         10.6       Koor shall provide Elbit a copy of the Company's board of
                    directors' resolution to the effect that, subject to the
                    performance of Stage 'A' of the Transaction, there shall be
                    added to the Company's board of directors and serve thereon
                    as directors such number of nominees as proposed for office
                    by Elbit, who meet the Qualification Conditions, such that
                    after their addition to the board of directors, the number
                    of directors proposed for office by Elbit shall be the
                    greater of:

                                     A-14
<PAGE>

                    (1)         three directors; or

                    (2)         a number of directors equal to 20% of the
                                number of the Company's directors (including
                                external directors and the directors who are
                                added in accordance with Elbit's nomination as
                                aforesaid), rounded up to the nearest whole
                                number (for example, if the number of directors
                                who are serving in the Company immediately
                                after the addition of Elbit's nominees is 11,
                                three nominees who have been proposed by Elbit
                                shall be added as directors).

                    In said board of directors' resolution it shall be provided
                    that Elbit's nominees as aforesaid shall be added to the
                    Company's board of directors on the First Closing Date.

                    Koor undertakes that there shall be sufficient vacancies on
                    the Company's board of directors to enable the addition of
                    Elbit's nominees as aforesaid.

                    If for any reason any of the nominees proposed by Elbit as
                    aforesaid cannot be appointed as a director or directors of
                    the Company, another nominee or nominees, as proposed by
                    Elbit, shall be appointed in his or their place.

                    Elbit shall give prior written notice to Koor and the
                    Company of the name of such nominees as aforesaid or of the
                    other nominees in their place, and Elbit (with the
                    assistance of Koor) shall coordinate with the Company's
                    corporate secretary such nominees' compliance with the
                    Qualification Conditions, all by no later than 14 days
                    prior to the earlier of (1) the Stage 'A' Completion
                    Deadline or (2) the First Closing Date. Without prejudice
                    to the foregoing, if any of the nominees proposed by Elbit
                    as aforesaid is not added to the Company's board of
                    directors on the First Closing Date, Koor shall hold a
                    General Meeting of the Company as soon as possible, the
                    agenda of which shall be the appointment of the nominees
                    proposed by Elbit, who have not been appointed as
                    aforesaid, as directors of the Company. Koor undertakes to
                    vote in favor of the appointment of the nominees proposed
                    by Elbit who have not been appointed as aforesaid but who
                    do meet the Qualification Requirements. If and insofar as
                    it is required by law that a majority of the Company's
                    directors meet any Qualification Requirements, then if the
                    number of directors appointed in accordance with Elbit's
                    nomination is an equal number, one half of the directors
                    appointed in accordance with Elbit's nomination as
                    aforesaid shall meet said conditions, and if the number of
                    directors appointed in accordance with Elbit's nomination
                    is an odd number, the majority of the


                                     A-15
<PAGE>

                    Company's directors who are appointed in accordance with
                    Elbit's nomination as aforesaid shall meet the above
                    conditions.

         10.7       The Shareholders Agreement, in the terms annexed hereto as
                    Appendix "10.7", shall become effective.

         10.8       Koor shall provide Elbit a written declaration, duly signed
                    by Koor, according to which all the warranties and
                    representations of Koor as set out in Clauses 5 and 6 of
                    this Deed are also correct, complete and accurate as of the
                    First Closing Date.

         10.9       Elbit shall provide Koor a written declaration, duly signed
                    by Elbit, according to which all the warranties and
                    representations of Elbit as set out in Clauses 5 and 7 of
                    this Deed are also correct, complete and accurate as of the
                    First Closing Date.

         10.10      The Koor-Federmann Deed Stage 'A' shall be completed,
                    namely all the acts that are to be performed on the
                    Koor-Federmann Deed First Closing Date shall be performed,
                    as provided in Clause 10 of the Koor-Federmann Deed.

         10.11      Each party undertakes to do all the acts for which it is
                    responsible pursuant to this Clause 10.

         10.12      All the acts mentioned above in this Clause 10 shall be
                    deemed as having been performed contemporaneously, no
                    individual act shall be deemed as completed and no
                    individual document shall be deemed as delivered until all
                    such acts have been completed and all the documents have
                    been delivered.

11.      Stage 'B' of the Transaction

         11.1       On the Second Closing Date and subject to the fulfilment of
                    the Stage 'B' Conditions Precedent by the Stage 'B'
                    Completion Deadline, Koor shall sell and transfer to Elbit,
                    on and against payment of the full Stage 'B' Consideration,
                    2,244,276 (two million two hundred forty-four thousand two
                    hundred and seventy-six) Ordinary Shares (the Stage 'B'
                    Shares), fully paid and Free and Clear, and Elbit shall
                    purchase and receive from Koor the Stage 'B' Shares and pay
                    Koor the full amount of the Stage 'B' Consideration
                    (hereinafter in this Deed "Stage 'B' of the Transaction").

         11.2       On the Second Closing Date Koor shall purchase from
                    Federmann Enterprises 1,840,000 (one million eight hundred
                    and forty thousand) ordinary shares of 1 NIS par value each
                    of Elbit, constituting

                                     A-16
<PAGE>

                    approximately 4.51% of Elbit's issued and paid up share
                    capital in accordance with the Koor-Federmann Deed, which
                    is being signed contemporaneously with this Deed, and Stage
                    'B' of the Transaction and the Koor-Federmann Deed Stage
                    'B' shall be performed together, and Stage 'B' of the
                    Transaction (contemplated by this Deed) shall not be
                    performed without the performance of the Koor-Federmann
                    Deed Stage 'B'. Nevertheless, it is agreed that the
                    provisions of this Clause 11.2 shall not apply if Federmann
                    gives notice as provided in Clause 12.1.3 of the
                    Koor-Federmann Deed or as provided in Clause 12.1.5 of the
                    Koor-Federmann Deed, as the case may be.

12.      The Stage 'B' Completion Deadline and the Stage 'B' Conditions
         Precedent

         12.1       In this Deed the "Stage 'B' Completion Deadline" means:

                    12.1.1      30 June 2005; or

                    12.1.2      if all the Stage 'B' Conditions Precedent have
                                not been fulfilled by 30 June 2005, the Stage
                                'B' Completion Deadline shall automatically be
                                deferred until 30 September 2005; or

                    12.1.3      if by 30 September 2005 all the Stage 'B'
                                Conditions Precedent have been fulfilled,
                                except for the completion of the Elisra
                                Transaction as set out in Clause (2) of
                                Appendix "12.2", Koor shall be entitled to
                                provide written notice to Elbit, to be received
                                by Elbit by said date, of the Stage 'B'
                                Completion Deadline's deferral until 30 April
                                2006 or such later date as may be determined by
                                the parties, as provided in Clause 20.3 below.

         12.2       The Stage 'B' Conditions Precedent are set out in Appendix
                    "12.2".

         12.3       Should all the Stage 'B' Conditions Precedent not be
                    fulfilled by the Stage 'B' Completion Deadline, Stage 'B'
                    of the Transaction shall not be performed, the provisions
                    in connection with the performance of Stage 'B' of the
                    Transaction in this Deed shall be deemed null and void and
                    be of no effect and, inter alia, Koor shall not sell Elbit
                    the Stage 'B' Shares and Elbit shall not pay the Stage 'B'
                    Consideration to Koor, and neither party shall have any
                    demand, claim or complaint against the other in connection
                    with Stage 'B' of the Transaction. For the avoidance of
                    doubt, it is clarified that the foregoing provisions of
                    this Clause 12.3 shall not be deemed to derogate from the
                    validity of any other provision, including the provisions
                    of Clauses 14.3 (except insofar as concerns the acquisition
                    of Ordinary Shares) or 14.5 of this Deed or as provided in
                    the Shareholders Agreement, which shall enter into effect
                    on the First Closing Date, or from

                                     A-17
<PAGE>

                    any other right or remedy pursuant to this Deed or by law
                    that is available to the parties in respect of a breach of
                    any of the provisions of this Deed (if and insofar as
                    breached).

         12.4       Should Federmann act as provided in Clause 12.1.3 of the
                    Koor-Federmann Deed or as provided in Clause 12.1.5 of the
                    Koor-Federmann Deed, and should the Stage 'B' Conditions
                    Precedent be fulfilled by the Stage 'B' Completion
                    Deadline, the parties shall perform and Complete Stage 'B'
                    of the Transaction pursuant to this Deed on the Second
                    Closing Date, and the provisions of Clause 11.2 above and
                    Clause 13.9 below shall not apply.

13.      The Second Closing Date

         Subject to the fulfilment of the Stage 'B' Conditions Precedent by the
         Stage 'B' Completion Deadline, the parties shall meet on the Second
         Closing Date at such place as determined by them, and the following
         interdependent acts shall be performed contemporaneously:

         13.1       Elbit shall remit the Stage 'B' Consideration by bank
                    transfer to Koor's Account, and confirmation from the Bank
                    shall be provided to Koor that the Stage 'B' Consideration
                    has been received in Koor's Account.

         13.2       Koor shall provide Elbit confirmation from the Bank,
                    according to which the Bank agrees that on and against
                    receipt of the Stage 'B' Consideration in Koor's Account,
                    it will discharge the Fixed Lien from the Stage 'B' Shares.

         13.3       Koor shall provide Elbit a letter of instructions from the
                    Bank, in the Bank's standard terms, addressed to the
                    Companies Registrar pursuant to which the Bank applies to
                    the Companies Registrar to discharge the Fixed Lien from
                    the Stage 'B' Shares.

         13.4       Koor shall provide Elbit a written certificate from Poalim
                    Trust Services Ltd. in which it provides instructions to
                    transfer the Stage 'B' Shares from the Trust Account to
                    Elbit's Account.

         13.5       Koor shall provide the Bank an irrevocable instruction to
                    transfer the Stage 'B' Shares by means of a transaction
                    outside the Stock Exchange from the Trust Account to
                    Elbit's Account, and confirmation from the Bank that the
                    Stage 'B' Shares have been received in Elbit's Account
                    shall be provided to Elbit.

                                     A-18
<PAGE>

         13.6       Koor shall cause the addition to the Company's board of
                    directors on the Second Closing Date of such number of
                    nominees who are proposed for their office by Elbit and
                    meet the Qualification Requirements so that on the
                    appointment of those nominees to the Company's board of
                    directors those nominees will, together with the directors
                    appointed to their office per Elbit's nomination as
                    provided in Clause 10.6 above, constitute more than 50% of
                    the total directors of the Company at that time, including
                    external directors and directors who are appointed to their
                    position per Elbit's nomination as aforesaid. Without
                    prejudice to the generality of the foregoing, Koor
                    undertakes that there will be sufficient vacancies on the
                    Company's board of directors for the performance of its
                    foregoing obligations.

                    Elbit shall provide Koor and the Company prior written
                    notice of its nominees as aforesaid or of the other
                    nominees in their place as provided below in this Clause,
                    and Elbit shall coordinate with the Company's corporate
                    secretary such nominees' compliance with all the conditions
                    required of the Company's directors, all by no later than
                    14 days from the earlier of (1) the Stage 'B' Completion
                    Deadline or (2) the Second Closing Date. If for any reason
                    any of such nominees as aforesaid cannot be appointed as a
                    director or directors of the Company, another nominee or
                    nominees, as proposed by Elbit, who meet the Qualification
                    Requirements, shall be appointed in his or their place.

         13.7       Koor shall provide Elbit a written declaration duly signed
                    by Koor according to which all Koor's warranties and
                    representations as set out in Clauses 5 and 6 of this Deed
                    are also correct, complete and accurate as of the Second
                    Closing Date.

         13.8       Elbit shall provide Koor a written declaration duly signed
                    by Elbit according to which all Elbit's warranties and
                    representations as set out in Clauses 5 and 7 of this Deed
                    are also correct, complete and accurate as of the Second
                    Closing Date.

         13.9       The Koor-Federmann Deed Stage 'B' shall be completed,
                    namely all the acts that are to be performed on the
                    Koor-Federmann Deed Second Closing Date as provided in
                    Clause 13 of the Koor-Federmann Deed shall be performed.
                    Nevertheless, it is agreed that this Clause 13.9 shall not
                    apply if Federmann acts as provided in Clause 12.1.3 or as
                    provided in Clause 12.1.5 of the Koor-Federmann Deed.

         13.10      Each party undertakes to perform all the acts for which it
                    is responsible pursuant to this Clause 13.

                                     A-19
<PAGE>

         13.11      All the acts mentioned above in this Clause 13 shall be
                    deemed as having been performed contemporaneously, no
                    individual act shall be deemed as having been completed and
                    no individual document shall be construed as delivered
                    until all such acts are completed and all the documents are
                    delivered.

14.      Acts and Obligations after the Signature of this Deed

         14.1       Immediately after the signature of this Deed, the parties
                    shall act and use their best efforts to cause the
                    fulfilment of all the Conditions Precedent, including
                    obtaining all the required certificates, permits and
                    consents, as early as possible. In such connection and
                    without derogating from the generality of the foregoing,
                    the parties shall apply to every competent authority and to
                    every other entity whose approval is necessary for the
                    performance of the transaction involved in this Deed, in
                    both its stages, they shall submit all the applications and
                    deliver all the information, data and particulars in their
                    possession, without delay, and act to resolve or avoid a
                    disapproval, if any, by the various government authorities
                    in any respect relating to or arising out of this Deed.

         14.2       It is hereby agreed that the provisions of this Deed are
                    not such as to place either of the parties under a duty to
                    make any payment for the fulfilment of the Conditions
                    Precedent or any of them, other than official fees and
                    other reasonable expenses (such payment as aforesaid,
                    excluding official fees and other reasonable expenses as
                    aforesaid, a "Fulfilment Payment"), provided that if a
                    party to this Deed refuses to make a Fulfilment Payment,
                    the other party may make it for the fulfilment of all or
                    any of the Conditions Precedent, provided that the first
                    party shall not be liable to indemnify the other party in
                    respect of a Fulfilment Payment, and the party that makes
                    the Fulfilment Payment shall have no demand, claim or right
                    of recourse against the other party in respect of the
                    making of such payment.

         14.3       Subject to the provisions of Clause 9.3 above and Clause
                    14.4 below, from the date of signing this Deed until 30
                    April 2006 (the "Lock-up Period"), Koor and Elbit shall not
                    conduct any transaction (including any transfer, sale or
                    acquisition) in Ordinary Shares, either on or outside the
                    Stock Exchange, unless otherwise agreed between the
                    parties, by written notice signed by two officers of each
                    of Koor and Elbit, without any further approval being
                    necessary. Said obligation shall continue in force even if
                    this Deed is cancelled for any reason, save for rescission
                    due to its breach by Koor and except if Elbit exercises its
                    right to rescind the Deed pursuant to the provisions of
                    Clause 16.1 below.

                                     A-20
<PAGE>

         14.4       Notwithstanding as provided in Clause 14.3 above, during
                    the Lock-up Period each party may purchase, either on or
                    outside the Stock Exchange, up to 350,000 Ordinary Shares
                    (the "Acquirable Quantity") without the other party's
                    consent, provided that it gives written notice to the other
                    party of the purchase of the shares and the quantity of
                    shares purchased within 48 hours of making each purchase.
                    Should one party purchase 350,000 Ordinary Shares (in this
                    Clause the "Purchasing Party") and the other party not
                    purchase 350,000 Ordinary Shares, the Purchasing Party may
                    send written notice to the other party (in this Clause the
                    "Purchase Notice") stating that it wishes to purchase
                    additional shares of the Company in a quantity not
                    exceeding the difference between 350,000 Ordinary Shares
                    and the quantity of shares purchased under this Clause by
                    the other party (in this Clause the "Acquirable Shares").
                    Should 14 days elapse from the date of providing the
                    Purchase Notice (in this Clause the "Other Party's Purchase
                    Period") and the other party not have purchased all the
                    Acquirable Shares in trading on the Stock Exchange, the
                    Purchasing Party may purchase the Acquirable Shares in
                    trading on the Stock Exchange within 14 days of the end of
                    the other party's Purchase Period. Should the Purchasing
                    Party not purchase the Acquirable Shares during said
                    period, it shall be responsible to provide the other party
                    Purchase Notice in order to purchase additional shares.

         14.5       Subject to the provisions in Clause 9.3 above, Elbit shall
                    vote in the Company's General Meeting by virtue of all the
                    Shares in the Company that are held by it at that time in
                    favor of approving the Elisra Transaction, whether or not
                    all or any of the transactions involved in this Deed are
                    actually implemented, provided that: (a) the Elisra
                    Transaction consideration is established in reliance on an
                    evaluation by an outside independent appraiser obtained for
                    the purpose of the Elisra Transaction, and the
                    consideration and terms and conditions of the Elisra
                    Transaction have been duly approved by the Company's audit
                    committee and board of directors and by every independent
                    committee of the Company that is established for the
                    purpose of considering the Elisra Transaction, insofar as
                    established, and the Company's audit committee and board of
                    directors have determined that the Elisra Transaction is
                    not contrary to the Company's interests; (b) the
                    consideration for the Elisra Transaction, as payable by the
                    Company, reflects a company value for Elisra of up to
                    US$225 million; and (c) the Elisra Transaction has been
                    referred to the Company's General Meeting for a vote by 30
                    April 2006. Elbit's said obligation shall expire on the
                    earlier of: (1) 1 May 2006, or (2) the completion of the
                    Elisra Transaction, or (3) on the rescission of this Deed
                    due to its breach by Koor, whichever is earlier.

                                     A-21
<PAGE>

         14.6       Without prejudice to Clauses 15 and 16 below, Koor hereby
                    undertakes that from the date of the signature of this Deed
                    until the earlier of: (1) the Stage 'A' Completion
                    Deadline, if the Stage 'A' Conditions Precedent have not
                    been fulfilled by that time; or (2) the Stage 'B'
                    Completion Deadline, if the Stage 'B' Conditions Precedent
                    have not been fulfilled by that time; or (3) the Second
                    Closing Date, Koor and/or its subsidiaries and/or the
                    controlling shareholders and/or officers of Koor and/or
                    companies under the control of any of them shall not enter
                    into an extraordinary transaction with the Company, in
                    which any of them has a personal interest, except for the
                    Elisra Transaction.

         14.7       From the date of obtaining Elbit's General Meeting's
                    approval of its entering into the transaction contemplated
                    by this Deed until the Second Closing Date, Koor's
                    president shall from time to time, in his discretion,
                    update Elbit's president regarding the status of the
                    Company's business, all subject to applicable legal
                    requirements (including antitrust laws).

         14.8       Subject to applicable law and except for the purpose
                    mentioned in Clause 3.4.3 of the Shareholders Agreement,
                    Koor, as a shareholder of the Company, undertakes that
                    after the Company's annual General Meeting that is held
                    after the date of signing this Deed, it will not act to
                    hold an annual General Meeting of the Company before the
                    Stage 'B' Completion Deadline, unless Elbit consents
                    thereto by written notice signed by two officers of Elbit,
                    without any further approval being necessary.

15.      Modifications to the Consideration or the Number of Shares Being Sold

         15.1       During the period from the date of signing this Deed until
                    the earlier of: (1) the Stage 'A' Completion Deadline, if
                    the Stage 'A' Conditions Precedent have not been fulfilled
                    by that time; (2) the Stage 'B' Completion Deadline, if the
                    Stage 'B' Conditions Precedent have not been fulfilled by
                    that time; or (3) the Second Closing Date; Koor shall,
                    insofar as it is able, oppose and vote by virtue of all the
                    Company's Shares that it holds at that time against any
                    resolution, except - for the purpose of sub-clauses (c),
                    (e) and (f) - a resolution with regard to the Elisra
                    Transaction, which concerns: (a) the making of any
                    distribution whatsoever, whether in cash or in kind, or by
                    a distribution of bonus shares, to the Company's
                    shareholders, except from the distribution of a regular
                    cash dividend of not more than 1.5 NIS per Ordinary Share
                    in any calendar quarter; (b) a rights offering for the
                    acquisition of any securities of the Company; (c) a sale of
                    the Company's shares that are held by the Company or its
                    subsidiaries; (d) any modification to the Company's
                    incorporation documents, except for the purpose of
                    increasing the Company's authorized share capital; (e)
                    transactions that are not in the ordinary course of the
                    Company's business


                                     A-22
<PAGE>

                    and transactions that concern an investment or acquisition
                    of rights in entities and/or the acquisition of businesses
                    (Asset Transactions) (in this Deed the "New Transactions"),
                    the aggregate financial amount of which exceeds
                    $25,000,000, excluding the Elisra Transaction; (f) any
                    allotment of the Company's securities except for an
                    allotment of shares deriving from the exercise of options
                    existing at the time of signing this Deed and, without
                    derogating from the provisions of Clause 14.5 above, except
                    for an allotment of options to employees of the Company or
                    its subsidiaries in a proportion not exceeding 2% of the
                    Company's issued share capital and on the Company's
                    customary terms, all unless Elbit's consent thereto is
                    provided by written notice to be signed by two officers of
                    Elbit, without any further approval being necessary.

         15.2       Insofar as during the period from the date of signing this
                    Deed until the First Closing Date or until the Second
                    Closing Date, as the case may be, one or more of the
                    below-mentioned events occurs, despite or in accordance
                    with the provisions of Clause 15.1 above, the Consideration
                    or number of the Shares Being Sold, as the case may be,
                    shall be adjusted in accordance with the following
                    provisions:

                    15.2.1      If the Company resolves to make any
                                distribution to its shareholders, the
                                Consideration shall be subject to the deduction
                                of any amount (translated into dollars at the
                                representative exchange rate on the earlier of
                                the date of actually making the distribution or
                                the First Closing Date or the Second Closing
                                Date, as the case may be) that Koor will be
                                entitled to receive in respect of the Shares
                                Being Sold (gross) (namely the record date for
                                its distribution is prior to the First Closing
                                Date or the Second Closing Date, as the case
                                may be).

                    15.2.2      If the Company offers its shareholders rights
                                for the acquisition of any securities, the
                                record date for the exercise of which is prior
                                to the First Closing Date or the Second Closing
                                Date, as the case may be, the amount of the
                                Consideration shall be adjusted for the bonus
                                element embodied (if at all) in the rights,
                                unless Elbit instructs Koor in writing prior to
                                the exercise date in respect of those rights to
                                exercise the rights and in such event Koor
                                shall exercise the rights by virtue of the
                                Shares Being Sold which have not yet been
                                transferred to Elbit as of that time and it
                                shall transfer to Elbit, immediately on the
                                occurrence of the earlier of (1) the exercise
                                date or (2) the First Closing Date, or after
                                the Second Closing Date, as the case may be,
                                the securities exercised as aforesaid on and
                                against payment of the entire exercise amount
                                paid by Koor to the Company for the exercise


                                     A-23
<PAGE>

                                thereof, plus Interest from the date of Koor's
                                paying the exercise price to the date of actual
                                payment to Koor by Elbit.

                    15.2.3      If the Company distributes bonus shares or
                                dividends in kind to its shareholders before
                                the First Closing Date or the Second Closing
                                Date, as the case may be, the Consideration
                                shall not be adjusted but the Shares Being Sold
                                shall be subject to the addition of the bonus
                                shares, Free and Clear, or of assets received
                                as dividends in kind (gross) in respect of the
                                Shares Being Sold, Free and Clear, without
                                Elbit being required to pay additional
                                consideration for them.

                    15.2.4      If the Company makes a consolidation, reduction
                                or sub-division of its share capital or does
                                any other act of similar effect, the Stage 'A'
                                Consideration and/or the Stage 'B'
                                Consideration, as the case may be, shall be
                                adjusted and the number of Shares Being Sold
                                shall also be adjusted pro rata to the
                                consolidation or sub-division.

16.      Elbit's Right to Rescind the Deed

         16.1       On the occurrence of one or more of the events set out in
                    Clause 16.2 below, unless it occurs with Elbit's consent,
                    Elbit may rescind this Deed or any of its stages before it
                    has been completed and performed (provided that if one of
                    the events set out in Clause 16.2 below occurs before the
                    performance of Stage 'A' of the Transaction, Elbit may only
                    rescind this Deed in full). Such rescission shall be
                    effected by Elbit by written notice, to be received by Koor
                    within 10 Business Days of the date on which Elbit learns
                    of the occurrence of one of the events set out in Clause
                    16.2 below. Should Elbit provide such notice of the
                    rescission of this Deed after the completion of Stage 'A'
                    of the Transaction, the sale of the Stage 'A' Shares to
                    Elbit shall not be rescinded, Elbit shall not return to
                    Koor the Stage 'A' Shares and Koor shall not refund to
                    Elbit the Stage 'A' Consideration, and nevertheless, all
                    the parties' other obligations and rights pursuant to this
                    Deed and the Appendices hereto, except for the Shareholders
                    Agreement and the provision of Clause 14.5 above, shall be
                    void. For the avoidance of doubt, it is clarified that
                    after Elbit has given notice in accordance with this Clause
                    16.1, Elbit may sell Ordinary Shares held by it or purchase
                    Ordinary Shares without any restriction.

                                     A-24
<PAGE>

         16.2       The events are as follows:

                    16.2.1      If a receiver or temporary receiver and/or
                                temporary liquidator and/or liquidator and/or
                                trustee is appointed for the Company and/or if
                                a winding-up order and/or receivership order
                                and/or suspension of proceedings order is
                                awarded against it and/or if any of the
                                Company's material assets is attached, provided
                                that such appointment, order or attachment is
                                not set aside within 30 days.

                    16.2.2      If the Company enters into merger proceedings
                                as provided in Chapter Eight of the Companies
                                Law or compromise or arrangement proceedings in
                                accordance with Section 350 of the Companies
                                Law or restructuring and/or merger proceedings
                                in accordance with Section 351 of the Companies
                                Law.

                    16.2.3      If any alteration is made to the Company's
                                incorporation documents, except for the purpose
                                of increasing the Company's authorized share
                                capital.

                    16.2.4      If the Company makes a private placement that
                                vests a right to more than 1,500,000 Ordinary
                                Shares, except for an issuance of shares
                                deriving from the exercise of options existing
                                on the date of signing this Deed and except for
                                an issuance of options to employees of the
                                Company and its subsidiaries in a amount of not
                                more than 2% of the Company's issued and paid
                                up share capital as customary in the Company,
                                at an exercise price per share that is not
                                materially less than the market price.

                    16.2.5      If the Company enters into New Transactions, as
                                defined in Clause 15.1 above, insofar as their
                                aggregate amount exceeds US$35 million, except
                                for the Elisra Transaction.

                    16.2.6      If the Company makes a distribution, either in
                                cash or in kind (except for a distribution of
                                bonus shares or rights offering) in an
                                aggregate amount exceeding 2.5 NIS per share in
                                any calendar quarter commencing on 1 January
                                2005.

                    16.2.7      If the Elisra Transaction has been completed
                                for consideration that has been paid by the
                                Company and reflects a company value for Elisra
                                in excess of US$225 million.

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<PAGE>

         16.3       Koor shall provide Elbit written notice immediately on the
                    occurrence of any of the events set out in Clause 16.2
                    above, all in accordance with applicable legal
                    requirements.

17.      Confidentiality and Notices

         17.1       The parties shall use Confidential Information that comes
                    into their possession in connection with this Deed and the
                    Company solely for the performance of their obligations
                    pursuant to this Deed, and they shall not disclose or
                    transfer in any manner whatsoever Confidential Information
                    to any third party, other than to their employees or
                    independent advisors and except insofar as required for the
                    fulfilment of the Conditions Precedent and insofar as
                    possible by prior coordination with the other party.
                    Without derogating from the foregoing, if the transaction
                    contemplated by this Deed is not actually implemented, each
                    party shall return to the other party hereto all
                    Confidential Information that has come into its possession
                    in connection with this Deed, if any. This obligation is
                    not limited in time and shall continue in force even after
                    the end of the term of this Deed or if this Deed is
                    annulled or rescinded for any reason.

         17.2       If and insofar as possible, and subject to applicable legal
                    requirements and to the time periods mandated by law, the
                    parties shall coordinate in advance the wording of every
                    report, application, communication or notice published by
                    either of them in connection with their entering into this
                    Deed, its performance and the fulfilment of the conditions
                    pursuant hereto.

18.      Taxes and Mandatory Payments

         18.1       Unless otherwise provided in this Deed, each party shall
                    bear the mandatory payments and taxes that may be imposed
                    on it by law (if and insofar as charged) in respect of the
                    sale or acquisition of the Shares Being Sold pursuant to
                    this Deed.

         18.2       If any amount payable in accordance with the provisions of
                    this Deed is subject to a duty to withhold tax at source,
                    tax shall be duly withheld by the paying party unless the
                    party receiving the payment produces a valid tax
                    withholding exemption certificate issued by the tax
                    authorities.

         18.3       Each party shall bear its own expenses, including the
                    professional fees of its legal advisers in connection with
                    the preparation and performance of this Deed.

         18.4       If any amount paid by one party to the other in accordance
                    with the provisions of this Deed is subject under
                    applicable law to value added tax

                                     A-26
<PAGE>

                    (VAT), the paying party shall, at the same time and in the
                    same manner as it pays that amount, also pay the VAT at its
                    legal rate on and against a duly issued tax invoice.

19.      Entry into Effect

         19.1       This Deed shall enter into effect upon the receipt of all
                    the following approvals:

                    19.1.1      Approval of Koor's board of directors for Koor
                                to enter into this Deed and the Shareholders
                                Agreement and for performance thereof by Koor
                                in accordance with their terms and conditions,
                                including ratification of the signatures of
                                Messrs. Jonathan Kolber and Danny Biran to this
                                Deed and the Shareholders Agreement.

                    19.2.1      Approval of Elbit's audit committee and board
                                of directors for Elbit to enter into this Deed
                                and the Shareholders Agreement and for
                                performance thereof by Elbit in accordance with
                                their terms and conditions, including
                                ratification of the signatures of Messrs.
                                Joseph Ackerman and Joseph Gaspar to this Deed
                                and the Shareholders Agreement.

                    Provided that:

                    (1)         such approvals as mentioned in Clauses 19.1.1
                                and 19.1.2 have been obtained by no later than
                                January 6, 2005 by 17:00 (in this Clause the
                                "Effective Date");

                    (2)         by the Effective Date, a copy of Koor's board
                                of directors' resolution, as mentioned in
                                Clause 19.1.1 above, has been received at
                                Elbit's offices together with written
                                confirmation from Koor's legal counsel that the
                                said resolutions were duly adopted and Messrs.
                                Jonathan Kolber and Danny Biran were empowered
                                jointly to sign, on behalf of Koor, this Deed
                                and the documents ancillary hereto or those
                                necessary for the purpose of its performance,
                                and also the Shareholders Agreement, and to
                                obligate Koor thereunder;

                    (3)         by the Effective Date, copies of the
                                resolutions of Elbit's audit committee and
                                board of directors, as mentioned in Clause
                                19.1.2 above, have been received at Koor's
                                offices, together with written confirmation
                                from Elbit's attorneys that the resolutions
                                were duly adopted and Messrs. Joseph Ackerman
                                and Joseph

                                     A-27
<PAGE>

                    Gaspar were empowered jointly to sign, on Elbit's behalf,
                    this Deed and the documents ancillary hereto or those
                    necessary for the purpose of its performance and also the
                    Shareholders Agreement and to obligate Elbit thereunder,
                    subject to the approval of Elbit's General Meeting; and

                    (4)         all the approvals, as mentioned in Clause 19.1
                                of the Federmann-Koor  Deed, have been obtained
                                by the Effective Date.

         19.2       Should all the approvals as mentioned in Clauses 19.1.1 and
                    19.1.2 not have been obtained by the Effective Date, and
                    without derogating from the provisions of Clause 20.3
                    below, this Deed shall automatically expire and be null and
                    void, without either of the parties having any complaint,
                    claim or demand against the other.

         19.3       This Deed shall become effective, if and insofar as it
                    becomes effective, at such time as mentioned in Clause 19.1
                    above, nevertheless:

                    19.3.1      none of the provisions of this Deed shall
                                obligate Elbit in any way until Elbit's General
                                Meeting duly approves its entering into the
                                transaction contemplated by this Deed; and

                    19.3.2      the performance and completion of Stage 'A' of
                                the Transaction are conditioned upon the
                                fulfilment of all the Stage 'A' Conditions
                                Precedent by the Stage 'A' Completion Deadline
                                and, apart from the obligations in Clauses 14
                                to 18 above and Clause 20.8 below, neither
                                party shall be liable to do any act for the
                                performance and completion of Stage 'A' of the
                                Transaction before the fulfilment of all the
                                Stage 'A' Conditions Precedent; and

                    19.3.3      the performance and completion of Stage 'B' of
                                the Transaction are conditional upon the
                                fulfilment of all the Stage 'B' Conditions
                                Precedent by the Stage 'B' Completion Deadline
                                and, apart from the obligations in Clauses 14
                                to 18 above and Clause 20.8 below, neither
                                party shall be liable to do any act for the
                                performance and completion of Stage 'B' of the
                                Transaction before the fulfilment of all the
                                Stage 'B' Conditions Precedent.

                                     A-28
<PAGE>

20.      Miscellaneous

         20.1       This Deed shall be governed by the laws of the State of
                    Israel. Sole and exclusive jurisdiction in all respects
                    relating to this Deed shall be vested only in the courts of
                    the District Court in the City of Tel Aviv-Jaffa, and no
                    other court shall have jurisdiction thereover.

         20.2       Any modification, addendum or addition, waiver, extension,
                    concession or failure to exercise a right pursuant to this
                    Deed shall only be effective if done in an express document
                    signed by all the parties hereto and shall only apply to
                    the case specified in such document and shall not derogate
                    from other rights of any party pursuant to this Deed.

         20.3       The parties hereto may extend or reduce any time specified
                    in this Deed and waive the performance of any of the
                    provisions of this Deed, either once or several times, by
                    written notice signed by two officers of each of Koor and
                    Elbit, without any further authority being necessary.

         20.4       This Deed fully contains, embodies, merges, expresses and
                    exhausts all the understandings of the parties hereto
                    solely in respect of the matters mentioned herein. Any
                    promises, guarantees or agreements, whether written or
                    oral, undertakings or representations concerning the
                    subject matter of this Deed given or made by the parties
                    prior to entering into this Deed, orally or in writing,
                    that are not specifically expressed herein, shall not be
                    deemed to augment the rights and obligations prescribed in
                    this Deed or to derogate from or modify them, and the
                    parties shall not be bound by them, insofar as they were
                    bound, as from the date of this Deed. Without derogating
                    from the generality of the foregoing, the documents
                    exchanged between the parties prior to the signature
                    hereof, including the drafts exchanged between them, shall
                    have no significance in the interpretation of this Deed.
                    For the avoidance of doubt, the terms of the Koor-Federmann
                    Deed shall not be applied in the interpretation of this
                    Deed.

         20.5       No conduct by either of the parties shall be construed as a
                    waiver of any of its rights pursuant hereto or by law or as
                    a waiver on its behalf of or acquiescence in any breach or
                    non-performance of a condition of the Deed by the other
                    party or as granting a postponement or extension or as a
                    modification, cancellation or addition of any condition,
                    unless done expressly and in writing.

         20.6       Unless otherwise expressly provided in this Deed, the
                    parties hereto may not assign or transfer their rights or
                    obligations pursuant to this Deed to any third party or
                    perform this deed through any third party, unless the


                                     A-29
<PAGE>

                    other party's prior written consent has been obtained, and
                    nothing in this Deed shall be deemed to vest any right in
                    anyone who is not a party hereto.

         20.7       Should either of the parties not enforce or delay in
                    enforcing any of the rights vested in it pursuant to this
                    Deed or by law in a particular case or series of cases,
                    such shall not be deemed a waiver of said right or of any
                    other rights.

         20.8       Subject in the provisions of Clause 14.2 above in
                    connection with the Conditions Precedent, the parties shall
                    cooperate between them in the implementation of the
                    provisions of this Deed, and they shall assist each other
                    insofar as reasonable and necessary, and in such connection
                    they shall sign every reasonable document, application and
                    approval necessary for such purpose.

         20.9       Notices pursuant to this Deed shall be given in writing to
                    the parties' addresses as set out in the heading hereto or
                    to such other addresses of which the parties may give
                    notice in accordance with the provisions of this Clause.
                    Any notice sent by one party to the other by registered
                    mail shall be deemed to have reached the addressee
                    following the passage of three days from the date of being
                    posted, and notice delivered in person by 17:00 hours on
                    any Business Day shall be treated as received on delivery,
                    or if delivered after 17:00 hours on any Business Day, then
                    on the first Business Day after its delivery.


IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT:

  (signed)                                      (signed)
----------------------------                ----------------------------------
KOOR INDUSTRIES LTD.                        ELBIT SYSTEMS LTD.


By: Jonathan Kolber                         By: Joseph Ackerman

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

By: Danny Biran                             By: Joseph Gaspar
----------------------------                ----------------------------------


                                     A-30
<PAGE>

                                                                 Appendix 9.2


The Conditions Precedent for the Performance of Stage 'A' of the Transaction

Set out below are the Conditions Precedent and approvals required, insofar as
necessary, for the Completion of Stage 'A' of the Transaction contemplated by
the Deed of which this Appendix is an integral part ("this Deed"):

(1)      Obtaining all the consents and approvals necessary and the fulfilment
         of all the Koor-Federmann Deed Stage 'A' Conditions Precedent, as set
         out in the Koor - Federmann Deed,

(2)      Obtaining approval from Elbit's General Meeting for Elbit's entering
         into this Deed, in both its stages, as required by law and after the
         transaction contemplated by the Koor-Federmann Deed has also been
         presented to Elbit's General Meeting, and also written confirmation
         from Elbit's attorneys that such approval has been duly obtained.

(3)      Insofar as necessary, obtaining the [Israel] Commissioner of
         Restrictive Trade Practices' approval, after the entire framework of
         the transaction contemplated by this Deed has been provided to him,
         for the parties' to enter into this Deed and perform Stage 'A' of the
         Transaction, provided that the said authority's disapproval of Stage
         'B' of the Transaction is not received.

(4)      Insofar as necessary, obtaining approval from the antitrust authority
         in the United States and/or Europe, after the entire framework of the
         Transaction contemplated by this Deed has been provided to it, for the
         parties' to enter into this Deed and to perform Stage 'A' of the
         Transaction, provided that the disapproval of any such authorities as
         aforesaid to approve Stage 'B' of the Transaction is not received.

(5)      Obtaining approval from the [Israel] Ministry of Defense for the
         parties' to enter into this Deed and perform the transaction
         contemplated by this Deed, insofar as required.

(6)      Obtaining approval from the [Israel] Investment Center and/or the
         [Israel] Chief Scientist in respect of the terms and conditions of
         grants or benefits that the Company has obtained, for the performance
         of Stage 'A' of the Transaction contemplated by this Deed, insofar as
         required.

(7)      Obtaining approvals from Bank Hapoalim B.M., Bank Leumi Le-Israel
         B.M., United Mizrahi Bank Ltd., Israel Discount Bank Ltd., BNP Paribas
         or other banks or financial institutions for the performance of Stage
         'A' of the Transaction contemplated by this Deed, insofar as required.

                                     A-31
<PAGE>

In this Appendix 9.2, "approval" means - including an approval that is subject
to conditions but excluding an approval that is subject to conditions that are
such as to materially alter the business activity of Elbit and/or the Company,
as existing at the time of signing this Deed or that may arise in the future,
in accordance with resolutions that have been passed by Elbit and/or the
Company, as the case may be, prior to signing this Deed, or the way in which
Elbit and/or the Company conducts its business.



                                     A-32
<PAGE>

                                                                 Appendix 12.2

The Conditions Precedent for the Performance of Stage 'B' of the Transaction

Set out below are the Conditions Precedent and approvals required, insofar as
necessary, for the completion of Stage 'B' of the Transaction contemplated by
the Deed of which this Appendix is an integral part ("this Deed"):

(1)      The completion of Stage 'A' of the Transaction contemplated by this
         Deed.

(2)      The completion of the Elisra Transaction.

(3)      Obtaining all the consents and approvals necessary and the fulfilment
         of all the Koor-Federmann Deed Stage 'B' Conditions Precedent, as set
         out in the Koor-Federmann Deed. Nevertheless, this condition will not
         apply if Federmann gives notice as set out in Clause 12.1.3 of the
         Koor-Federmann Deed or in Clause 12.1.5 of the Koor - Federmann Deed.

(4)      Insofar as necessary, obtaining the [Israel] Commissioner of
         Restrictive Trade Practices' approval of the parties' to enter into to
         this Deed and perform Stage 'B' of the Transaction contemplated by
         this Deed, insofar as such approval is not given in Stage 'A' of the
         Transaction.

(5)      Insofar as necessary, obtaining approval from the antitrust authority
         in the United States and/or Europe of the parties' to enter into this
         Deed and the performance of Stage 'B' of the Transaction contemplated
         by this Deed, insofar as said authority's approval is not given in
         Stage 'A' of the Transaction.

(6)      Obtaining approval from the [Israel] Investment Center and/or the
         [Israel] Chief Scientist in respect of the terms and conditions of
         grants or benefits that the Company has obtained, for the performance
         of Stage 'B' of the Transaction contemplated by this Deed, insofar as
         required.

(7)      Obtaining approvals from Bank Hapoalim B.M., Bank Leumi Le-Israel
         B.M., United Mizrahi Bank Ltd., Israel Discount Bank Ltd., BNP Paribas
         or other banks or financial institutions to enter into in Stage 'B' of
         the Transaction contemplated by this Deed, insofar as required.

In this Appendix 12.2, "approval" means - including an approval that is subject
to conditions but excluding an approval that is subject to conditions that are
such as to materially alter the business activity of Elbit and/or the Company,
as existing at the time of signing this Deed or that may arise in the future,
in accordance with resolutions that have been passed by Elbit and/or the
Company, as the case may be, prior to signing this Deed, or the way in which
Elbit and/or the Company conducts its business.


                                     A-33
<PAGE>
</TEXT>
</DOCUMENT>
