<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>koorsc13dexhibitb.txt
<DESCRIPTION>EXH. B. - SHARE TRANSFER DEED - FEDERMANN
<TEXT>

                                                                    Exhibit B


                              SHARE TRANSFER DEED


                                    BETWEEN


                           FEDERMANN ENTERPRISES LTD.


                                      AND


                              KOOR INDUSTRIES LTD.


                                      B-1
<PAGE>


                     [TRANSLATED FROM THE HEBREW ORIGINAL]


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

                Made in Tel Aviv this 27th day of December 2004


                                    BETWEEN


                           FEDERMANN ENTERPRISES LTD.
                       (Public Company No. 51 - 227839-1)
                        of 99 Hayarkon Street, Tel Aviv
                                 ("Federmann")

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


                                      AND

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


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


                          (hereinafter the "Parties")


WHEREAS                    Federmann is the holder of 19,915,448 Ordinary
                           Shares of the issued and paid up share capital of
                           Elbit Systems Ltd., a public company duly
                           incorporated in Israel, whose number with the
                           Companies Registrar is Public Company No.
                           52-004302-7 (hereinafter the "Company");

AND WHEREAS                Federmann wishes to sell and transfer to Koor, in
                           two stages, 4,000,000 (four million) Ordinary
                           Shares, which on the date of signing this Deed
                           constitute approximately 9.8% of the Company's
                           issued and paid-up share capital, while in the first
                           stage Federmann will sell and transfer to Koor
                           2,160,000 (two million one hundred and sixty
                           thousand) Ordinary Shares, which

                                      B-2
<PAGE>

                           on the date of signing this Deed constitute
                           approximately 5.3% of the Company's issued and
                           paid-up share capital, and in the second stage
                           Federmann will sell and transfer to Koor 1,840,000
                           (one million eight hundred and forty thousand)
                           Ordinary Shares, which on the date of signing this
                           Deed constitute approximately 4.5% of the Company's
                           issued and paid-up share capital, subject to and in
                           accordance with the provisions of this Deed;

AND WHEREAS                Koor wishes to purchase and receive from Federmann
                           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 Conditions Precedent as provided below
                           in this Deed;

AND WHEREAS                The Parties wish to set forth their relationship
                           with respect to the sale and purchase of the Shares
                           Being Sold in the context of this Deed;

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 sell to the Company shares of Tadiran
                           Communications, as set out in the Elbit-Koor Deed
                           and this Deed.


NOW, THEREFORE, IT IS WARRANTED, PROVIDED AND AGREED BETWEEN THE PARTIES AS
FOLLOWS:

1.       Preamble, Appendices and Interpretation
         ---------------------------------------

         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.

2.       Definitions

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

                    "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;

                                      B-3
<PAGE>

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

                    "Company" means as defined in the preamble hereto;

                    "Shareholders Agreement" means the Agreement between
                    Federmann and Koor in the form of Appendix "10.7" hereto,
                    which is to be signed on the signature of this Deed and
                    will enter into effect on the First Closing Date;

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

                    "Stage 'B' Conditions Precedent" means the Conditions
                    Precedent for Stage 'B' of the Transaction, as provided 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;

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

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

                    "Second Closing Date" means the third Business Day after
                    the date on which all the Stage 'B' Conditions Precedent
                    have been fulfilled or in the event that the Stage 'B'
                    Conditions Precedent are deemed wholly fulfilled in
                    accordance with the provisions of Clause 12.4 or 12.5
                    below, as the case may be, the 14th Business Day after 30th
                    June 2005 or after the date of receiving Koor's notice
                    pursuant to Clause 12.5, as the case may be, or such later
                    date as agreed by the Parties, as provided in Clause 20.3
                    below;

                                      B-4
<PAGE>

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

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

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

                    "Stage 'A' Shares" mean 2,160,000 (two million one hundred
                    and sixty thousand) Ordinary Shares;

                    "Stage 'B' Shares" mean 1,840,000 (one million eight
                    hundred and forty thousand) Ordinary Shares;

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

                    "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 further or other third party right whatsoever, other
                    than restrictions with respect to the transfer and/or
                    negotiability of shares that are imposed pursuant to U.S.
                    securities law (shares which are not registered under U.S.
                    securities laws);

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

                    "Federmann" means as defined in the preamble to this Deed;

                                      B-5
<PAGE>

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

                    "Elbit-Koor Deed" means the Share Transfer Deed together
                    with all the appendices thereto made between the Company
                    and Koor on the signature of this Deed, subject to and in
                    accordance with the conditions of which Koor will sell and
                    transfer to the Company, in two stages, 3,944,276 (three
                    million nine hundred forty-four thousand two hundred and
                    seventy-six) Ordinary Shares of 1 NIS par value each of
                    Tadiran Communications, which on the date of signing this
                    Deed constitute approximately 32% of Tadiran
                    Communication'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;

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

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

                    "Tadiran Communications" means Tadiran Communications Ltd.
                    (Private [sic] Company No. 51-207441-0);

                    "Stage 'A' Consideration" means US$24.70 (twenty-four U.S.
                    dollars and seventy cents) for each of the Stage 'A'
                    Shares, totaling US$53,352,000 (fifty-three million three
                    hundred and fifty-two thousand U.S. dollars), and insofar
                    as all or part of that amount is actually paid after April
                    1, 2005, such amount as aforesaid shall be subject to the
                    addition of the Interest from April 1, 2005 until the time
                    of actual payment, all subject to the adjustments as
                    provided in Clause 15 below;

                    "Stage 'B' Consideration" means US$24.70 (twenty-four U.S.
                    dollars and seventy cents) for each of the Stage 'B'
                    Shares, totaling US$- 45,448,000 (forty-five million four
                    hundred and forty-eight


                                      B-6
<PAGE>

                    thousand U.S. dollars), and insofar as all or part of that
                    amount is actually paid after April 1, 2005, such amount as
                    aforesaid shall be subject to the addition of the Interest
                    from April 1, 2005 until the time of actual payment, all
                    subject to the adjustments as provided 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, but
                    excluding the conditions for an Independent Director;

                    "Independent Director" means a director who meets the
                    independence criteria in accordance with U.S. securities
                    law, including the Sarbanes-Oxley Act and the rules and
                    regulations that have been and are in future issued by
                    virtue thereof, including rules of the Nasdaq.

         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", the "Companies Registrar" and "share
                    certificate".

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;

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

                                      B-7
<PAGE>

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

4.       The Elbit-Koor Deed

         Contemporaneously with the signing of this Deed, the Elbit-Koor Deed
         is also being signed. The Elbit-Koor 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 the Company is not
         a Party to this Deed, and the provisions of the Elbit-Koor Deed do not
         impose any duty on Koor to Federmann or on Federmann to Koor that is
         not expressly provided in this Deed.

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 provided in this Clause 5 and in Clauses
                    6 and 7 below, as the case may be.

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

6.       Federmann's Warranties and Undertakings

         Federmann hereby warrants and undertakes to Koor as follows:

         6.1        That it is a duly incorporated private 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 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
                    Lien, as will be modified, amended as provided in Clause
                    10.4 below), that it will not grant any person or entity an
                    option or right to purchase all or any of 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


                                      B-8
<PAGE>

                    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 it holds 19,915,448 Ordinary
                    Shares.

         6.3        That the Shares Being Sold are fully paid and Free and
                    Clear, except for a first ranking fixed lien and an
                    assignment by way of charge, of unlimited amount, which are
                    registered in favor of Bank Leumi Le-Israel B.M. (in this
                    Deed the "Bank") over the Shares Being Sold and over
                    Federmann's rights in the Shares Being Sold (in this Deed
                    the "Lien") and that pursuant to the Lien the Shares Being
                    Sold are held by and registered in the name of Bank Leumi
                    Le-Israel Trust Co. Ltd., and that on the First Closing
                    Date, upon the Stage 'A' Consideration being received in
                    Federmann'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 Federmann's Account,
                    the Stage 'B' Shares will be Free and Clear.

         6.4        That apart from approval by Federmann's General Meeting and
                    board of directors, Federmann 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 Federmann's General Meeting
                    and board of directors, the signatories on Federmann's
                    behalf to this Deed and the documents ancillary hereto are
                    the persons who are empowered, on Federmann's behalf, to
                    sign this Deed and the documents ancillary hereto and/or
                    necessary for the performance hereof and to obligate
                    Federmann by their signature, and this Deed, together with
                    all its terms and conditions, obligates Federmann in all
                    respects.

         6.6        That subject to the approval of Federmann's General Meeting
                    and board of directors and the fulfillment 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 Federmann is a party, to its
                    incorporation documents or to any other obligation of
                    Federmann, whether by virtue of an contract (oral, by
                    conduct or written) or by virtue of law.

         6.7        That apart from the approval of Federmann's General Meeting
                    and board of directors and the Conditions Precedent, all
                    the approvals, consents and permits have been obtained and
                    all the necessary


                                      B-9
<PAGE>

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

         6.8        That neither the Company nor any of its subsidiaries is
                    party to any transaction or agreement in which Federmann
                    and/or its subsidiaries and/or the controlling shareholders
                    and/or officers of Federmann and/or the companies
                    controlled by any of them has a personal interest, other
                    than (1) payment of remuneration to directors of the
                    Company, in the same amounts as paid to the Company's
                    external directors; (2) arrangements for the grant of
                    relief, insurance and indemnity by the Company to the
                    Company's directors; and (3) apart from, for the avoidance
                    of doubt, Federmann's holding of securities of companies
                    whose securities are also held by the Company.

7.       Koor's Warranties and Undertakings

         Koor hereby warrants and undertakes to Federmann 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 the 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 provided in this Deed.

         7.3        That apart from approval by Koor's board of directors, 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.

         7.4        That subject to ratification by Koor's board of directors,
                    the signatories on behalf of Koor to this Deed and the
                    documents ancillary hereto are those 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 signatures, and this
                    Deed, including all its terms and conditions, obligates
                    Koor in all respects.



                                     B-10
<PAGE>

         7.5        That subject to the approval of Koor's board of directors
                    and the fulfillment 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,
                    understanding or agreement to which it is a party, to its
                    incorporation documents or to any other obligation of Koor,
                    whether by virtue of a contract (oral, by conduct or
                    written) or by virtue of law.

         7.6        That except for the approval of Koor's board of directors
                    and except for the Conditions Precedent, 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 Koor's entering into this Deed and
                    performing its obligations pursuant hereto, including the
                    acquisition from Federmann of the Shares Being Sold.

         7.7        That subject only to Federmann'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 Federmann
                    and that the Consideration, as agreed between the Parties,
                    has been fixed having regard also to the fact that the
                    purchase is on such a "As Is" basis as aforesaid.

8.       Stage 'A' of the Transaction

         8.1        On the First Closing Date and subject to the fulfillment of
                    the Stage 'A' Conditions Precedent by the Stage 'A'
                    Completion Deadline, Federmann shall sell and transfer to
                    Koor, on and against payment of the full amount of the
                    Stage 'A' Consideration, 2,160,000 (two million one hundred
                    and sixty thousand) Ordinary Shares (the Stage 'A' Shares),
                    fully paid and Free and Clear, and Koor shall purchase and
                    receive from Federmann the Stage 'A' Shares and pay
                    Federmann the full amount of the Stage 'A' Consideration
                    (in this Deed "Stage 'A' of the Transaction").

         8.2        Furthermore, on the First Closing Date, the Company shall
                    purchase from Koor 1,700,000 (one million seven hundred
                    thousand) Ordinary Shares of 1 NIS par value each of
                    Tadiran Communications, which on the date of signing this
                    Deed constitute approximately 13.8% of Tadiran
                    Communication's issued share capital, in accordance with
                    the Elbit-Koor Deed, which is being signed
                    contemporaneously with this Deed. The Elbit-Koor Deed Stage
                    'A' and Stage 'A' of the Transaction contemplated by this
                    Deed shall be performed


                                     B-11
<PAGE>

                    contemporaneously and Stage 'A' of the Transaction
                    (contemplated by this Deed) shall not be performed without
                    the Elbit-Koor Deed Stage 'A' being performed.

         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       March 31, 2005; or

                    9.1.2       if by March 31, 2005 all the Stage 'A'
                                Conditions Precedent have been fulfilled, other
                                than the approval of the [Israel] Commissioner
                                of Restrictive Trade Practices, as provided in
                                Clause 1 of Appendix "9.2", the Stage 'A'
                                Completion Deadline shall be automatically
                                deferred until May 31, 2005 or to such later
                                date as agreed by the Parties as provided in
                                Clause 20.3 below.

         9.2        The Stage 'A' Conditions Precedent are provided 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 for the provisions of Clause 17
                    hereof, without either of the Parties having any complaint
                    and/or claim and/or demand against the other. The foregoing
                    provisions of this Clause 9.3 shall not derogate from any
                    right or other remedy pursuant to this Deed or by law that
                    is available to the Parties with respect to a breach of any
                    of the provisions of this Deed (insofar as breached).

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


                                     B-12
<PAGE>

                    that the Stage 'A' Consideration has been received in
                    Federmann's Account shall be provided to Federmann.

         10.2       Federmann shall deliver to the Company a share transfer
                    deed pursuant whereto the Stage 'A' Shares are being
                    transferred from Bank Leumi Le-Israel Trust Co. Ltd to
                    Federmann, signed by Bank Leumi Le-Israel Trust Co. Ltd and
                    Federmann, and the Company shall enter Federmann in its
                    shareholder registry as the holder of the Stage 'A' Shares.

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

         10.4       Federmann shall provide Koor written 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 Lien to the effect
                    that the Lien will be discharged from the Stage 'A' Shares.

         10.5       Federmann and Koor shall deliver this Deed to the Company,
                    and Federmann shall procure that Koor is entered in the
                    Company's shareholder registry as the holder of the Stage
                    'A' Shares and that Koor receives a share certificate from
                    the Company, in the Company's standard form, attesting to
                    Koor's ownership of the Stage 'A' Shares.

         10.6       Federmann shall provide Koor a copy of the Company's board
                    of directors' resolution to the effect that, subject to the
                    performance of Stage 'A' of the Transaction, as of the
                    First Closing Date there shall be added to the Company's
                    board of directors and serve thereon as a director one
                    nominee who shall be nominated for office by Koor and who
                    meets the Qualification Conditions. Federmann undertakes
                    that there will be a vacancy on the Company's board of
                    directors so that it will be possible to add Koor's nominee
                    as aforesaid to the Company's board of directors. Koor
                    shall provide Federmann and the Company prior written
                    notice of the name of such nominee or of another nominee,
                    as nominated by Koor, in his place, and Koor (with
                    Federmann's assistance) shall coordinate with the Company's
                    corporate secretary such nominee's compliance with the
                    Qualification Conditions, all no later than 14 days prior
                    to the earlier of: (1) the Stage 'A' Completion Deadline or
                    (2) the First Closing Date.

                    If for any reason it is not possible to appoint the nominee
                    nominated by Koor as aforesaid as a director of the
                    Company, another nominee nominated by Koor, who meets the
                    Qualification Conditions, shall be

                                     B-13
<PAGE>

                    appointed in his place. Without derogating from the
                    foregoing, if the nominee nominated by Koor as aforesaid is
                    not added to the Company's board of directors on the First
                    Closing Date, Federmann shall call a General Meeting of the
                    Company as soon as possible, on the agenda of which shall
                    be the appointment of the nominee nominated by Koor as
                    aforesaid as a director of the Company. Federmann
                    undertakes to vote in favor of the appointment of the
                    nominee nominated by Koor, who was not appointed as
                    aforesaid but does meet the Qualification Conditions.

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

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

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

         10.10      The Elbit-Koor Deed Stage 'A' shall be completed, namely
                    all the acts that are to be performed on the Elbit-Koor
                    Deed First Closing Date shall be performed, as provided in
                    Clause 10 of the Elbit-Koor 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 being made concurrently, no individual act shall
                    be deemed as completed and no individual document shall be
                    deemed as delivered until all the concurrent acts have been
                    completed and all the documents have been delivered.

11.      Stage 'B' of the Transaction

         11.1       On the Second Closing Date:

                    11.1.1      subject to the fulfillment of the Stage 'B'
                                Conditions Precedent by the Stage 'B'
                                Completion Deadline; or

                    11.1.2      in the event that the Stage 'B' Conditions
                                Precedent are treated as wholly fulfilled in
                                accordance with the provisions


                                     B-14
<PAGE>

                                of Clause 12.4 below or Clause 12.5 below, as
                                the case may be;

                    Federmann shall sell and transfer to Koor, on and against
                    payment of the full amount of the Stage 'B' Consideration,
                    1,840,000 (one million eight hundred and forty thousand)
                    Ordinary Shares (the Stage 'B' Shares), fully paid and Free
                    and Clear, and Koor shall purchase and receive from
                    Federmann the Stage 'B' Shares and pay Federmann the full
                    amount of the Stage 'B' Consideration (in this Deed "Stage
                    'B' of the Transaction").

         11.2       On the Second Closing Date the Company shall purchase from
                    Koor 2,244,276 Ordinary Shares of 1 NIS par value each of
                    Tadiran Communications, constituting approximately 18.2% of
                    Tadiran Communication's issued share capital in accordance
                    with the Elbit-Koor Deed, which is being signed
                    contemporaneously with this Deed, so that Stage 'B' of the
                    Transaction (contemplated by this Deed) and the Elbit-Koor
                    Deed Stage 'B' shall be performed contemporaneously, and
                    Stage 'B' of the Transaction (contemplated by this Deed)
                    shall not be performed without the performance of the
                    Elbit-Koor Deed Stage 'B'. This Clause 11.2 shall not apply
                    if Federmann provides notice to Koor as provided in Clause
                    12.1.3 below or Clause 12.1.5 below, 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      30th June 2005; or -

                    12.1.2      subject to the provisions of Clause 12.1.3 and
                                Clause 12.1.4 below, if all the Stage 'B'
                                Conditions Precedent have not been fulfilled by
                                30th June 2005, the Stage 'B' Completion
                                Deadline shall be automatically deferred until
                                30th September 2005;

                    12.1.3      notwithstanding as provided in Clause 12.1.2
                                above, it is agreed that Federmann may provide
                                notice to Koor, to be received by Koor by 21st
                                June 2005, that Federmann is not willing to
                                extend the Stage 'B' Completion Deadline as
                                provided in Clause 12.1.2 above, and in such
                                event the Stage 'B' Completion Deadline shall
                                be the date specified in Clause 12.1.1 above,
                                namely 30th June 2005;

                                     B-15
<PAGE>

                    12.1.4      notwithstanding as provided in Clause 12.1.2
                                above, if Koor provides notice to the Company
                                as provided in Clause 12.1.3 of the Elbit-Koor
                                Deed, and Federmann does not provide notice as
                                provided in Clause 12.1.3 of this Deed, the
                                Stage 'B' Completion Deadline shall be deferred
                                until April 30, 2006;

                    12.1.5      notwithstanding as provided in Clause 12.1.4
                                above, if Koor provides notice to the Company
                                as provided in Clause 12.1.3 of the Elbit-Koor
                                Deed, Federmann may provide notice to Koor, to
                                be received by Koor within seven Business Days
                                after the date on which Koor's notice is
                                received by the Company as aforesaid, that
                                Federmann is not willing to extend the Stage
                                'B' Completion Deadline as provided in Clause
                                12.1.4 above, and in such event the Stage 'B'
                                Completion Deadline shall be the date specified
                                in Clause 12.1.2, namely September 30, 2005,
                                even if Federmann's notice as aforesaid is
                                provided to Koor after September 30, 2005.

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

         12.3       Subject to Clauses 12.4 and 12.5 below, 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
                    Stage 'B' of the Transaction in this Deed shall be deemed
                    null and void and be of no effect and, inter alia,
                    Federmann shall not sell to Koor the Stage 'B' Shares and
                    Koor shall not pay the Stage 'B' Consideration to
                    Federmann, and neither Party shall have any demand, claim
                    or complaint against the other in connection with Stage 'B'
                    of the Transaction. It is clarified that the provisions of
                    this Clause 12.3 are not such as to derogate from the
                    validity of any other provision of this Deed and/or from
                    the effect of the Shareholders Agreement, which shall enter
                    into effect on the First Closing Date, or to derogate from
                    any other right or remedy pursuant to this Deed or by law
                    that is available to the Parties with respect to a breach
                    of any of the provisions of this Deed (if and insofar as
                    breached).

         12.4       Notwithstanding as provided in Clause 12.3 above, it is
                    agreed that if the Stage 'B' Completion Deadline is
                    determined in accordance with the provisions of Clause
                    12.1.3 above, and insofar as Koor wishes to perform Stage
                    'B' of the Transaction despite the non-fulfillment of all
                    the Stage 'B' Conditions Precedent, Koor may provide
                    written notice to Federmann, to be received by Federmann by
                    no later than 30th June


                                     B-16
<PAGE>

                    2005, that Koor waives the fulfillment of the Stage 'B'
                    Conditions Precedent. In such event and provided that all
                    the Conditions Precedent for the completion of Stage 'B'
                    detailed in Appendix "12.2" of this Deed, other than the
                    Conditions Precedent in Clauses 3 and 4 of Appendix "12.2",
                    have been fulfilled by the Stage 'B' Completion Deadline,
                    all the Stage 'B' Conditions Precedent shall be treated as
                    though wholly fulfilled, and the Parties shall perform and
                    complete Stage 'B' of the Transaction on the Second Closing
                    Date. The foregoing is without the Elbit-Koor Deed Stage
                    'B' being performed and completed at the same time and
                    without the provisions of Clause 11.2 above and Clause 13.9
                    below applying and without Clauses 3 and 4 of Appendix
                    "12.2" constituting Conditions Precedent for Stage 'B'. The
                    foregoing shall not preclude the performance of the
                    Elbit-Koor Deed Stage 'B' pursuant to and subject to the
                    provisions of the Elbit-Koor Deed on the Elbit-Koor Deed
                    Second Closing Date if and when the Elbit-Koor Deed Stage
                    'B' Conditions Precedent (as defined in the Elbit-Koor
                    Deed) are fulfilled by the deadline fixed for their
                    performance in the Elbit-Koor Deed.

         12.5       Notwithstanding as provided in Clause 12.3 above, it is
                    agreed that if the transaction's Stage 'B' Completion
                    Deadline is fixed in accordance with the provisions of
                    Clause 12.1.5 and insofar as Koor wishes to perform Stage
                    'B' of the Transaction despite the non-fulfillment of all
                    the Stage 'B' Conditions Precedent, Koor may provide
                    Federmann written notice (in this Deed "Koor's Notice
                    Pursuant to Clause 12.5"), to be received by Federmann
                    within seven Business Days after the date on which Koor
                    receives Federmann's notice as provided in Clause 12.1.5
                    above, that it waives the fulfillment of the Stage 'B'
                    Conditions Precedent. In such event and provided that all
                    the Stage 'B' Conditions Precedent detailed in Appendix
                    "12.2" of this Deed, other than the Conditions Precedent in
                    Clauses 3 and 4 of Appendix "12.2", have been fulfilled by
                    the Stage 'B' Completion Deadline, all the Stage 'B'
                    Conditions Precedent shall be deemed as wholly fulfilled
                    and the Parties shall perform and complete Stage 'B' of the
                    Transaction on the Second Closing Date. The foregoing is
                    without the Elbit-Koor Deed Stage 'B' being performed and
                    completed at the same time and without the provisions of
                    Clause 11.2 above and Clause 13.9 below applying and
                    without Clauses 3 and 4 of Appendix "12.2" constituting
                    Conditions Precedent for Stage 'B'. The foregoing shall not
                    preclude the performance of the Elbit-Koor Deed Stage 'B'
                    pursuant to and subject to the provisions of the Elbit-Koor
                    Deed on the Elbit-Koor Deed Second Closing Date, if and
                    when the Elbit-Koor Deed Stage 'B' Conditions Precedent (as
                    defined in the Elbit-Koor Deed) are fulfilled by the
                    deadline fixed for their performance in the Elbit-Koor
                    Deed.

                                     B-17
<PAGE>

13.      The Second Closing Date

         Subject to the fulfillment of the Stage 'B' Conditions Precedent by
         the Stage 'B' Completion Deadline or if they are deemed as wholly
         fulfilled in accordance with the provisions of Clause 12.4 above or
         Clause 12.5 above, as the case may be, the Parties and the Company
         shall meet on the Second Closing Date at such place as determined by
         the Parties and the Company, and they shall perform the following
         interdependent acts contemporaneously:

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

         13.2       Federmann shall deliver to the Company a share transfer
                    deed pursuant to which the Stage 'B' Shares are being
                    transferred from Bank Leumi Le-Israel Trust Co. Ltd. to
                    Federmann, signed by Bank Leumi Le-Israel Trust Co. Ltd.
                    and Federmann, and the Company shall enter Federmann in its
                    shareholders registry as the holder of the Stage 'B'
                    Shares.

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

         13.4       Federmann shall provide Koor a letter of instructions from
                    the Bank, in the Bank's standard terms, addressed to the
                    Companies Registrar pursuant whereto the Bank applies to
                    the Companies Registrar to amend the Lien to the effect
                    that the Lien will be discharged from the Stage 'B' Shares.

         13.5       Federmann and Koor shall deliver this Deed to the Company,
                    and Federmann shall procure the entry of Koor in the
                    Company's shareholder registry as the holder of the Stage
                    'B' Shares and that Koor receives a share certificate from
                    the Company in the Company's standard form attesting to
                    Koor's ownership of the Stage 'B' Shares.

         13.6       Federmann shall provide Koor a copy of the Company's board
                    of directors' resolution that, subject to the performance
                    of Stage 'B' of the Transaction, there shall be added to
                    the Company's board of directors and serve on it an
                    additional director or directors another nominee or such
                    number of other nominees who is or are nominated for office
                    by Koor to the effect that after his or their addition to
                    the board of directors, the number of the Company's
                    directors who have been nominated for office by Koor and
                    meet the Qualification


                                     B-18
<PAGE>

                    Requirements, including the director added to the Board of
                    Directors as provided in Clause 10.6 above, shall be the
                    greater of:

                    (1)         two directors; or

                    (2)         a number of directors equal to 20% of the
                                number of the Company's directors (including
                                external directors and including the director
                                or directors added on Koor's nomination as
                                aforesaid), rounded up to the nearest whole
                                number.

                    Said board of directors' resolution shall provide that
                    Koor's nominee or nominees as aforesaid shall be added to
                    the Company's board of directors on the Second Closing
                    Date.

                    Federmann undertakes that there will be sufficient
                    vacancies on the Company's board of directors to make the
                    addition of Koor's nominee or nominees as aforesaid
                    possible.

                    Koor shall arrange to provide Federmann and the Company
                    prior written notice of the name or names of its nominee or
                    nominees as aforesaid or of another nominee or other
                    nominees, as nominated by Koor in his or their place, and
                    Koor (with Federmann's assistance) shall coordinate with
                    the Company's corporate secretary those nominees'
                    compliance with the Qualification Requirements, all by no
                    later than 14 days prior to the earlier of (i) the Stage
                    'B' Completion Deadline; or (ii) the Second Closing Date.

                    If for any reason it is not possible to appoint the nominee
                    or nominees that Koor proposes as aforesaid as a director
                    or directors of the Company, another nominee or nominees,
                    meeting the Qualification Requirements, shall be appointed
                    on Koor's nomination in his or their place.

                    If and insofar as according to U.S. securities laws,
                    including the U.S. Sarbanes-Oxley Act and the rules and
                    regulations that have been and are in future issued by
                    virtue thereof, including the rules of Nasdaq, it is
                    required that a majority of the Company's directors be
                    Independent Directors, then there shall be appointed as
                    additional directors of the Company, on Koor's nomination
                    as aforesaid, such number of nominees who fulfill the
                    requirements for Independent Directors, equal to one half
                    (50%) of the total number of directors who are elected to
                    office on Koor's nomination as provided in Clause 10.6
                    above and in this Clause 13.6, that number being rounded up
                    to the nearest whole number.

                                     B-19
<PAGE>

         13.7       Federmann shall provide Koor a written declaration duly
                    signed by Federmann that all Federmann's warranties and
                    representations as provided in Clauses 5 and 6 of this Deed
                    are also correct, complete and accurate as of the Second
                    Closing Date.

         13.8       Koor shall provide Federmann a written declaration duly
                    signed by Koor that all Koor's warranties and
                    representations as provided in Clauses 5 and 7 of this Deed
                    are also correct, complete and accurate as of the Second
                    Closing Date.

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

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

         13.11      All the acts mentioned above in this Clause 13 shall be
                    deemed as being performed concurrently, no individual act
                    shall be deemed as completed and no individual document
                    shall be deemed as delivered until all the concurrent acts
                    have been 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 for the fulfillment of
                    all the Conditions Precedent, including obtaining all the
                    certificates, permits and consents necessary, 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 contemplated by 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 fulfillment 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, is


                                     B-20
<PAGE>

                    hereinafter a "Fulfillment Payment"), provided that if a
                    Party to this Deed refuses to make a Fulfillment Payment,
                    the other Party may make it for the fulfillment of all or
                    any of the Conditions Precedent, provided that the first
                    Party shall not be responsible to indemnify the other Party
                    in respect of a Fulfillment Payment and the Party that
                    makes the Fulfillment Payment shall have no demand, claim
                    or right of recourse against the other Party with respect
                    to the making of such payment.

         14.3       Without prejudice to the provisions of Clauses 15 and 16
                    below, Federmann hereby undertakes that from the date of
                    signing this Deed until the earlier of:

                    14.3.1      the Stage 'A' Completion Deadline, if the Stage
                                'A' Conditions Precedent have not been
                                fulfilled by that time; or

                    14.3.2      the Stage 'B' Completion Deadline, if the Stage
                                'B' Conditions Precedent have not been
                                fulfilled by that time; or

                    14.3.3      the Second Closing Date;

                    Federmann and/or its subsidiaries and/or the controlling
                    shareholders and/or officers of Federmann 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, other than the transactions
                    contemplated by this Deed and the Elbit-Koor Deed.


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; Federmann 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 that concerns: (a) the making of any
                    distribution whatsoever, whether in cash, in kind or by a
                    distribution of bonus shares, to the Company's
                    shareholders, apart from the distribution of a current
                    dividend in cash of not more than $ 0.23 per Ordinary Share
                    in any calendar quarter; (b) an rights offering for the
                    acquisition of any securities of the Company; (c) any
                    modification to the Company's incorporation documents that
                    is such as to affect Koor's rights pursuant to the
                    Company's incorporation documents in a way that is
                    prejudicial to Koor in comparison with Federmann, all
                    unless Koor's consent is

                                     B-21
<PAGE>

                    provided thereto by written notice to be signed by two
                    officers of Koor 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
                    following 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 Federmann will
                                be entitled to receive in respect of the Shares
                                Being Sold (gross) (namely that 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 Consideration
                                shall be adjusted for the bonus element
                                embodied (if at all) in the rights, unless Koor
                                instructs Federmann in writing prior to the
                                exercise date in respect of those rights to
                                exercise the rights and in such event Federmann
                                shall exercise the rights by virtue of the
                                Shares Being Sold which have not yet been
                                transferred to Koor as at that time, and it
                                shall transfer to Koor, 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 whole exercise price
                                paid by Federmann to the Company for the
                                exercise thereof, plus Interest from the date
                                of Federmann's paying the exercise price to the
                                date of actual payment to Federmann by Koor.

                    15.2.3      If the Company distributes bonus shares or
                                dividend in kind to its shareholders prior to
                                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 dividend in kind (gross) in respect of


                                     B-22
<PAGE>

                                the Shares Being Sold, Free and Clear, without
                                Koor 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 number of
                                Shares Being Sold shall be adjusted pro rata to
                                the consolidation or sub-division and the
                                Consideration shall not be modified.

16.      Koor'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 Koor's consent,
                    Koor 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 prior to the
                    performance of Stage 'A' of the Transaction, Koor may only
                    rescind this Deed in full). Such rescission shall be
                    effected by Koor by written notice, to be received by
                    Federmann within 10 Business Days of the date on which Koor
                    learns of the occurrence of one of the events set out in
                    Clause 16.2 below. Should Koor 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
                    Koor shall not be set aside, Koor shall not return to
                    Federmann the Stage 'A' Shares and Federmann shall not
                    refund to Koor the Stage 'A' Consideration. Nevertheless,
                    all the Parties' other obligations and rights pursuant to
                    this Deed and the appendices hereto, except for the
                    Shareholders Agreement, shall be void.

         16.2       The events are as follows:

                    16.2.1      If a temporary or permanent 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.

                                     B-23
<PAGE>

         16.3       Subject to applicable law, Federmann shall provide written
                    notice to Koor of the occurrence of any of the events set
                    out in Clause 16.2 above, immediately upon its publication.

         16.4       The foregoing provisions of this Clause 16 shall not
                    derogate from any other right or remedy pursuant to this
                    Deed or by law that is available to Koor with respect to a
                    breach of any of the provisions of this Deed (if and
                    insofar as breached).


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
                    fulfillment 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 term of this Deed or if this Deed is cancelled or
                    rescinded for any reason.

         17.2       If and insofar as possible and subject to applicable law
                    and to the time periods mandated by law, the Parties shall
                    coordinate in advance the wording of every report,
                    communication or notice published by either of them in
                    connection with their entering into this Deed, its
                    performance and the fulfillment of the terms 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 taxes at source,
                    the tax shall be duly withheld by the paying Party unless
                    the recipient Party produces a valid tax withholding
                    exemption certificate issued by the tax authorities.

                                     B-24
<PAGE>

         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 (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 from Federmann's General Meeting and
                                board of directors for it to enter into this
                                Deed and the Shareholders Agreement and for
                                performance thereof by Federmann in accordance
                                with their terms and conditions, including
                                ratification of the signatures of Messrs
                                Michael Federmann and Dov Ninveh to this Deed
                                and the Shareholders Agreement.

                    19.1.2      Approval by Koor's board of directors for it 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.

                    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 hours (in this Clause
                                referred to as the "Effective Date");

                    (2)         by the Effective Date copies of the resolutions
                                of Federmann's General Meeting and board of
                                directors, as mentioned in Clause 19.1.1 above,
                                have been received at Koor's offices jointly
                                with written confirmation from Federmann's
                                attorneys that the said resolutions were duly
                                adopted and Messrs Michael Federmann and Dov
                                Ninveh were together empowered to sign, on
                                behalf of Federmann, this Deed and the
                                documents ancillary hereto or those necessary
                                for the purpose of its performance, and also the

                                     B-25
<PAGE>

                                Shareholders Agreement, and to obligate it
                                thereunder; and written confirmation from the
                                attorneys of Heris Aktiengesellschaft that the
                                competent organs of Heris Aktiengesellschaft
                                have approved its entering into the
                                Shareholders Agreement and Mr. Michael
                                Federmann has been empowered to sign, on behalf
                                of Heris Aktiengesellschaft, the Shareholders
                                Agreement and obligate it by virtue thereof;

                    (3)         by the Effective Date a copy of the resolution
                                of Koor's board of directors, as mentioned in
                                Clause 19.1.2 above, has been received at
                                Federmann's offices, together with written
                                confirmation from Koor's legal counsel that the
                                resolution was duly adopted and Messrs Jonathan
                                Kolber and Danny Biran were together empowered
                                to sign, on Koor'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 it
                                thereunder; and

                    (4)         all the approvals, as mentioned in Clause 19.1
                                of the Koor-Elbit 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      the performance and completion of Stage 'A' of
                                the Transaction are conditional upon the
                                fulfillment of all the Stage 'A' Conditions
                                Precedent by the Stage 'A' Completion Deadline
                                and, except for 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 fulfillment of all the
                                Stage 'A' Conditions Precedent; and

                    19.3.2      the performance and completion of Stage 'B' of
                                the Transaction are conditional upon the
                                fulfillment of all the Stage 'B' Conditions
                                Precedent by the Stage 'B' Completion Deadline
                                and, except for the obligations in Clauses 14
                                to 18 above and Clause 20.8 below, neither
                                Party shall be liable to

                                     B-26
<PAGE>


                            do any act for the performance and completion of
                            Stage 'B' of the Transaction before the fulfillment
                            of all the Stage 'B' Conditions Precedent.

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 Federmann
                    and Koor, 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 provided 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 existed, 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 Elbit-Koor Deed shall
                    not be applied in the interpretation hereof.

         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
                    its waiver of or acquiescence to 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.

                                     B-27
<PAGE>

         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 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 to 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 provided in writing
                    to the Parties' addresses as set out in the preamble hereto
                    or to such other addresses of which the Parties may provide
                    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 immediately
                    on delivery, or if delivered after 17:00 hours on any
                    Business Day, it shall be treated as received on the first
                    Business Day after its delivery.


          IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT


     (signed)                                (signed)
--------------------------              ---------------------------------
KOOR INDUSTRIES LTD.                    FEDERMANN ENTERPRISES LTD.


By: Jonathan Kolber                          By: Michael Federmann
       Danny Biran                                 Dov Ninveh

                                     B-28
<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 the [Israel] Commissioner of Restrictive Trade Practices'
         approval of the Parties' contracting pursuant to this Deed and the
         performance of Stage 'A' of the Transaction, provided that the
         Commissioner's disapproval of Stage 'B' of the Transaction is not
         received.

2.       Obtaining all the consents and approvals necessary and the fulfillment
         of all the Conditions Precedent for the Elbit-Koor Deed Stage 'A' to
         become effective, as provided in the Elbit-Koor Deed.

3.       Obtaining the [Israel] Ministry of Defense's approval of the Parties'
         contracting pursuant to this Deed and the performance of all their
         obligations pursuant hereto, including in connection with Stage 'B' of
         the Transaction, all insofar as necessary.

4.       Obtaining the [Israel] Chief Scientist's approval of the Parties'
         contracting pursuant to this Deed and the performance of all their
         obligations pursuant hereto, including in connection with Stage 'B' of
         the Transaction, all insofar as necessary.

5.       Obtaining the [Israel] Investment Center's approval of the Parties'
         contracting pursuant to this Deed and the performance of all their
         obligations pursuant hereto, including in connection with Stage 'B' of
         the Transaction, all insofar as necessary.

6.       Obtaining approval from banks, all insofar as necessary.

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, as existing at the
time of signing this Deed or as may arise in the future in accordance with
resolutions that have been adopted by Elbit prior to signing this Deed, or the
way in which Elbit conducts its business.

                                     B-29
<PAGE>


                                                                 Appendix 12.2


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.       Insofar as necessary, obtaining the [Israel] Commissioner of
         Restrictive Trade Practices' approval of the Parties' contracting
         pursuant to this Deed and the performance of Stage 'B' of the
         Transaction contemplated by this Deed, insofar as such approval is not
         provided in Stage 'A' of the Transaction.

2.       The completion of Stage 'A' of the Transaction contemplated by this
         Deed.

3.       The completion of the Elisra Transaction.

4.       Obtaining all the consents and approvals necessary and the fulfillment
         of all the Koor-Elbit Deed Stage 'B' Conditions Precedent, as provided
         in the Koor-Elbit Deed, except for completion of the Elisra
         Transaction.

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, as existing at the
time of signing this Deed or as may arise in the future in accordance with
resolutions that have been adopted by Elbit prior to signing this Deed, or the
way in which Elbit conducts its business.


</TEXT>
</DOCUMENT>
