<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>koorsc13dexhibitc.txt
<DESCRIPTION>EXH. C. - SHAREHOLDERS AGREEMENT - FEDERMANN
<TEXT>


                                                                      Exhibit C

                             SHAREHOLDERS AGREEMENT


                                    BETWEEN


                             KOOR INDUSTRIES LTD.,


                           FEDERMANN ENTERPRISES LTD.

                                      AND

                            HERIS AKTIENGESELLSCHAFT























                                      C-1
<PAGE>

                     [TRANSLATED FROM THE HEBREW ORIGINAL]


                             SHAREHOLDERS AGREEMENT
                             ----------------------

                Made in Tel Aviv this 27th day of December 2004


                                    BETWEEN

                              Koor Industries Ltd.
                whose address for the purpose of this Agreement
               is 14 Hamalacha Street, Afek Industrial Park, Rosh
                                 Ha'ayin 48091
                                    ("Koor")

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

                                      AND

                         1.  Federmann Enterprises Ltd.
                             ("Federmann Enterprises")

                         2.  Heris Aktiengesellschaft
                                    ("Heris")
           whose address solely for the purpose of this Agreement is
                          99 Hayarkon Street, Tel Aviv
                (Federmann Enterprises and Heris are hereinafter
               jointly and severally referred to as "Federmann")

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

                          (hereinafter the "Parties")

WHEREAS           on the date of signing this Agreement Federmann is the holder
                  of 19,915,448 Ordinary Shares of 1 NIS par value each of
                  Elbit Systems Ltd, a public company whose Shares are traded
                  on the Tel Aviv Stock Exchange and on Nasdaq in the United
                  States (hereinafter the "Company"), of which Federmann
                  Enterprises is owner of 16,078,990 Ordinary Shares of 1 NIS
                  par value each of the Company and Heris is the owner of
                  3,836,458 Ordinary Shares of 1 NIS par value each of the
                  Company (those specific Shares and bonus Shares that are in
                  future issued in respect of them, if at all, excluding the
                  Koor Shares, as defined below, are hereinafter the "Federmann
                  Shares");

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<PAGE>

AND WHEREAS       in accordance with a Share Transfer Deed between Federmann
                  Enterprises and Koor, together with the appendices thereto,
                  of which this Agreement constitutes Appendix 10.7 (herein
                  the "Deed of Sale"), Federmann Enterprises and Koor have
                  agreed upon the sale of 4,000,000 (four million) Ordinary
                  Shares of 1 NIS par value each of the Company from Federmann
                  Enterprises to Koor, subject to various conditions precedent
                  and in two stages, in the first stage 2,160,000 (two million
                  one hundred and sixty thousand) Ordinary Shares of 1 NIS par
                  value each of the Company being sold to Koor, and in the
                  second stage an additional 1,840,000 (one million eight
                  hundred and forty thousand) Ordinary Shares of the Company
                  being sold to Koor, all subject to and in accordance with
                  the provisions of the Deed of Sale (the specific Shares that
                  are to be transferred to Koor from Federmann Enterprises
                  pursuant to the Deed of Sale and bonus Shares issued in
                  respect of them, if at all, are herein referred to as the
                  "Koor Shares");

AND WHEREAS       the Parties wish to set forth their relationship with respect
                  to their holdings of the Company's Shares.


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

1.       Preamble and Interpretation
         ---------------------------

         1.1      The preamble and appendices hereto constitute an integral
                  part hereof and are as binding as the other terms hereof.

         1.2      The Clause headings herein are solely for the sake of
                  convenience and are not to be applied in the interpretation
                  hereof.

2.       Definitions
         -----------

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

         2.1      "Heris" means Heris Aktiengesellschaft (Company No.
                  56-002196-6);

         2.2      "Independent Director" means a director who meets all the
                  independence criteria in accordance with the Foreign Law;

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<PAGE>

         2.3      "Stock Exchange" means the Tel Aviv Stock Exchange Ltd. or
                  the Nasdaq National Market or any other stock exchange on
                  which the Company's Shares are listed for trade;

         2.4      "External Director" means as defined in the Companies Law;

         2.5        "Foreign Law" means the law applicable in the United States
                    regarding securities, including the provisions of the
                    Sarbanes Oxley Act and the rules and regulations that have
                    been and are in future issued by virtue thereof, and
                    including the rules of the Nasdaq National Market;

         2.6      "Agreement" means this Agreement together with the appendices
                  hereto;

         2.7      "Company" means Elbit Systems Ltd. (Public Company No.
                  520043027);

         2.8      "First Minimum Quantity" means 3,050,000 (three million fifty
                  thousand) Ordinary Shares, together with all bonus Shares
                  that are issued in respect of them, if any, and together with
                  all the Shares that are issued to Koor by virtue of rights
                  that are vested in Koor solely in respect of the Koor Shares
                  in the context of a rights offering of the Company to its
                  shareholders, if any, all from the time of signing this
                  Agreement;

         2.9      "Second Minimum Quantity" means 2,050,000 (two million fifty
                  thousand) Ordinary Shares, together with all bonus Shares
                  that are issued in respect of them, if any, and together with
                  all the Shares that are issued to Koor by virtue of rights
                  that are vested in Koor solely in respect of the Koor Shares
                  in the context of a rights offering of the Company to its
                  shareholders, if any, all from the time of signing this
                  Agreement;

         2.10     "Transfer" means a sale, gift, realization of a lien (but not
                  the creation of a lien), loan and any other transfer
                  whatsoever of a Share and/or any right vested in the Share's
                  owner and/or holder, whether or not for consideration and
                  whether voluntary or involuntary;

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

         2.12     "First Minimum Percentage" means 6.45% of the Company's
                  issued share capital at the time of computation;

         2.13     "Second Minimum Percentage" means 4.32% of the Company's
                  issued share capital at the time of computation;

                                      C-4
<PAGE>

         2.14     "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;

         2.15     "Koor" means Koor Industries Ltd. (Public Company No.
                  520014143);

         2.16     "First Closing Date" means as defined in the Deed of Sale;

         2.17     "Second Closing Date" means as defined in the Deed of Sale;

         2.18     "Stock Exchange Sale" means a sale in the context of trading
                  on the Stock Exchange or a sale in a transaction outside the
                  Stock Exchange by means of a distributor to buyers whose
                  identity is unknown to the seller or a sale to trust funds in
                  Israel or abroad or to provident funds or to provident fund
                  management companies;

         2.19     "Koor Shares" means as stated in the preamble hereto;

         2.20     "Federmann Shares" means as stated in the preamble hereto;

         2.21     "Ordinary Shares", "Shares" or the "Company's Shares" means
                  Ordinary Shares of 1 NIS par value each in the Company;

         2.22     "Federmann Enterprises" means Federmann Enterprises Ltd.
                  (Private Company No. 512278391);

         2.23     "Officer" means as defined in the Companies Law;

         2.24     "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 in respect of the Transfer and/or negotiability
                  of Shares that are imposed pursuant to the Foreign Law
                  (Shares which are not registered under U.S. securities laws);

         2.25     "Federmann" means as stated in the preamble hereto;

         2.26     "Acquisition" means acquisition, purchase, receipt of a gift
                  and any receipt of a Transfer, in any way whatsoever, of a
                  Share and/or right vested in the owner and/or holder of the
                  Share, whether or not for consideration;

         2.27     "Deed of Sale" means as stated in the preamble hereto;

                                      C-5
<PAGE>

         2.28     "Direct Control" means Control deriving from holding Shares
                  alone and not together with others;

         2.29     "Control" means as the term is defined in the [Israel]
                  Securities Law, 5728-1968;

         2.30     "Qualification Conditions" means all the requirements in
                  accordance with applicable law and pursuant to the Company's
                  documents of incorporation 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.

3.       The Parties' Warranties
         -----------------------

         3.1      Federmann hereby warrants that Federmann Enterprises is a
                  limited company, duly registered in Israel and that Heris is
                  a foreign company, duly registered in Liechtenstein.

         3.2      Koor hereby warrants that it is a limited company, duly
                  registered in Israel.

         3.3      Each of the Parties warrants that it is empowered to enter
                  into this Agreement and perform all its obligations pursuant
                  hereto and that its signatories hereto are duly empowered to
                  obligate it.

         3.4      Each of the Parties hereto warrants and undertakes that there
                  is no legal impediment and/or no impediment pursuant to its
                  incorporation documents and/or applicable law and/or any
                  order or direction of a court and/or any contract,
                  understanding or agreement to which it is a party, to its
                  entering into this Agreement and performing all its
                  obligations pursuant hereto.

         3.5      Except as set out in this Agreement, each of the Parties
                  hereby warrants that it is in possession of all the approvals
                  and consents necessary for the purpose of signing and
                  performing this Agreement.

         3.6      Each of the Parties further warrants that it is not a party
                  to any agreement, arrangement or obligation that is contrary
                  to and/or impairs its ability to perform all its obligations
                  pursuant hereto.

4.       Voting Agreement - Board of Directors
         -------------------------------------

         4.1      From the Second Closing Date until such time as Koor's
                  holdings of the Koor Shares fall below the First Minimum
                  Percentage or until such time as Koor's holdings of the Koor
                  Shares fall below the First Minimum Quantity, whichever is
                  earlier, Federmann shall vote by
                  virtue of all its holdings

                                      C-6
<PAGE>

                  in the Company's Shares in favor of the election to the
                  Company's Board of Directors of such number of candidates as
                  are nominated to office by Koor, which is 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 directors who are
                           elected as aforesaid in accordance with Koor's
                           nomination, rounded up to the nearest whole number.

                  It is hereby agreed that if it is required in accordance with
                  the Foreign Law that a majority of the Company's directors
                  are Independent Directors, Koor undertakes that at least one
                  half of the directors who are elected to office in accordance
                  with its nomination as aforesaid, that number being rounded
                  up to the nearest whole number, will fulfil the conditions
                  required in respect of Independent Directors.

         4.2      After the Second Closing Date, from such time as Koor's
                  holdings of the Koor Shares fall below the First Minimum
                  Percentage or from such time as Koor's holdings of the Koor
                  Shares fall below the First Minimum Quantity, whichever is
                  earlier, until such time as Koor's holdings of the Koor
                  Shares fall below the Second Minimum Percentage or until such
                  time as Koor's holdings of the Koor Shares fall below the
                  Second Minimum Quantity, whichever is earlier, Federmann
                  shall vote by virtue of all its holdings in the Company's
                  Shares in favor of the election of one director who has been
                  nominated by Koor, provided that the candidate fulfils all
                  the Qualification Conditions.

         4.3      From the First Closing Date until:

                  (i)      the Second Closing Date; or

                  (ii)     to the extent that the Second Closing Date does not
                           occur, until such time as Koor's holdings of the
                           Koor Shares fall below the Second Minimum Percentage
                           or until such time as Koor's holdings of the Koor
                           Shares fall below the Second Minimum Quantity,
                           whichever is earlier;

                  Federmann shall vote by virtue of all its holdings in the
                  Company's Shares in favor of the election of one director who
                  has been nominated by Koor, provided that the candidate
                  fulfils all the Qualification Conditions.

                                      C-7
<PAGE>

         4.4        From the First Closing Date, so long as Federmann holds 20%
                    or more of the Company's issued share capital and so long
                    as Koor holds the Company's Shares, Koor shall vote by
                    virtue of all its holdings in the Company's Shares:

                  4.4.1    In favor of the election of all the directors of the
                           Company whose candidacy for office has been
                           nominated by Federmann, except for the directors for
                           whose election Federmann has undertaken to vote as
                           provided in Clauses 4.1 or 4.2 or 4.3, as the case
                           may be, except for a candidate who does not fulfil
                           the Qualification Conditions.

                  4.4.2    Without derogating from the generality of Clause
                           4.4.1 above, in favor of the appointment of all the
                           external directors whose candidacy is nominated by
                           Federmann.

                  4.4.3    In favor of the appointment of the chairperson of
                           the board of directors who has been nominated for
                           office by Federmann, provided that if at the time of
                           the General Meeting at which the appointment of the
                           chairperson of the Company's board of directors is
                           raised for discussion and vote, Koor is entitled to
                           the restricted right described in Clause 6.3 below,
                           then at the time of the General Meeting there shall
                           serve one of the directors who has been elected to
                           office in accordance with Koor's nomination as
                           provided in Clause 4.1 above, who is nominated by
                           Koor as Vice chairperson of the Company's board of
                           directors.

         4.5      In Clauses 4.6 to 4.8 below, "Proposing Party" means the
                  Party on whose nomination, as provided in Clauses 4.1 or 4.2
                  or 4.3 or 4.4 above, a particular candidate has been
                  appointed as a director of the Company.

         4.6      If a Proposing Party wishes to replace or terminate the
                  office of a director elected in accordance with its
                  nomination, the Parties shall act, to the extent necessary,
                  to hold a General Meeting of the Company and vote in favor of
                  a proposal to remove said director from office and in favor
                  of the appointment of another director in his place whose
                  candidacy is nominated by the Proposing Party and who fulfils
                  all the Qualification Conditions.

         4.7      The Parties shall vote against a proposal to remove from
                  office a director whose candidacy was nominated by Koor or
                  Federmann, unless the Proposing Party otherwise instructs in
                  writing and in advance.

                                      C-8
<PAGE>

         4.8      If the post of a director is vacated for any reason, the
                  Parties shall act, to the extent necessary, to hold a General
                  Meeting of the Company and vote for the appointment as a
                  director of such candidate as nominated by the Proposing
                  Party in place of the director whose post has become vacant,
                  provided that such candidate meets all the Qualification
                  Conditions.

         4.9      Before holding any General Meeting of the Company, on the
                  agenda of which is the appointment of directors, notice shall
                  be given by the Company or by Federmann to Koor in connection
                  with holding the General Meeting and, in accordance with
                  applicable law and the Company's incorporation documents,
                  each Party shall give the Company three Business Days' prior
                  written notice, with a copy to the other, of the candidates
                  nominated by it for the office of a director in the Company,
                  as provided in this Clause 4 above.

         4.10     Should Koor's holdings of the Koor Shares fall below the
                  First Minimum Percentage or should Koor's holdings of the
                  Koor Shares fall below the First Minimum Quantity, whichever
                  is earlier, Koor shall use its best efforts, subject to
                  applicable law, in order to procure that all the directors
                  who have been appointed to office on Koor's nomination as
                  provided in Clause 4.1 above, other than one director, will
                  immediately resign from their office as directors of the
                  Company.

         4.11     Should Koor's holdings of the Koor Shares fall below the
                  Second Minimum Percentage or should Koor's holdings of the
                  Koor Shares fall below the Second Minimum Quantity, whichever
                  is earlier, Koor shall use its best efforts, subject to
                  applicable law, to procure that the director appointed to
                  office on its nomination, as provided in Clauses 4.2 and/or
                  4.3 above, shall immediately resign from his office as a
                  director.

5.       General Voting Agreement
         ------------------------

         5.1      From the First Closing Date and subject to the provisions of
                  Clause 4 above, Koor undertakes to vote by virtue of all its
                  holdings in the Company's Shares, on every matter and
                  proposed resolution that is put to the Company's General
                  Meeting for decision and/or for a resolution of the Company's
                  shareholders in any manner whatsoever, in accordance with
                  written instructions that are given to it by Federmann at
                  least seven Business Days in advance before the time of the
                  relevant General Meeting or the time of passing the relevant
                  resolution, as the case may be.

                  Solely for the purpose of this Clause 5.1, Koor shall not be
                  deemed holder of the Company's Shares that are exclusively
                  owned by related

                                      C-9
<PAGE>

                  private companies that are not companies under Koor's Control
                  and by related public companies of Koor. At Federmann's
                  request and subject to applicable law, Koor shall make a
                  recommendation to those companies to vote in accordance with
                  such instructions as have been given to Koor by Federmann as
                  aforesaid.

         5.2      The provisions of Clause 5.1 above shall not apply:

                  (i)      as regards approval by the Company's General Meeting
                           of transactions that are to be approved by reason of
                           the fact that Federmann, Federmann's controlling
                           shareholders or the officers of any of them have a
                           personal interest in them; and

                  (ii)     in connection with a proposal to alter the Company's
                           Articles of Association that is such as to affect
                           Koor's rights in accordance with the Company's
                           Articles of Association in a manner that is
                           prejudicial to Koor in comparison with Federmann.

         5.3      For the performance of the provisions of Clauses 4 and 5
                  above, the Parties undertake to attend every General Meeting
                  of the Company and do all acts necessary, at the times
                  prescribed therefor, so that their voting in the General
                  Meeting by virtue of all their holdings in the Company will
                  be valid and effective in accordance with applicable law and
                  pursuant to the Company's incorporation documents.

6.       Other Non-Transferable Rights
         -----------------------------

         6.1      Koor undertakes to give Federmann written notice immediately
                  after it learns that members of Charles Bronfman's family
                  and/or trusts for the benefit of Charles Bronfman's family
                  have ceased being Koor's controlling shareholders.

                  Federmann may, in its discretion, give written notice to Koor
                  within 90 days of the date on which it receives Koor's
                  written notice as aforesaid that it has decided to bring to
                  an end the additional non-transferable rights set out in
                  Clause 6.3 below (the date on which Federmann's written
                  notice is received by Koor being referred to below in this
                  Clause as the "Termination Date").

         6.2      The provisions of Clauses 6.3 to 6.8 below shall only apply
                  in the period between the Second Closing Date and the earlier
                  of the following two dates:

                  6.2.1    such time as the number of the Koor Shares that are
                           exclusively owned by Koor falls below the First
                           Minimum

                                     C-10
<PAGE>

                           Percentage or such time as the number of the Koor
                           Shares that are exclusively owned by Koor falls
                           below the First Minimum Quantity, whichever is
                           earlier. For the avoidance of doubt, Shares owned by
                           a person or entity that is not Koor shall not be
                           deemed as Shares that are exclusively owned by Koor,
                           even if Koor is deemed to hold them by virtue of
                           Clause 17.6 below; or

                  6.2.2    the Termination Date, as defined in Clause 6.1
                           above.

         6.3      The Parties shall act, subject to applicable law, for the
                  appointment of one of the directors who have been elected to
                  office on the nomination of Koor as provided in Clause 4.1
                  above, who shall be nominated by Koor, as Vice Chairperson of
                  the Company's Board of Directors.

         6.4      The Parties shall act, subject to applicable law, so that on
                  every one of the Company's Board of Directors' committees
                  there shall be a member one of the directors elected for
                  office on Koor's nomination as provided in Clause 4.1 above,
                  who shall be nominated by Koor.

         6.5      The Parties shall act, subject to applicable law, so that
                  there shall be established in the Company a board of
                  directors' committee for strategic planning, its members
                  being: one of the directors elected for office on Koor's
                  nomination as provided in Clause 4.1 above, who shall be
                  nominated by Koor, at least one of the external directors and
                  such other directors as determined by the Company's board of
                  directors (hereinafter the "Strategic Planning Committee").
                  The function of the Strategic Planning Committee shall be to
                  assist and make recommendations to the Company's board of
                  directors on the strategic planning of the Company's business
                  activity.

         6.6      When the tenure of Mr Joseph Ackerman (hereinafter "Mr.
                  Ackerman") as President and CEO of the Company comes to an
                  end, the Parties shall act, subject to the provisions of
                  applicable law, so that the Company's board of directors
                  establishes a special search committee, the composition of
                  which shall include the Chairperson of the board of
                  directors, the Vice Chairperson of the board of directors, a
                  director elected to office on the nomination of Federmann as
                  provided in Clause 4.4.1 above and a director elected to
                  office on the nomination of Koor, as provided in Clause 4.1
                  above (hereinafter the "Search Committee"). The Search
                  Committee shall act for 30 days in an attempt to identify a
                  candidate for the post of the Company's CEO, who is agreed by
                  all the members of the Committee and it shall make a
                  recommendation to the Company's board of directors to elect
                  that candidate to the post of the Company's CEO. In any
                  event, even if the Search Committee has been unable to locate
                  a candidate agreed by all

                                     C-11
<PAGE>

                  the members of the Search Committee within 30 days as
                  aforesaid, the Company's CEO shall be elected by the
                  Company's board of directors.

                  For the avoidance of doubt, it is clarified that the
                  Company's President and CEO is currently Mr Ackerman, and
                  that the Company's board of directors may extend Mr
                  Ackerman's tenure as it deems fit, and that the Search
                  Committee mentioned above shall not be established for that
                  purpose.

         6.7      To the extent requested to do so by Koor, Federmann shall
                  vote in the Company's General Meeting by virtue of all its
                  holdings in the Company in order to pass a resolution of the
                  Company approving the Company's entering into a Registration
                  Rights Agreement with Koor, which will vest Koor, so long as
                  it holds 5% or more of the Company's issued share capital,
                  with one demand right on the same conditions, mutatis
                  mutandis, ("Registration Right") as those detailed in the
                  Registration Rights Agreement dated 5 July 2000 among the
                  Company, Elron Electronic Industries Ltd. and Federmann (the
                  "Registration Rights Agreement"). Federmann hereby undertakes
                  that to the extent that pursuant to the Registration Rights
                  Agreement it is vested with more than one demand right and to
                  the extent that the Company so requires for the purpose of
                  granting the Registration Right to Koor, Federmann shall,
                  without any consideration or compensation, relinquish one
                  demand right that is vested in it pursuant to the
                  Registration Rights Agreement.

         6.8      Should officers or controlling shareholders of Federmann
                  serve as directors of any subsidiary of the Company, the
                  Parties shall act, subject to applicable law, so that the
                  Company also appoints as a director of that subsidiary one of
                  the directors of the Company who has been appointed to office
                  on Koor's nomination as provided in Clause 4 above. The
                  foregoing shall not apply if there is any legal restriction
                  to the appointment of more than one director, who is a
                  director of the Company, to the subsidiary's board of
                  directors as aforesaid.

7.       For the avoidance of doubt, it is clarified that the rights granted to
         Koor pursuant to Clause 6 above, in all its sub-clauses, are personal
         (non-transferable) rights that are not attached to the Koor Shares
         that are held by Koor. Said rights are not assignable and/or
         transferable to any third party, either together with a Transfer of
         all or any of the Koor Shares in the Company or otherwise.

8.       Restrictions on Transfer of Shares
         ----------------------------------

                                     C-12
<PAGE>

         8.1      From the First Closing Date, Koor shall not Transfer all or
                  any of the Koor Shares, including in the event of a forced
                  sale due to receivership, execution proceedings or winding-up
                  proceedings, except subject to and in accordance with the
                  provisions of Clauses 10, 11 and 12 below.

         8.2      From the First Closing Date, Federmann shall not Transfer all
                  or any of the Federmann Shares, including in the event of a
                  forced sale due to receivership, execution proceedings or
                  winding-up proceedings, except subject to and in accordance
                  with the provisions of Clauses 9 and 12 below.

9.       Koor's Tag-Along Right on a Sale of the Federmann Shares
         --------------------------------------------------------

         9.1      Should Federmann wish to Transfer any of the Federmann Shares
                  that constitute more than half the Federmann Shares that are
                  held by Federmann for the time being to a third party (in
                  this Clause 9 the "Third Party"), Federmann shall provide
                  Koor written notice detailing the number of Shares that it
                  intends to Transfer to the Third Party (in this Clause "the
                  Offered Shares"), the identity of the Third Party, the
                  identity of all the Third Party's ultimate interested parties
                  or, to the extent that the Third Party wishes to receive a
                  Transfer of the Offered Shares indirectly through a trustee
                  and/or another person and/or another entity in any manner
                  whatsoever, the identity of every such trustee and other
                  person and entity as aforesaid and the identity of the third
                  party beneficiary and all its ultimate interested parties,
                  the number of Shares that are held by Federmann at the time
                  of giving the notice, all to the level of detail for which
                  the Company and/or the Third Party would be obligated, in
                  accordance with Israeli securities laws, for reporting the
                  identity of the said entities and persons, were the Third
                  Party an interested party in the Company, and the
                  consideration that the Third Party has undertaken to pay
                  Federmann for the Offered Shares, the payment terms and all
                  the other material conditions of the transaction, including
                  the transaction's conditions precedent (hereinafter in this
                  Clause the "Sale Notice").

         9.2      By the end of a period of 7 Business Days starting on the
                  date of Koor's receipt of the Sale Notice (hereinafter the
                  "Tag-Along Notice Period"), Koor may provide Federmann
                  written notice that it wishes to sell to the Third Party the
                  Koor Shares that it holds at that time or a portion thereof
                  together with the Offered Shares and at the price and on the
                  payment terms and other conditions specified in the Sale
                  Notice (in this Clause 9 the "Tag-Along Notice"). In the
                  Tag-Along Notice, which will be provided during the Tag-Along
                  Notice Period, Koor shall specify the quantity of Shares,
                  solely out of the Koor Shares, that Koor wishes to sell the
                  Third Party as aforesaid.

                                     C-13
<PAGE>

         9.3      Should Koor provide a Tag-Along Notice during the Tag-Along
                  Notice Period, Federmann shall be entitled to Transfer its
                  Shares to the Third Party, provided that the Third Party also
                  purchases from Koor, at the price and on the payment terms
                  and other conditions specified in the Sale Notice, and at the
                  same time, the Koor Shares specified by Koor in the Tag-Along
                  Notice. If the number of Offered Shares, together with the
                  number of the Koor Shares specified in the Tag-Along Notice,
                  exceeds the quantity of Shares that the Third Party is
                  willing to purchase, the quantity of Shares that is purchased
                  by the Third Party shall be apportioned pro rata between
                  Federmann and Koor in the ratio between the number of the
                  Federmann Shares that are held by Federmann prior to
                  completing the Share Transfer to the Third Party and the
                  number of the Koor Shares that are held by Koor prior to
                  completing the Share Transfer to the Third Party.

         9.4      Should Koor not provide a Tag-Along Notice during the
                  Tag-Along Notice Period, Federmann may Transfer the Offered
                  Shares to the Third Party for consideration and on payment
                  terms and other conditions no better to Federmann than those
                  detailed in the Sale Notice, provided that an Agreement for
                  the Transfer of the Offered Shares is signed by Federmann and
                  the Third Party within 30 Business Days of the end of the
                  Tag-Along Notice Period and the Transfer of the Offered
                  Shares pursuant thereto is completed within 180 days of the
                  end of the Tag-Along Notice Period, all subject to the
                  provisions of Clauses 12.1 to 12.3 below.

         9.5      For the avoidance of doubt, to the extent that a transaction
                  for the Transfer to the Third Party of the Offered Shares is
                  not signed by the expiration of 30 Business Days from the end
                  of the Tag-Along Notice Period or the transaction for the
                  Transfer of the Offered Shares is not completed within 180
                  days of the end of the Tag-Along Notice Period, Federmann may
                  only Transfer the Offered Shares after again providing a
                  Tag-Along Notice to Koor as provided above in this Clause 9.

         9.6      For the purpose of the foregoing provisions of Clause 9,
                  there shall be deemed as a single Transfer (1) a number of
                  transactions for the Transfer of Shares that are effected
                  with a single Third Party during a six-month period and for
                  such purpose a "Transaction for the Transfer of Shares"
                  includes the grant, Transfer or sale of any option or right
                  to acquire or receive Shares; and the "Single Third Party"
                  includes any related company (as defined in the Securities
                  Law, 5728-1968) of the Third Party and any interested party
                  (as defined in the Securities Law, 5728-1968) in any of them
                  and includes anyone acting with the Third Party, in
                  cooperation under an agreement, whether written or oral, and

                                     C-14
<PAGE>

                  also (2) a transaction for the Transfer of Shares (as defined
                  above) in the scope of which there are Transferred in any
                  manner whatsoever - including as a result of a Transfer of
                  Control in Heris from Federmann Enterprises to a Third Party
                  or Third Parties and/or in other subsidiaries of Federmann
                  from Federmann to any Third Party or Third Parties and/or a
                  Transfer of actual economic control of the Federmann Shares
                  that are owned by Heris and/or other subsidiaries of
                  Federmann from Federmann to any Third Party or Third Parties
                  - Shares of Federmann, from Federmann to any Third Party or
                  Third Parties, in a percentage of more than 50% of the
                  Federmann Shares that are then held by Federmann.

         9.7      For the avoidance of doubt, the foregoing shall not preclude
                  Federmann from entering into an agreement to Transfer the
                  Offered Shares to the Third Party before giving the Sale
                  Notice, provided that such does not preclude Koor from
                  tagging along in the sale of the Offered Shares to the Third
                  Party in accordance with the provisions of this Clause 9.

         9.8      Without derogating from and in addition to the provisions of
                  Clause 9.6, the provisions of Clauses 9.1 to 9.7 above shall
                  not apply, and Koor shall not have a Tag-Along Right, in
                  respect of a Transfer of any of the Federmann Shares from
                  Federmann Enterprises to Heris and vice versa. Nevertheless,
                  if Federmann Enterprises sells Control of Heris and at the
                  time of the sale Heris holds more than 50% of the Federmann
                  Shares, Federmann shall grant Koor the Tag-Along Right as
                  provided in Clauses 9.1 to 9.7 above, mutatis mutandis. To
                  the extent that at the time of the Transfer of Control of
                  Heris, Heris holds other assets, in addition to the Federmann
                  Shares, the value of the Federmann Shares that are held by
                  Heris at that time shall be determined by an appraiser agreed
                  between the Parties, and in the absence of such agreement,
                  then by the chairperson of the accounting firm of Somekh
                  Chaikin (KPMG), who may also appoint himself.

         9.9      It is agreed that the foregoing provisions of Clauses 9.1 to
                  9.8 shall not apply and Koor's Tag-Along Right shall expire
                  from such time as Koor's holdings of the Koor Shares fall
                  below the Second Minimum Percentage or from such time as
                  Koor's holdings fall below the Second Minimum Quantity,
                  whichever is earlier.

10.      Non-Transfer of Shares by Koor
         ------------------------------

         Koor shall not Transfer the Koor Shares or any of them during the
         period commencing on the date of signing this Agreement and ending at
         the later of the following two dates:

                                     C-15
<PAGE>

         10.1     on the expiration of 12 months after the First Closing Date;
                  or

         10.2     if the performance of Stage 'B' of the Transaction pursuant
                  to the Deed of Sale is completed - the expiration of nine
                  months after the Second Closing Date;

         (hereinafter the "Prohibited Sales Period").

11.      Federmann's Right of First Refusal
         ----------------------------------

         11.1     Subject to the provisions of Clause 10 above and Clause 12
                  below, if Koor wishes to Transfer any of the Koor Shares to a
                  Third Party, it may only do so if it first enters into an
                  agreement with a specific Third Party for the Transfer of
                  those Shares, the agreement being subject to the Right of
                  First Refusal vested in Federmann pursuant to this Agreement,
                  and subject to the following provisions.

                  Koor shall provide Federmann written notice within 2 Business
                  Days of entering the agreement with the Third Party, in which
                  it shall notify Federmann that it has entered into a binding
                  agreement for the Transfer of Shares from the Koor Shares to
                  a Third Party (in this Clause 11 the "Third Party"), subject
                  to the Right of First Refusal vested in Federmann pursuant to
                  this Clause 11, and in the notice it shall detail the number
                  of Shares that it has undertaken to Transfer to the Third
                  Party (in this Clause the "Offered Shares"), the identify of
                  the Third Party and the identity of all the Third Party's
                  ultimate interested parties or to the extent that the Third
                  Party wishes to receive a Transfer of the Offered Shares
                  indirectly through a trustee and/or other person and/or
                  entity in any manner, then the identity of every such trustee
                  and other person and entity as aforesaid, the identity of the
                  Third Party beneficiary and of all its ultimate interested
                  parties, the number of the Shares held by the Third Party on
                  the date of providing the notice, all to the same level of
                  detail for which the Company and/or the Third Party would be
                  obligated, in accordance with Israeli securities laws, for
                  reporting the identity of the said entities and persons, were
                  the Third Party an interested party in the Company, and the
                  consideration that the Third Party has undertaken to pay to
                  Koor for the Offered Shares (which shall only be cash
                  consideration), the payment terms and all the other material
                  conditions of the transaction, including all the conditions
                  precedent of the transaction (hereinafter in this Clause the
                  "Sales Notice").

         11.2     Until the end of a period of 21 Business Days commencing on
                  the date of Federmann's receipt of the Sales Notice
                  (hereinafter in this Clause 11 the "Acceptance Notice
                  Period"), Federmann may give Koor written notice that it has
                  decided to purchase the Offered Shares for

                                     C-16
<PAGE>

                  the consideration and on the payment terms and other
                  conditions detailed in the Sales Notice (hereinafter the
                  "Acceptance Notice").

         11.3     In the event of Acceptance Notice being provided, Koor shall
                  Transfer to Federmann and Federmann shall take a Transfer
                  from Koor of all the Offered Shares, Free and Clear, for the
                  consideration and on the terms and conditions detailed in the
                  Sale Notice, within 7 Business Days of the date on which all
                  the approvals and permits necessary for such transaction as
                  aforesaid in accordance with applicable law are obtained and
                  in any event not later than the expiration of 60 days from
                  the date the Acceptance Notice is provided (hereinafter the
                  "Completion Period"). The Parties shall cooperate in order to
                  obtain all the approvals and permits necessary for the
                  transaction as aforesaid as soon as possible.

         11.4     Should Federmann not provide Koor an Acceptance Notice in
                  writing by the end of the Acceptance Notice Period or should
                  Federmann provide an Acceptance Notice but the transaction
                  mentioned in Clause 11.3 above not be completed by the end of
                  the Completion Period other than due to a breach of this
                  Agreement by Koor, Koor may Transfer the Offered Shares to
                  the Third Party for the consideration and on the payment
                  terms and other conditions detailed in the Sales Notice,
                  provided that the transaction for the sale to the Third Party
                  of the Offered Shares is completed by the expiration of 120
                  days from the end of the Acceptance Notice Period or from the
                  end of the Completion Period, as the case may be (hereinafter
                  the "Maximum Sales Period"), all subject to the provisions of
                  Clauses 12.1 to 12.3 below.

         11.5     For the avoidance of doubt, should the transaction for the
                  sale of the Offered Shares to the Third Party not be
                  completed by the end of the Maximum Sales Period, Koor may
                  only Transfer the Offered Shares after again providing a
                  Right of First Refusal to Federmann as provided above in this
                  Clause 11.

         11.6     From the end of the Prohibited Sales Period, the provisions
                  of Clauses 11.1 to 11.5 above shall not apply with respect to
                  a Stock Exchange sale of the Koor Shares by Koor in aggregate
                  quantities not exceeding in any 12-month period 2% of the
                  Company's issued share capital.

         11.7     Notwithstanding the provision of Clause 11.6 above, Koor may
                  not Transfer, pursuant to Clause 11.6 above, in the
                  aggregate, more than 950,000 of the Koor Shares that are held
                  by it:

                  11.7.1   unless Federmann Transfers any of the Federmann
                           Shares, except on a Transfer subject to Koor's
                           Tag-Along Right

                                     C-17
<PAGE>

                           pursuant to Clause 9 above, and except for a
                           Transfer to a person or entity, the Shares held by
                           which are deemed as held by Federmann in accordance
                           with the provisions of Clause 17.6 below; or

                  11.7.2   unless the quantity of the Federmann Shares together
                           with the Koor Shares falls below 45% of the
                           Company's issued share capital, other than as a
                           result of a breach of this Agreement by Koor.

12.      Transfer of Shares and Obligations Pursuant to the Agreement
         ------------------------------------------------------------

         Without derogating from the other provisions of this Agreement,
         including Clause 7 above, it is agreed that on any Transfer of the
         Federmann Shares by Federmann that is subject to Koor's Tag-Along
         Right under Clause 9 above, and on any Transfer of the Koor Shares by
         Koor that is subject to Federmann's Right of First Refusal under
         Clause 11 above (hereinafter in this Clause 12 the "Shares Being
         Transferred", and Koor and Federmann being respectively the
         "Transferor Party"), the following provisions shall apply:

         12.1     If the Transferor Party wishes to Transfer all the Federmann
                  Shares or all the Koor Shares, as the case may be, the
                  Transferor Party may not do so and such a Transfer shall be
                  ineffective unless the Transferor Party Transfers and assigns
                  to the transferee the Shares Being Transferred (in this
                  Clause 12 the "Purchaser"), together with the Transfer of the
                  Shares Being Transferred, all the rights and obligations of
                  the Transferor Party pursuant to this Agreement, and the
                  Purchaser and the Transferor Party so confirm in writing to
                  the other Party as provided in Clause 12.3 below. On
                  completion of the assignment and Transfer of all the
                  Transferor Party's rights and obligations as aforesaid, the
                  Transferor Party shall cease being a Party to this Agreement
                  and shall be succeeded by the Purchaser.

         12.2     If the Transferor Party wishes to Transfer only a portion of
                  the Federmann Shares or only a portion of the Koor Shares, as
                  the case may be, then the Transferor Party may not do so and
                  such a Transfer shall be ineffective, unless, together with
                  the Transfer of the Shares being Transferred, the Purchaser
                  assumes all the obligations of the Transferor Party jointly
                  and severally with the Transferor Party and confirms said
                  obligation in writing to the other Party as provided in
                  Clause 12.3 below. For the avoidance of doubt, it is
                  clarified that the Transferor shall continue to be entitled
                  as against the other Party to all the rights vested in the
                  Federmann Shares or the Koor Shares, as the case may be, that
                  are held by it.

                                     C-18
<PAGE>

         12.3     In the event that Koor is the Transferor Party, Koor shall
                  provide Federmann, together with the Sales Notice as
                  mentioned in Clause 11.1 above, the written confirmation of
                  Koor and the Purchaser as provided in Clause 12.1 above or
                  the written confirmation of the Purchaser as provided in
                  Clause 12.2 above, as the case may be, duly signed by the
                  Purchaser and/or Koor, as the case may be.

                  In the event that Federmann is the Transferor Party,
                  Federmann shall provide Koor, within 2 Business Days of
                  signing an agreement with the Purchaser for the Transfer of
                  the Offered Shares, as provided in Clause 9.4 or Clause 9.7
                  above, the written confirmation of the Purchaser, as provided
                  in Clause 12.1 above or the written confirmation of Federmann
                  and the Purchaser, as provided in Clause 12.2 above, as the
                  case may be, duly signed by the Purchaser and/or Federmann,
                  as the case may be.

         12.4     In addition to the foregoing, even in a case or cases in
                  which Federmann Transfers any of the Federmann Shares that
                  are held by it, the Transfer of which is not subject to
                  Koor's Tag-Along Right pursuant to Clause 9 above, Federmann
                  may, if it so desires, assign and Transfer its obligations
                  pursuant to this Agreement or any of them so that the
                  transferee of the Shares and Federmann shall be jointly and
                  severally liable to Koor for all the obligations pursuant to
                  this Agreement or a portion of them, in such proportion as
                  determined between Federmann and the transferee of the
                  Shares. For the avoidance of doubt, Federmann may exercise
                  its right to assign and Transfer all or any of its
                  obligations as provided in this Clause 12.4 together with a
                  Transfer of any of the Federmann Shares, once or several
                  times, in its discretion.

13.      Limitation on Restrictions and Rights
         -------------------------------------

         The limitations imposed with respect to a Share Transfer and the
         rights vested in the Parties in connection with a Share Transfer
         pursuant to Clauses 9 to 12 above only apply to the Federmann Shares
         and the Koor Shares, and those limitations and rights shall not apply
         with respect to other Shares in the Company that may be held by
         Federmann or Koor, as the case may be.

14.      Tag-Along Right to Purchase
         ---------------------------

         Should a Party to this Agreement (in this Clause 14 the "Purchasing
         Party") directly or indirectly, including through subsidiaries and/or
         any trustee, acquire Shares of the Company for total consideration in
         excess of US$ 25 million (in this Clause 14 the "Purchased Shares")
         from a Single Third Party, as defined in Clause 9.6 above (in this
         Clause 14 the "Seller"), whether or not on the Stock Exchange (in this
         Clause 14 the "Purchase Transaction"), the other

                                     C-19
<PAGE>

         Party to the Agreement (in this Clause 14 the "Other Party") shall
         have a right to tag along on such Acquisition as aforesaid, on the
         terms of the Purchase Transaction, and to acquire a portion of the
         securities that are being purchased (in this Clause 14 the "Purchase
         Tag-Along Right") in accordance with the provisions set out below:

         14.1     The Purchasing Party shall provide the other Party written
                  notice within 3 Business Days of the completion of the
                  Purchase Transaction, detailing the terms of the Purchase
                  Transaction that it has made, including the quantity of
                  additional Shares, the price (which shall only be cash
                  consideration), the payment terms, the Seller's identity and
                  every other material condition (in this Clause 14 the
                  "Seller's Notice").

         14.2     Within 14 Business Days of receiving the Purchaser's notice,
                  the Other Party shall give the Purchasing Party written
                  notice if it is tagging along in the Purchase Transaction and
                  of the quantity of Shares, out of the additional Shares, that
                  it wishes to purchase, not exceeding such quantity the ratio
                  between which it and the rest of the additional Shares is
                  equal to the ratio:

                  (i)      if Koor is the Other Party - between the Koor Shares
                           that are held by Koor on the date the Purchaser's
                           notice is given and the Federmann Shares that are
                           held by Federmann on the date the Purchaser's notice
                           is given;

                  (ii)     if Federmann is the Other Party - between the
                           Federmann Shares that are held by Federmann on the
                           date the Purchaser's notice is given and the Koor
                           Shares that are held by Koor on the date the
                           Purchaser's notice is given.

         14.3     Should the Other Party give the Purchasing Party Tag-Along
                  notice at such time as mentioned in Clause 14.2 above, the
                  Purchasing Party shall Transfer to the Other Party Shares of
                  the Company in the quantity specified in the Tag-Along
                  notice, Free and Clear, for the consideration and on the
                  terms detailed in the Purchaser's notice, all within 7
                  Business Days of the date of giving the Tag-Along notice.

15.      Term of the Agreement and Effect of the Agreement
         -------------------------------------------------

         15.1     This Agreement shall take effect on the First Closing Date.
                  Should Stage 'A' of the Transaction (as the term is defined
                  in the Deed of

                                     C-20
<PAGE>

                  Sale) not be performed and completed by the end of 3 Business
                  Days after the Stage 'A' Completion Deadline (as defined in
                  the Deed of Sale), then this Agreement shall be null and void
                  and ineffective, without either of the Parties having any
                  claim, complaint or demand against the other.

         15.2     This Agreement shall be in effect until the end of a period
                  of 15 years from the date on which it enters into effect as
                  provided in Clause 15.1 above or until such time as
                  Federmann's holdings of the Federmann Shares together with
                  Koor's holdings of the Koor Shares fall below 25% of the
                  Company's issued share capital, whichever is the earlier.

         15.3     For the avoidance of doubt, it is clarified that this
                  Agreement shall not come to an end if Koor or Federmann
                  ceases to hold Koor Shares or the Federmann Shares, as the
                  case may be, if together with a Transfer of the remainder of
                  the Federmann Shares or the Koor Shares, as the case may be,
                  the Transferor Party (as defined in Clause 12 above)
                  Transferred and assigned all its rights and obligations
                  pursuant to this Agreement to the Purchaser (as defined in
                  Clause 12 above), and the provisions of this Agreement shall
                  continue to apply and obligate the Purchaser and the Other
                  Party.

16.      Koor's Withdrawal from the Controlling Interest
         -----------------------------------------------

         16.1     Koor may at any time from October 1, 2008, provide written
                  notice to Federmann in which it shall inform Federmann of
                  Koor's desire to bring to an end its rights and obligations
                  pursuant to Clauses 4, 6 (if Koor is entitled to rights
                  pursuant to Clause 6 at that time), 7, 8, 9, 10, 11 (except
                  for Clauses 11.6 and 11.7), 12, 13 and 14 of this Agreement
                  (hereinafter in this Clause 16 the "Revoked Clauses"), and on
                  the expiration of 6 months from the date on which Federmann
                  is given Koor's written notice as aforesaid (hereinafter in
                  this Clause 16 the "Expiration Date"), all the Parties'
                  rights and obligations pursuant to the Revoked Clauses shall
                  expire so that the sole rights and obligations that will
                  continue to obligate and entitle the Parties pursuant to this
                  Agreement shall be the rights and obligations in Clause 5
                  above and this Clause 16, all without prejudice to either of
                  the Party's rights to any relief in respect of a breach of
                  any of the provisions of the Revoked Clauses that occurred
                  prior to the Expiration Date.

         16.2     Should such notice be given by Koor and to the extent that
                  Federmann so wishes, the Parties shall discuss the
                  possibility of Koor's Shares that are held by Koor at that
                  time being acquired by Federmann, alone or together with
                  others, without the provisions of this Clause being such as
                  to obligate either of the Parties to enter into such a
                  purchase

                                     C-21
<PAGE>

                  agreement or to permit Koor to Transfer the Koor Shares
                  otherwise than in accordance with the provisions of Clauses
                  16.3 and 16.4 below.

         16.3     As from the Expiration Date, Koor may Transfer all or any of
                  the Koor Shares that are held by it in any way, either by a
                  Stock Exchange sale or otherwise, including a distribution in
                  kind to its shareholders, subject nevertheless to Federmann's
                  Right of First Offer as provided in Clause 16.4 below or in
                  accordance with the provisions of Clauses 11.6 and 11.7
                  above.

         16.4     Federmann's Right of First Offer
                  --------------------------------

                  16.4.1   As of the Expiration Date, Koor may not Transfer any
                           of the Koor Shares unless it first gives Federmann
                           written notice detailing the quantity of the Koor
                           Shares that it wishes to transfer (hereinafter the
                           "Offered Shares").

                  16.4.2   Federmann may, but is not required to, within 14
                           Business Days of receiving Koor's notice as
                           aforesaid (hereinafter in this Clause 16.4 the
                           "Offer Period"), provide Koor written notice
                           (hereinafter in this Clause 16.4 "Federmann's
                           Notice"), informing Koor that it wishes to purchase
                           from Koor the Offered Shares or the portion of them
                           as specified by Federmann in Federmann's Notice
                           (hereinafter in this Clause 16. the "Shares for
                           Purchase") and the price per Share that it is
                           willing to pay for those Shares (hereinafter in this
                           Clause 16.4 the "Price Offered").

                  16.4.3   Within 7 Business Days of Koor's receiving
                           Federmann's Notice, Koor shall provide Federmann
                           written notice (hereinafter in this Clause 16.4 the
                           "Koor's Notice") if it agrees or if it does not
                           agree to Transfer to Federmann the Shares for
                           Purchase at the Price Offered. Should Koor inform
                           Federmann in Koor's Notice that it agrees to
                           Transfer to Federmann the Shares for Purchase at the
                           Price Offered, Koor shall Transfer to Federmann and
                           Federmann shall accept from Koor a Transfer of the
                           Shares for Purchase, and Federmann shall pay Koor
                           the Price Offered, all by the expiration of 21
                           Business Days from the date Koor's Notice is
                           received by Federmann (hereinafter in this Clause
                           16.4 the "Completion Period").

                  16.4.4   Should Koor inform Federmann in Koor's Notice that
                           it does not agree to Transfer to Federmann the
                           Shares for Purchase at the Price Offered, Koor may
                           Transfer the Shares for

                                     C-22
<PAGE>

                           Purchase to a Third Party or Third Parties, but only
                           at a price greater than the Price Offered on the
                           same or more favorable payment terms to Koor than
                           those specified in Clause 16.4.3 above, without any
                           further obligation of Koor, all within 90 Business
                           Days of the date Koor's Notice is given. For the
                           avoidance of doubt, to the extent that the Shares
                           for Purchase have not been Transferred by Koor to a
                           Third Party as aforesaid within 90 Business Days of
                           the date of Koor's notice being provided, Koor may
                           only Transfer the Shares for Purchase after again
                           providing Federmann the Right of First Offer as
                           provided in this Clause 16.4.

                  16.4.5   Should Federmann not provide Federmann's Notice
                           within the 14 Business Days mentioned in Clause
                           16.4.2 above or should Federmann state in
                           Federmann's Notice that it wishes to acquire only
                           some of the Offered Shares or if the Transfer of the
                           Shares for Purchase has not been completed by the
                           end of the Completion Period, otherwise than due to
                           a breach of contract by Koor, Koor may, within 90
                           Business Days of the date on which Koor's Notice was
                           provided as provided in Clause 16.4.3 above or from
                           the end of the Completion Period, as the case may
                           be, sell the Offered Shares (if Federmann's Notice
                           has not been provided as aforesaid) or that portion
                           of them that are not included in the Shares for
                           Purchase (if Federmann's Notice is provided with
                           respect to only a portion of the offered Shares).

                  16.4.6   For the purpose of Clauses 16.4.3 and 16.4.5 above,
                           a Transfer of Shares by means of their distribution
                           as a dividend in kind by Koor to its shareholders
                           shall be deemed as a Transfer of Shares that is made
                           on the date determining the rights to receive the
                           dividend in kind by Koor's shareholders, and such
                           Transfer as aforesaid shall be deemed as though made
                           at the average closing price of the Company's shares
                           on the Tel Aviv Stock Exchange in the 12 trading
                           days before and in the 12 trading days after the
                           date of giving Koor's written notice as provided in
                           Clause 16.4.1 above.

17.      Miscellaneous
         -------------

         17.1     This Agreement may be signed in several separate copies and
                  each copy signed by one of the Parties shall be treated as an
                  original and all together they shall be treated as a single,
                  complete document.

                                     C-23
<PAGE>

         17.2     No conduct by either of the Parties shall be deemed a waiver
                  of any of its rights pursuant to this Agreement or by law or
                  as its waiver of or acquiescence to in any breach or
                  non-performance of any condition, unless the waiver,
                  acquiescence, postponement, modification, cancellation or
                  addendum has been done expressly and in writing.

         17.3     This Agreement contains, embodies, merges and expresses all
                  the terms and conditions agreed between the Parties on the
                  matters mentioned herein. Any promises, guarantees,
                  agreements, whether written or oral, undertakings or
                  representations on the matters mentioned in this Agreement
                  that were given or made by the Parties prior to the making of
                  this Agreement that have not found specific expression herein
                  shall not be deemed to augment, derogate from or modify the
                  rights and obligations provided in this Agreement or deriving
                  herefrom, and the Parties shall not be bound by them from the
                  date of this Agreement (hereinafter "Revocation of the
                  Obligations Preceding Signature"). It is hereby expressly
                  agreed that the Revocation of the Obligations Preceding
                  Signature shall be effective even in the event that this
                  Agreement is revoked or rescinded for any reason. The
                  foregoing shall not be such as to impair the effect of the
                  Parties' rights and obligations pursuant to the Sale [sic]
                  Agreement.

         17.4     For the avoidance of doubt, the provisions of the
                  Shareholders Agreement between Koor and the Company,
                  including wording that is different from the wording of this
                  Agreement, shall not in any manner be applied in the
                  interpretation of this Agreement. Without prejudice to the
                  generality of the foregoing, the exchanges of documents
                  between the Parties prior to the signature of this Agreement,
                  including the drafts exchanged between them, shall have no
                  significance in the interpretation of this Agreement.

         17.5     Except as otherwise provided in this Agreement, the Parties'
                  rights and obligations pursuant to this Agreement are not
                  assignable and/or transferable. The provisions of this Clause
                  are not such as to affect Federmann's right to exercise its
                  right of first refusal as provided in Clause 11 above by
                  means of any third party and/or third parties.

         17.6     In this Agreement any person or entity shall be deemed as
                  holding all the Shares held by it, directly or indirectly
                  and, without prejudice to the generality of the foregoing,
                  all the Shares held, directly or indirectly, by any related
                  entity and by any member of his family, as they are defined
                  in the Securities Law, 5728-1968; and also all the Shares
                  that are held by any person and/or entity that is construed
                  in accordance with the provisions of the Securities Law,
                  5728-1968 as holding Shares of the Company together with that
                  person or entity and also all the Shares held through a
                  trustee and/or registration company,

                                     C-24
<PAGE>

                  and also all the Shares that are held by another shareholder
                  of the Company who is jointly and severally liable with a
                  Party to this Agreement for the obligations pursuant to this
                  Agreement. Nevertheless, a Party to this Agreement shall not,
                  for the purpose of this Agreement, be treated as holding
                  Shares that are held by the other Party to this Agreement.

         17.7     This Agreement shall be governed by the laws of the State of
                  Israel, without taking into account its choice of law rules.
                  Exclusive jurisdiction on all matters relating to this
                  Agreement or deriving herefrom is vested in the competent
                  courts in the City of Tel Aviv-Jaffa and in them alone.

         17.8     Each of the Parties to this Agreement shall bear the legal
                  expenses that it is charged in respect of this Agreement.

         17.9     An obligation to vote by virtue of all of a Party's Shares in
                  the Company in connection with any resolution in any way also
                  includes the obligation to participate in the vote by virtue
                  of all those Shares, and not to vote for any further or other
                  proposed resolution that is such as to contradict, cancel or
                  diminish said resolution.

         17.10    Without being such as to impose any further limitations on
                  the Transfer of Shares other than that expressly provided in
                  this Agreement, each of the Parties undertakes to act in good
                  faith towards the other and not, by act or omission, to cause
                  the frustration of this Agreement's provisions or any of them
                  and/or to make them unrealizable.

         17.11    The Parties hereto may extend any time specified in this
                  Agreement, either once or several times, by written notice
                  signed by two officers of each Party to this Agreement,
                  without any further approval being necessary.

18.      Notices

         18.1     The Parties' addresses for the purpose of this Agreement are
                  as set out in the heading hereto or any other address in
                  Israel of which one Party gives the other written notice.

         18.2     Any notice pursuant to this Agreement shall be in writing and
                  be sent by registered mail or personal delivery by messenger
                  to the address of the relevant Party, as mentioned in Clause
                  18.1 above, and that address shall in all respects in
                  connection with this Agreement also be the address of that
                  Party for the service of court process.

                                     C-25
<PAGE>

         18.3     Notice that is sent shall be treated as having reached the
                  addressee and come to its knowledge within five Business Days
                  if sent by registered mail or, if delivered in person by
                  messenger by 17:00 hours on any Business Day, it shall be
                  treated as received on the Business Day after delivery.


          IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT:


        (signed)                                           (signed)
   --------------------------                     --------------------------
   Koor Industries Ltd.                           Federmann Enterprises Ltd.

                                   (signed)
                          --------------------------
                          Heris Aktiengesellschaft

























                                     C-26
<PAGE>
</TEXT>
</DOCUMENT>
