SUMMARY OF PROPOSED TERMS SERIES A PREFERRED SHARES Reporty Homeland Security Ltd. Deeember-January , 24142015 We are happy to confirm our interest, subject to all terms and conditions herein, to explore the possibility of an investment in Reporty Homeland Security Ltd. This letter summarizes the principal terms of a proposed investment for Preferred A Shares. Except as specifically provided herein, this letter is not intended to be a legally binding agreement but is a statement of intent. It is presented solely for the purpose of discussion. Company Reporty Homeland Security Ltd., an Israeli company (the "Company"). Founders Amir Elichai, Alexander Dizengoff, Yoni Yitzon & Lital Leshem Investor An entity under the control of Mr. Ehud Barak (the "Investor"). Structure of Financing The Investor shall invest in the Company up to an aggregate amount of US$ 1,500,000 (the "Investment Amount"), against issuance by the Company of Preferred Shares at the Closing (as such terms are defined below) for the entire Investment Amount at a price per share of [ 1 ("PPS") (representing a pre-money valuation of USS 3,338,71 BASIS FOR THIS VALI: VTION?II was based fol a ce n flea° a o between Ehud and the Company where the parties agreed that the said $1.5M investment will provide (25%+6%=)31% shareholdin(, on a Fully Diluted Basis (as defined below)) so that immediately following the Closing, Investor will hold not less than f31.0%j IA GREATER PERCEN I AGE OWNERSHIP UP FRONT, RATHER THAN REQUIRING ANOTHER $3.5MNI INVESTMENT To GAIN A CONTROLLING INTEREST( (Naturally your sultan w ET= if could ge agreed:Wit seems an excessive reqtWst at this po nt From a commercial point of view we thought that if the Company will not do well, Investor still has its liquidation preference and if Company will flourish Investor has its right (not obligation) to increase its holding and gain control through the Warrants. We believe this would be a soften req