Re Agreement

RNS Number:4639Z
Technoplast Industries Ld
07 June 2004

                                                     R. YOHAY & CO., LAW OFFICES

                                  TOP  TOWER,  50, DIZENGOFF ST., TEL AVIV 64332
          FAX:  [phone]      e-mail: [e-mail]   TEL:  [phone]  



ROBERT YOHAY

                                                                      GILL RIMON
                                                              EYNAT BRETSHNAIDER

Tel Aviv, 24 May 2004


                          
The London Stock Exchange
Company Announcements Section
Fax: [phone]




Dear Sir,


            RE:       Technoplast Industries Ltd - Immediate report


Technoplast Industries Ltd. (hereinafter: "the Company") has announced to the
Tel Aviv Stock Exchange and to the Israeli Securities Authority, as an immediate
report, that during the evening hours of 23 May 2004, the Company's board of
directors approved the Company's entering into a new manufacturing agreement
with ZAG Industries Ltd. (hereinafter: "ZAG"), pursuant to which ZAG undertook
to transfer the manufacturing of at least 30% of the goods manufactured for ZAG
in Israel by the plastics injection method (whether manufactured by ZAG itself
or by subcontractors) and no less than the manufacture equivalent of US$ 9
million annually at agreed upon prices, to the Company.



The manufacturing agreement shall be in effect for a period of 10 years
commencing at the date of signing of the said agreement. Notwithstanding the
above, after a period of 4 years from the signing of the said agreement, each of
the parties shall be entitled bring the agreement to its termination by sending
the other party 12 months notice of the intent to terminate the agreement. Such
other party shall be entitled to prolong the above 12 month period by an
additional 12 months (24 months in total).



In addition, the Company's board of directors approved the Company's entering
into an additional agreement between the Company, ZAG and a limited partnership
in which Technoplast Investments (1993) Ltd. shall be the unlimited partner and
the Company shall be a single limited partner (hereinafter: "the Partnership"),
pursuant to which the partnership shall exclusively manufacture and market
worldwide some of ZAG's agreed upon products and some of the Company's agreed
upon products (hereinafter: "the Partnership's Products")



The Partnership shall purchase manufacturing services from the Company at agreed
upon prices and shall appoint ZAG as its exclusive marketing representative in
North America for agreed upon consideration.



The marketing of the Partnership's Products to other countries shall be
performed by the Partnership itself, in accordance with the Partnerships
discretion.



The above agreement shall be in effect for a period of 2 years from the date of
its signing and shall be automatically renewed for additional periods of 2
years, unless one of the parties notifies the other party, prior to any date of
renewal, of its intent to terminate the agreement at the time of renewal, by
sending the other party 3 months prior notice. Such other party shall be
entitled to prolong the above 3 month period by an additional 3 months (6 months
in total).



The above agreements are subject to the approval of the Israeli Competitive
Restrictions commissioner by 15 August 2004. In the event that such approval is
not received by such date, the above agreements shall expire.



The above agreements are separate and independent.



ZAG is the Company's primary client, whose purchases from the Company in 2003
amounted to NIS 37 million and NIS 43 million in 2002. ZAG is owned by The
Stanley Works corporation whose shares are listed for trade on the New York
Stock Exchange.




                                Yours Sincerely,





                                Gill Rimon, Adv.
                          R. Yohay & Co., Law Offices




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