VALOR
        COMPUTERIZED SYSTEMS LTD.

      


      


      


      


      THE
        2004 SHARE OPTION PLAN

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      


      
        	
                1.

              	
                Name

              


      

      


      This
        Plan, as amended from time to time, shall be known as the Valor Computerized
        Systems Ltd.
        Share Option Plan (the “Option
        Plan”
or
        the
“Plan”).

      


      
        	
                2.

              	
                Purpose
                  of the Option Plan

              


      

      


      The
        Option Plan is intended as an incentive to retain, in the employ and/or service
        of Valor Computerized Systems Ltd. (the “Company”),
        Valor
        Computerized Systems Inc., Valor Computerized System NV, Valor Finland Oy,
        Frontline P.C.B. Solutions Limited Partnership, Valor Computerized Systems
        Japan
        KK, Valor Computerized Systems Far East Limited, Valor Computer Systems GmbH
        and
        e4eNet.com. Inc., and any other subsidiary in which the Company shall hold
        at
        the time of granting an Option, directly or indirectly, no less than 50%
        of the
        voting rights or a Subsidiary of which hereafter is organized or acquired
        by the
        Company (“Subsidiary”),
        persons of training, experience, and ability, to attract new employees,
        directors, consultants or service providers, whose services are considered
        valuable, to encourage the sense of proprietorship of such persons, and to
        stimulate the active interest of such persons in the development and financial
        success of the Company by providing them with opportunities to purchase shares
        in the Company, pursuant to the Option Plan approved by the board of directors
        of the company.

      


      This
        Plan
        is effective with respect to Options granted as of January 1, 2004 and shall
        comply with Amendment no. 132 of the Israeli Tax Ordinance.

      


      Options
        granted under the Plan may or may not contain such terms as will qualify
        such
        options as Incentive Stock Options (“ISOs”)
        within
        the meaning of Section 422 (b) of the United States Internal Revenue Code
        of
        1986, as amended (“the
        Code”).
        Options that do not contain terms as will qualify them as ISOs shall be referred
        to herein as Non-Qualified Stock Options (“NQSOs”).

      


      
        	
                3.

              	
                Definitions

              


      

      


      For
        purposes of the Plan and related documents, including the Option Agreement,
        the
        following definitions shall apply:

      


      
        	 	
                3.1

              	
                “Approved
                  102 Option”
                  means an Option granted pursuant to Section 102(b) of the Ordinance
                  and
                  held in trust by a Trustee for the benefit of the
                  Optionee.

              


      

      


      
        	 	
                3.2

              	
                “Board”
                  means
                  the Board of Directors of the
                  Company.

              


      

      


      
        	 	
                3.3

              	
                “Capital
                  Gain Option (CGO)”
                  as defined in Section 6.4 below.

              


      

      


      
        	 	
                3.4

              	
                “Cause”
                  means, (i) conviction of any felony involving moral turpitude or
                  affecting
                  the Company; (ii) any refusal to carry out a reasonable directive
                  of the
                  chief executive officer, the Board or the Optionee’s direct supervisor,
                  which involves the business of the Company or its affiliates and
                  was
                  capable of being lawfully performed; (iii) embezzlement of funds
                  of the
                  Company or its affiliates; (iv) any breach of the Optionee’s fiduciary
                  duties or duties of care of the Company; including without limitation
                  disclosure of confidential information of the Company;
                  

              


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      and
        (v) any conduct (other than conduct in good
        faith) reasonably determined by the Board to be materially detrimental to
        the
        Company.

       

      
        	 	
                3.5

              	
                “Chairman”
                  means
                  the chairman of the Committee.

              


      

      


      
        	 	
                3.6

              	
                “Committee”
                  means
                  a share option compensation committee appointed by the Board, which
                  shall
                  consist of no fewer than two members of the
                  Board.

              


      

      


      
        	 	
                3.7

              	
                “Companies
                  Law” means
                  the Israeli Companies Law
                  5759-1999.

              


      

      


      
        	 	
                3.8

              	
                “Controlling
                  Shareholder”
                  shall have the meaning ascribed to it in Section 32(9) of the
                  Ordinance.

              


      

      


      
        	 	
                3.9

              	
                “Date
                  of Grant”
                  means, the date of grant of an Option, as determined by the Board
                  and set
                  forth in the Optionee’s Option
                  Agreement.

              


      

      


      
        	 	
                3.10

              	
                “Employee”
                  means a person who is employed by the Company or its Subsidiary,
                  including
                  an individual who is serving as a director or an office holder,
                  but
                  excluding Controlling Shareholder.

              


      

      


      
        	 	
                3.11

              	
                “Exercise
                  Price”
                  means the price for each Share subject to an
                  Option.

              


      

      


      
        	 	
                3.12

              	
                 “Expiration
                  Date”
                  means the date upon which an Option shall expire, as set forth
                  in Section
                  11.2 of the Plan. 

              


      

      


      
        	 	
                3.13

              	
                “Fair
                  Market Value”
                  means as of any date, the value of a Share determined as
                  follows:

              


      

      


      (i)
        If
        the Shares are listed on any established stock exchange or a national market
        system, including without limitation the NASDAQ National Market system, or
        the
        NASDAQ SmallCap Market of the NASDAQ Stock Market, the Fair Market Value
        shall
        be the closing sales price for such Shares (or the closing bid, if no sales
        were
        reported), as quoted on such exchange or system for the last market trading
        day
        prior to time of determination, as reported in the Wall Street Journal, or
        such
        other source as the Board deems reliable.

      


      Without
        derogating from the above, solely for the purpose of determining the tax
        liability pursuant to Section 102(b)(3) of the Ordinance, if at the Date
        of
        Grant the Company’s shares are listed on any established stock exchange or a
        national market system or if the Company’s shares will be registered for trading
        within ninety (90) days following the Date of Grant, the Fair Market Value
        of a
        Share at the Date of Grant
        shall be
        determined in accordance with the average value of the Company’s shares on the
        thirty (30) trading days preceding the Date of Grant or on the thirty (30)
        trading days following the date of registration for trading, as the case
        may
        be;

      


      (ii)
        If
        the Shares are regularly quoted by a recognized securities dealer but selling
        prices are not reported, the Fair Market Value shall be the mean between
        the
        high bid and low asked prices for the Shares on the last market trading day
        prior to the day of determination, or;

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      


      (iii)
        In
        the absence of an established market for the Shares, the Fair Market Value
        thereof shall be determined in good faith by the Board.

      


      
        	 	
                3.14

              	
                “ITA”
                  means
                  the Israeli Tax Authorities.

              


      

      


      
        	 	
                3.15

              	
                “Non-Employee”
                  means
                  a consultant, adviser, service provider, Controlling Shareholder
                  or any
                  other person who is not an
                  Employee.

              


      

      


      
        	 	
                3.16

              	
                “Ordinary
                  Income Option (OIO)”
                  as defined in Section 6.5 below.

              


      

      


      
        	 	
                3.17

              	
                “Option”
                  means an option to purchase one or more Shares of the Company pursuant
                  to
                  the Plan.

              


      

      


      
        	 	
                3.18

              	
                “102
                  Option” means
                  any Option granted to Employees pursuant to Section 102 of the
                  Ordinance.

              


      

      


      
        	 	
                3.19

              	
                “3(i)
                  Option” means
                  an Option granted pursuant to Section 3(i) of the Ordinance to
                  any person
                  who is Non- Employee.

              


      

      


      
        	 	
                3.20

              	
                “Optionee”
                  means a person who receives or holds an Option under the
                  Plan.

              


      

      


      
        	 	
                3.21

              	
                “Option
                  Agreement” means
                  the share option agreement between the Company and an Optionee
                  that sets
                  out the terms and conditions of an
                  Option.

              


      

      


      
        	 	
                3.22

              	
                “Ordinance”
                  means
                  the 1961 Israeli Income Tax Ordinance [New Version] 1961 as now
                  in effect
                  or as hereafter amended.

              


      

      


      
        	 	
                3.23

              	
                “Parent”
                  means any company (other than the Company) in an unbroken chain
                  of
                  companies ending with the Company if, at the time of granting an
                  Option,
                  such company (directly or indirectly), owns stock possessing fifty
                  percent
                  (50%) or more of total combined voting power of all classes of
                  stock in
                  one of the other company in such
                  chain.

              


      

      


      
        	 	
                3.24

              	
                “Section
                  102” means
                  section 102 of the Ordinance as now in effect or as hereafter
                  amended.

              


      

      


      
        	 	
                3.25

              	
                “Share”
                  means the ordinary shares, NIS 0.1 par value each, of the
                  Company.

              


      

      


      
        	 	
                3.26

              	
                “Successor
                  Company” means
                  any entity the Company is merged to or is acquired by, in which
                  the
                  Company is not the surviving
                  entity.

              


      

      


      
        	 	
                3.27

              	
                “Transaction”
                  means
                  (i) merger, acquisition or reorganization of the Company with one
                  or more
                  other entities in which the Company is not the surviving entity,
                  (ii) a
                  sale of all or substantially all of the assets of the
                  Company.

              


      

      


      
        	 	
                3.28

              	
                “Trustee”
                  means
                  any individual appointed by the Company to serve as a trustee and
                  approved
                  by the ITA, all in accordance with the provisions of Section 102(a)
                  of the
                  Ordinance.

              


      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	 	
                3.29

              	
                “Unapproved
                  102 Option”
                  means an Option granted pursuant to Section 102(c) of the Ordinance
                  and
                  not held in trust by a Trustee.

              


      

      


      
        	 	
                3.30

              	
                “Vested
                  Option”
                  means any Option, which has already been vested according to the
                  Vesting
                  Dates.

              


      

      


      
        	 	
                3.31

              	
                “Vesting
                  Dates”
                  means, as determined by the Board or by the Committee, the date
                  as of
                  which the Optionee shall be entitled to exercise the Options or
                  part of
                  the Options, as set forth in section 12 of the
                  Plan.

              


      

      


      
        	
                4.

              	
                Administration
                  of the Option Plan

              


      

      


      
        	 	
                4.1

              	
                The
                  Board or the Committee shall have the power to administer the Option
                  Plan.
                  Notwithstanding the above, the Board shall automatically have a
                  residual
                  authority if no Committee shall be constituted or if such Committee
                  shall
                  cease to operate for any reason
                  whatsoever.

              


      

      


      
        	 	
                4.2

              	
                The
                  Committee shall select one of its members as its Chairman and shall
                  hold
                  its meetings at such times and places as the Chairman shall determine.
                  The
                  Committee shall keep records of its meetings and shall make such
                  rules and
                  regulations for the conduct of its business as it shall deem
                  advisable.

              


      

      


      Any
        member of such Committee shall be eligible to receive Options under the Option
        Plan while serving on the Committee, unless otherwise specified
        herein.

      


      
        	 	
                4.3

              	
                The
                  Committee shall have full power and authority to recommend the
                  Board and
                  the Board shall have the full power and authority
                  to:

              


      

      


      (i)
        designate the participants; (ii) determine the terms and provisions of
        respective Option Agreements (which need not be identical) including, but
        not
        limited to, the number of shares in the Company to be covered by each Option
        Agreement, provisions concerning the time or times when and the extent to
        which
        the Options may be exercised and the nature and duration of restrictions
        as to
        transferability or restrictions constituting substantial risk of forfeiture;
        (iii) acceleration of the right of an Optionee to exercise, in whole or in
        part,
        any previously granted Option; (iv) designate any kind of options; and (v)
        make
        an election as to the type of Approved 102 Option.

      


      The
        Committee shall have full power and authority to:

      


      (i)
        Interpret the provisions and supervise the administration of the Option Plan;
        (ii) Determine the Fair Market Value of the Shares; (iii) Determine any other
        matter, which is necessary or desirable for, or incidental to administration
        of
        the Option Plan.

      


      Notwithstanding
        the above, the Committee shall not be entitled to grant Options to the
        Optionees, however, it will be authorized to issue Shares underlying Options
        which have been granted by the Board and duly exercised pursuant to the
        provisions herein in accordance with section 112(a)(5) of the Companies
        Law.

      


      
        	 	
                4.4

              	
                The
                  Committee shall have the authority to grant, in its discretion,
                  to the
                  holder of an 

              


      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      outstanding
        option, in exchange for the surrender and
        cancellation of such option, a new Option having a Exercise Price equal to,
        lower than or higher than the Exercise Price provided in the Option so
        surrendered and canceled, and containing such other terms and conditions
        as the
        Committee or the Board may prescribe in accordance with the provisions of
        the
        Option Plan.

       

      
        	 	
                4.5

              	
                Subject
                  to the Company’s Articles of Association all decisions and selections made
                  by the Board or the Committee pursuant to the provisions of the
                  Option
                  Plan shall be made by a majority of its members except that no
                  member of
                  the Board or the Committee shall vote on, or be counted for quorum
                  purposes, with respect to any proposed action of the Board or the
                  Committee relating to any Option to be granted to that member.
                  Any
                  decision reduced to writing shall be executed in accordance with
                  the
                  provisions of the Company’s Articles of Association, as the same may be in
                  effect from time to time.

              


      

      


      
        	 	
                4.6

              	
                The
                  interpretation and construction by the Committee of any provision
                  of the
                  Option Plan or of any Option thereunder shall be final and conclusive
                  unless otherwise determined by the
                  Board.

              


      

      


      
        	 	
                4.7

              	
                Subject
                  to the Company’s Articles of Association and the Company’s decision, each
                  member of the Board or the Committee shall be indemnified and held
                  harmless by the Company against any cost or expense (including
                  counsel
                  fees) reasonably incurred by him/her, or any liability (including
                  any sum
                  paid in settlement of a claim with the approval of the Company)
                  arising
                  out of any act or omission to act in connection with the Option
                  Plan
                  unless arising out of such member's own fraud or bad faith, to
                  the extent
                  permitted by applicable law. Such indemnification shall be in addition
                  to
                  any rights of indemnification the member may have as a director
                  or
                  otherwise under the Company's Articles of Association, any agreement,
                  any
                  vote of shareholders or disinterested directors, insurance policy
                  or
                  otherwise.

              


      

      


      
        	
                5.

              	
                Designation
                  of Participants

              


      

      


      
        	 	
                5.1

              	
                The
                  persons eligible for participation in the Option Plan as Optionees
                  shall
                  include any employees (be them currently employed or employees
                  who will be
                  recruited during the life span of the Plan), directors, service
                  providers
                  and consultants of the Company or of any Subsidiary of the Company
                  now
                  exists or hereafter is organized or acquired by the Company; provided,
                  however, that (i) Employees may only be granted 102 Options; (ii)
                  Non-Employees may only be granted 3(i) Options; and (iii) Controlling
                  Shareholders may only be granted 3(i)
                  Options.

              


      

      


      
        	 	
                5.2

              	
                The
                  grant of an Option hereunder shall neither entitle the recipient
                  thereof
                  to participate nor disqualify him/her from participating in, any
                  other
                  grant of Options pursuant to this Option Plan or any other option
                  or stock
                  plan of the Company or any of its Subsidiaries and
                  affiliates.

              


      

      


      
        	 	
                5.3

              	
                Notwithstanding
                  anything in the Option Plan to the contrary, all grants of Options
                  to
                  directors and office holders shall be authorized and implemented
                  only in
                  accordance with the provisions of the Companies Law, as in effect
                  from
                  time to time, and any other applicable
                  law.

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                6.

              	
                Designation
                  of Options Pursuant To Section
                  102

              


      

      


      
        	 	
                6.1

              	
                The
                  Company may designate Options granted to Employees pursuant to
                  Section 102
                  as Unapproved 102 Options or Approved 102
                  Options.

              


      

      


      
        	 	
                6.2

              	
                The
                  grant of Approved 102 Options shall be made under this Plan adopted
                  by the
                  Board as described in Section 15 below, and shall be conditioned
                  upon the
                  approval of this Plan by the ITA.

              


      

      


      
        	 	
                6.3
                  

              	
                Approved
                  102 Option may either be classified as Capital Gain Option (“CGO”)
                  or Ordinary Income Option (“OIO”).

              


      

      


      
        	 	
                6.4

              	
                Approved
                  102 Option elected and designated by the Company to qualify under
                  the
                  capital gain tax treatment in accordance with the provisions of
                  Section
                  102(b)(2) shall be referred to herein as CGO.

              


      

      


      
        	 	
                6.5

              	
                Approved
                  102 Option elected and designated by the Company to qualify under
                  the
                  ordinary income tax treatment in accordance with the provisions
                  of Section
                  102(b)(1) shall be referred to herein as OIO.

              


      

      


      
        	 	
                6.6

              	
                The
                  Company’s election of the type of Approved 102 Options as CGO or OIO
                  granted to Employees (the “Election”),
                  shall be appropriately filed with the ITA before the Date of Grant
                  of an
                  Approved 102 Option. Such Election shall become effective beginning
                  the
                  first Date of Grant of an Approved 102 Option under this Plan and
                  shall
                  remain in effect until the end of the year following the year during
                  which
                  the Company first granted Approved 102 Options. The Election shall
                  obligate the Company to grant only
                  the type of Approved 102 Option it has elected, and shall apply
                  to all
                  Optionees who were granted Approved 102 Options during the period
                  indicated herein, all in accordance with the provisions of Section
                  102(g)
                  of the Ordinance. For the avoidance of doubt, such Election shall
                  not
                  prevent the Company from granting Unapproved 102 Options
                  simultaneously.

              


      

      


      
        	 	
                6.7
                  

              	
                All
                  Approved 102 Options must be held in trust by a Trustee, as described
                  in
                  Section 7 below.

              


      

      


      
        	 	
                6.8

              	
                For
                  the avoidance of doubt, the designation of Unapproved 102 Options
                  and
                  Approved 102 Options shall be subject to the terms and conditions
                  set
                  forth in Section 102 of the Ordinance and the regulations promulgated
                  thereunder.

              


      

      


      
        	 	
                6.9

              	
                With
                  regards to Approved 102 Options, the provisions of the Plan and/or
                  the
                  Option Agreement shall be subject to the provisions of Section
                  102 and the
                  Tax Assessing Officer’s permit, and the said provisions and permit shall
                  be deemed an integral part of the Plan and of the Option Agreement.
                  Any
                  provision of Section 102 and/or the said permit which is necessary
                  in
                  order to receive and/or to keep any tax benefit pursuant to Section
                  102,
                  which is not expressly specified in the Plan or the Option Agreement,
                  shall be considered binding upon the Company and the
                  Optionees.

              


      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	
                7.

              	
                Trustee

              


      

      


      
        	 	
                7.1

              	
                Approved
                  102 Options which shall be granted under the Plan and/or any Shares
                  allocated or issued upon exercise of such Approved 102 Options
                  and/or
                  other shares received subsequently following any realization of
                  rights,
                  including without limitation bonus shares, shall be allocated or
                  issued to
                  the Trustee and held for the benefit of the Optionees for such
                  period of
                  time as required by Section 102 or any regulations, rules or orders
                  or
                  procedures promulgated thereunder (the “Holding
                  Period”).
                  In the case the requirements for Approved 102 Options are not met,
                  then
                  the Approved 102 Options may be treated as Unapproved 102 Options,
                  all in
                  accordance with the provisions of Section 102 and regulations promulgated
                  thereunder. 

              


      

      


      
        	 	
                7.2
                  

              	
                Notwithstanding
                  anything to the contrary, the Trustee shall not release any Shares
                  allocated or issued upon exercise of Approved 102 Options prior
                  to the
                  full payment of the Optionee’s tax liabilities arising from Approved 102
                  Options which were granted to him and/or any Shares allocated or
                  issued
                  upon exercise of such Options.

              


      

      


      
        	 	
                7.3
                  

              	
                With
                  respect to any Approved 102 Option, subject to the provisions of
                  Section
                  102 and any rules or regulation or orders or procedures promulgated
                  thereunder, an Optionee shall not sell or release from trust any
                  Share
                  received upon the exercise of an Approved 102 Option and/or any
                  share
                  received subsequently following any realization of rights, including
                  without limitation, bonus shares, until the lapse of the Holding
                  Period
                  required under Section 102 of the
                  Ordinance.

              


      

      


      
        	 	
                7.4
                  

              	
                Upon
                  receipt of Approved 102 Option, the Optionee will sign an undertaking
                  to
                  release the Trustee from any liability in respect of any action
                  or
                  decision duly taken and bona fide executed in relation with the
                  Plan, or
                  any Approved 102 Option or Share granted to him
                  thereunder.

              


      

      


      
        	
                8.

              	
                Shares
                  Reserved for the Option Plan; Restriction
                  Thereon

              


      

      


      
        	 	
                8.1

              	
                The
                  Company has reserved 809,000 (eight hundred and nine thousand)
                  authorized
                  but unissued Shares, for the purposes of the Plan and for the purposes
                  of
                  any other share option plan which may be adopted by the Company
                  in the
                  future, subject to adjustment as set forth in Section 10 below.
                  Any Shares
                  which remain unissued and which are not subject to the outstanding
                  Options
                  at the termination of the Plan shall cease to be reserved for the
                  purpose
                  of the Plan, but until termination of the Plan the Company shall
                  at all
                  times reserve sufficient number of Shares to meet the requirements
                  of the
                  Plan. Should any Option for any reason expire or be canceled prior
                  to its
                  exercise or relinquishment in full, the Shares subject to such
                  Option may
                  again be subjected to an Option under the Plan or under the Company’s
                  other share option plans.

              


      

      


      
        	 	
                8.2

              	
                Each
                  Option granted pursuant to the Plan, shall be evidenced by a written
                  Option Agreement between the Company and the Optionee, in such
                  form as the
                  Board or the Committee shall from time to time approve. Each Option
                  Agreement shall state a number of the Shares to which the Option
                  relates
                  and the type of Option granted thereunder (whether a CGO, OIO,
                  Unapproved
                  102 Option or a 3(i) Option or any other
                  kind).

              


      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	 	
                8.3

              	
                All
                  Shares issued upon exercise of the Options shall entitle the holder
                  thereof to receive dividends and other distributions
                  thereon.

              


      

      


      
        	 	
                8.4

              	
                With
                  regard to employees who are subject to the United States jurisdiction,
                  the
                  Option Agreement shall state a number of the Shares to which the
                  Option
                  relates and the type of Option granted thereunder (whether an ISO
                  or an
                  NQSO). Notwithstanding the foregoing, no ISO may be granted to
                  an employee
                  in any calendar year if, as the result of such grant, the aggregate
                  fair
                  market value (determined as of the time each Option was granted)
                  of the
                  Shares for which such Optionee has been granted ISO’s under all plans of
                  the Company and any parent, affiliate and subsidiary during that
                  year
                  would exceed $100,000, except and to the extent that the options
                  shall
                  have accumulated over a period in excess of one year. In the event
                  an
                  Optionee receives an Option intended to be an Incentive Stock Option
                  which
                  is subsequently determined not to comply with the requirements
                  of the Code
                  for Incentive Stock Options, the Option shall be amended, if necessary,
                  in
                  accordance with applicable Treasury Regulations and rulings to
                  preserve,
                  as the first priority, to the maximum possible extent, the status
                  of the
                  Option as an ISO (as defined in the Code) and to preserve, to the
                  maximum
                  possible extent, the number of shares subject to the Option. ISOs
                  or
                  portions thereof which exceed such $100,000 limit (according to
                  the order
                  in which they were granted) shall be treated as
                  NQSOs.

              


      

      


      
        	
                9.

              	
                Exercise
                  Price

              


      

      


      
        	 	
                9.1

              	
                The
                  exercise price of each Share subject to an Option shall be determined
                  by
                  the Committee in its sole and absolute discretion in accordance
                  with
                  applicable law, subject to any guidelines as may be determined
                  by the
                  Board from time to time. Each Option Agreement will contain the
                  Exercise
                  Price determined for each Optionee.

              


      

      


      
        	 	
                9.2

              	
                The
                  Exercise Price shall be payable upon the exercise of the Options
                  in a form
                  satisfactory to the Committee and in a case of 102 Options conforming
                  to
                  the requirements of Section 102. The Optionee shall be allowed
                  to pay the
                  said consideration by cheque or in cash, denoted in U.S. Dollar
                  or in New
                  Shekels in converted into New Shekels in accordance with the
                  representative rate of the U.S. Dollar published by the bank of
                  Israel as
                  known on the date in which the Exercise Notice will be served to
                  the
                  company. The Committee shall have the authority to postpone the
                  date of
                  payment on such terms as it may
                  determine.

              


      

      


       


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
        An
          employee who is subject to the United States jurisdiction, and he/she is
          a “Ten
          Percent Shareholder” (as defined below) shall not be granted an ISO unless the
          Exercise Price of such ISO is at least one hundred ten percent (110%) of
          the
          Fair Market Value of the Shares at the Date Of Grant and the ISO is not
          exercisable after the expiration of five (5) years from the Date Of
          Grant.

        


        “Ten
          Percent Shareholder”
-
          a
          person who owns (or is deemed to own pursuant to Section 424(d) of the
          Code)
          shares possessing more than ten percent (10%) of the total combined voting
          power
          of all classes of shares of the Company or of any of its
          affiliates.

        


        An
          employee who is subject to the United States tax laws, and he/she is not
          a Ten
          Percent Shareholder as defined in this section 9.2, shall not be granted
          an ISO
          unless the Exercise Price of such ISO is at least equal to the Fair Market
          Value.

         

      

      
        	
                10.

              	
                Adjustments

              


      

      


      Upon
        the
        occurrence of any of the following described events, Optionee's rights to
        purchase Shares under the Plan shall be adjusted as hereafter
        provided:

      


      
        	 	
                10.1

              	
                In
                  the case of a change in the Company’s share capital structure (including a
                  consolidation or split of shares), adjustments shall be made to
                  the number
                  of shares deriving from the exercise of the Options and of the
                  Exercise
                  Price required.

              


      

      


      
        	 	
                10.2

              	
                In
                  the case of an issue of bonus shares by the Company, The Optionee
                  shall be
                  entitled to receive, at the time of their exercise - in addition
                  to the
                  shares deriving from exercise of the Options, and without further
                  payment
                  - shares in the number to which he/she would have been entitled
                  to if
                  he/she had exercised his/her option on the eve of the date determining
                  the
                  issuance of the bonus shares.

              


      

      


      
        	 	
                10.3

              	
                Where
                  the shareholders of the Company are offered rights to purchase
                  any
                  securities of the Company, the Company is required to also offer
                  identical
                  rights to the Optionee who have not yet exercised the Options on
                  the date
                  of determining the right to acquire them and which they are entitled
                  to
                  exercise, as if the Optionee had exercised their Options on the
                  eve of the
                  date determining the right to participate in the said acquisition,
                  provided however that the Committee, in its sole discretion shall
                  determine whether to allow the Optionee to enjoy any other benefit
                  deriving from the said offer of securities rather than the right
                  to
                  purchase it in its fair market
                  value.

              


      

      


      
        	 	
                10.4

              	
                The
                  Company shall furnish written notice to the Optionee regarding
                  any
                  proposal presented for approval in connection with the Company’s
                  liquidation. Each Optionee shall be entitled to give notice in
                  writing of
                  his/her wish to be considered as though he/she had exercised the
                  Options
                  (including also, acceleration and exercise of the Options for shares
                  which
                  could not yet otherwise have been exercised) no later than 7 days
                  prior to
                  adopting the resolution of liquidation. The validity of such Optionee’s
                  notice is subject to attaching by him/her of the Exercise Price
                  for the
                  Exercise Shares (this sum shall be returned to the Optionee in
                  case the
                  liquidation resolution shall not in the end be
                  adopted).

              


      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
        


        In
          the
          event that the Options are not exercised for shares, they shall be cancelled
          forthwith prior to the date of executing the liquidation, and shall be
          invalid
          and shall not vest any right whatsoever in the owner thereof.

        


        
          	 	
                  10.5

                	
                  In
                    the event of Transaction, the unexercised Options shall be substituted
                    by
                    equally ranking options of the Successor Company (or a parent
                    or
                    subsidiary of the Successor Company) as were distributed to the
                    shareholders of the Company in connection and with respect to
                    the
                    Transaction. In the case of such assumption and/or substitution
                    of
                    Options, appropriate adjustments shall be made to the Exercise
                    Price, and
                    any other required changes, so as to reflect such action and
                    all other
                    terms and conditions of the Option Agreements shall remain unchanged,
                    including but not limited to the vesting schedule, all subject
                    to the
                    determination of the Committee or the Board, which determination
                    shall be
                    in their sole discretion and final. The Company shall notify
                    the Optionee
                    of the Transaction in such form and method as it deems applicable
                    at least
                    fourteen (14) days prior to the effective date of such
                    Transaction.

                


        

         

      

      
        	 	
                10.6

              	
                Notwithstanding
                  the above and subject to any applicable law, the Board or the Committee
                  shall have full power and authority to determine that in certain
                  Option
                  Agreements there shall be a clause instructing that, if in any
                  such
                  Transaction as described in section 10.5 above, the Successor Company
                  (or
                  parent or subsidiary of the Successor Company) does not agree to
                  assume or
                  substitute for the Options, the Vesting Dates shall be accelerated
                  so that
                  any unvested Option or any portion thereof shall be immediately
                  vested as
                  of the date which is fourteen (14) days prior to the effective
                  date of the
                  Transaction.

              


      

      


      
        	 	
                10.6

              	
                For
                  the purposes of section 10.5 above, an Option shall be considered
                  assumed
                  or substituted if, following the Transaction, the Option confers
                  the right
                  to purchase or receive, for each Share underlying an Option immediately
                  prior to the Transaction, the consideration (whether shares, options,
                  cash, or other securities or property) received in the Transaction
                  by
                  holders of shares held on the effective date of the Transaction
                  (and if
                  such holders were offered a choice of consideration, the type of
                  consideration chosen by the holders of a majority of the outstanding
                  shares); provided, however, that if such consideration received
                  in the
                  Transaction is not solely ordinary shares (or their equivalent)
                  of the
                  Successor Company or its parent or subsidiary, the Committee may,
                  with the
                  consent of the Successor Company, provide for the consideration
                  to be
                  received upon the exercise of the Option to be solely ordinary
                  shares (or
                  their equivalent) of the Successor Company or its parent or subsidiary
                  equal in Fair Market Value to the per Share consideration received
                  by
                  holders of a majority of the outstanding shares in the Transaction;
                  and
                  provided further that the Committee may determine, in its discretion,
                  that
                  in lieu of such assumption or substitution of Options for options
                  of the
                  Successor Company or its parent or subsidiary, such Options will
                  be
                  substituted for any other type of asset or property including cash
                  which
                  is fair under the circumstances.

              


      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
        


        
          	 	
                  10.5

                	
                  The
                    Optionee acknowledges that should the Company's shares be further
                    offered
                    in any future time to the public in any public market and/or
                    further
                    registered for trading in any public market and/or once the Company’s
                    shares are delisted from trading and/or removed from registration
                    at a
                    public market (including the Stock Exchange) and the Company
                    becomes once
                    again a private Company, his/her right to sell his/her Shares
                    may be
                    subject to some limitations, as set forth in accordance with
                    the law
                    and/or by the Company’s underwriters and/or the Articles of Association of
                    the Company (as may be varied from time to time) and/or the Company’s
                    resolutions. The Optionee unconditionally agrees to any such
                    limitations.

                


        

         


        Moreover,
          in the event the Company shall become a private company an Optionee who
          exercised his/her options shall use any and all of his/her powers as a
          shareholder (including, but not limited to, in any shareholder’s meeting and/or
          in any case in which his/her voice/vote/support is requested and/or may
          be
          operated) to support and vote in favor of all decisions taken and/or
          recommendations proposed by the Board, including, but not limited to, any
          decision to merge with other company(ies) and/or sale of the Company’s assets to
          any other entity and/or issue/sell the Company’s shares to the public and/or
          registering its shares as whole or in part to an exchange or any other
          trade
          venue, and an irrevocable proxy in this respect to the person or persons
          designated by the Board shall be deemed as given by the Optionee who exercised
          his/her Option. Without derogating from the above, and if the Optionee
          is so
          requested, he/she approves to further execute any power of attorney for
          the
          effect of the aforesaid in this paragraph.
 


      
        	
                11.

              	
                Term
                  and Exercise of
                  Options

              


      

      


      
        	 	
                11.1

              	
                Options
                  shall be exercised by the Optionee by giving written notice to
                  the Company
                  and/or to any third party designated by the Company (the “Representative”),
                  in such form and method as may be determined by the Company and
                  when
                  applicable, by the Trustee in accordance with the requirements
                  of Section
                  102, which exercise shall be effective upon receipt of such notice
                  by the
                  Company and/or the Representative and the payment of the Exercise
                  Price at
                  the Company’s or the Representative’s principal office. The notice shall
                  specify the number of Shares with respect to which the Option is
                  being
                  exercised.

              


      

      


      
        	 	
                11.2

              	
                Options,
                  to the extent not previously exercised, shall terminate forthwith
                  upon the
                  earlier of: (i) the date set forth in the Option Agreement; and
                  (ii) the
                  expiration of any extended period in any of the events set forth
                  in
                  section 11.5 below.

              


      

      


      
        	 	
                11.3

              	
                The
                  Options may be exercised by the Optionee in whole at any time or
                  in part
                  from time to time, to the extent that the Options become vested
                  and
                  exercisable, prior to the Expiration Date, and provided that, subject
                  to
                  the provisions of section 11.5 below, the Optionee is employed
                  by or
                  providing services to the Company or any of its Subsidiaries, at
                  all times
                  during the period beginning with the granting of the Option and
                  ending
                  upon the date of exercise.

              


      

      


      
        	 	
                11.4

              	
                Subject
                  to the provisions of section 9.3 below, in the event of termination
                  of the
                  Optionee’s employment and/or services with the Company or a Subsidiary of
                  the 

              


      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

        
           

          Company
            or a Parent Company or a successor company or
            a subsidiary of such successor company issuing or assuming the options
            in a
            Transaction , all Options granted to him/her will immediately expire.
            A notice
            of termination of employment and/or services by either the Company or
            the
            Optionee shall be deemed to constitute termination of employment and/or
            service.
            For the avoidance of doubt, in case of such termination of employment
            or
            service, the unvested portion of the Optionee’s Option shall not vest and shall
            not become exercisable.

           

          
            	 	
                    11.5

                  	
                    Notwithstanding
                      anything to the contrary hereinabove and unless otherwise determined
                      in
                      the Optionee’s Option Agreement, an Option may be exercised after the date
                      of termination of Optionee's employment or service with the
                      Company or any
                      Subsidiary during an additional period of time beyond the date
                      of such
                      termination, but only with respect to the number of Vested
                      Options at the
                      time of such termination according to the Vesting Dates:

                  


          

           

        

      

      (i) In
        the
        event that the Optionee ceases to be employed by the Company (other than
        as a
        result of death or disability as defined below), he/she shall be entitled,
        until
        the end of a period of ninety (90) days from the termination date of his/her
        term of employment, and in any case by no later than the end of the relevant
        Expiration Date. 

      


      (ii) Notwithstanding
        the aforesaid, where the Optionee was dismissed in circumstances in which
        he/she
        is not entitled to severance payment, as stated in the Severance Pay Law,
        5723-1963, and/or with Cause, all the Options granted to him/her pursuant
        to
        this Plan and the Option Agreement and which were not exercised for shares,
        shall expire. In such event of the resignation or dismissal of the Optionee,
        the
        day of sending the letter of resignation to the employer or on the day of
        sending the letter of dismissal to the employee, as the case may be, shall
        be
        deemed, for the purpose of this Plan, as the termination of his/her employment
        by the Company, regardless of the actual date on which the employment was
        terminated.

      


      (iii) In
        the
        event of the termination of employment of the Optionee as a result of a
        Disability, the Optionee shall have the a right, until the end of a period
        of 12
        months from the date of terminating his/her term of employment and in any
        event,
        no later than the Expiration Date, to exercise that portion of the Options
        allotted to him/her which may be exercised pursuant to this Agreement until
        the
        end of the term of his/her employment.

      


      In
        this
        section: “Disability”
-
        the
        inability of the Optionee to fulfill his/her position as a result of an injury
        and/or illness for a continued period of at least six months.

      


      In
        the
        event of the death of The Optionee during the period of his/her employment
        by
        the Company, the estate or heirs of such Optionee shall be granted the right
        -
        until the end of a period of 12 months from the date of the Entitled Employee’s
        death, and in any case no later than the Expiration Date - to exercise that
        portion of the Options allotted to the Optionee and which may be exercised
        pursuant to this Plan until the date of his/her death.

      


      For
        the
        avoidance of any doubt, a transfer of an employee from one position held
        in the


       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      
        Company
          or in any of its Subsidiaries to a different position in the Company or
          its
          Subsidiaries, or a transfer between different subsidiaries of the Company
          (including a transfer between the Company and any of its Subsidiaries)
          shall not
          be deemed as cessation of employment.

        


        
          	 	
                  11.6

                	
                  To
                    avoid doubt, the holders of Options shall not have any of the
                    rights or
                    privileges of shareholders of the Company in respect of any Shares
                    purchasable upon the exercise of any part of an Option, nor shall
                    they be
                    deemed to be a class of shareholders or creditors of the Company
                    for
                    purpose of the operation of sections 350 and 351 of the Israeli
                    Companies
                    Law or any successor to such section until registration of the
                    Optionee as
                    holder of such Shares in the Company’s register of shareholders (or as
                    long as the Company is listed on the Frankfurt Stock Exchange
                    the
                    registration of the Optionee as holder of such Shares in a Nominee
                    Company) upon exercise of the Option in accordance with the provisions
                    of
                    the Plan, but in case of Options and Shares held by the Trustee,
                    subject
                    to the provisions of Section 7 of the
                    Plan.

                


        

         

      

      
        
          	
                	11.7     
                    	
                  Any
                    form of Option Agreement authorized by the Option Plan may contain
                    such
                    other provisions as the Committee may, from time to time, deem
                    advisable.
                    Without limiting the foregoing, the Committee may, from time
                    to time
                    cancel all or any of the Options then subject to exercise and
                    at its sole
                    discretion may decide to, but is not obligated to, replace such
                    cancelled
                    Options by any means it may deem
                    fit.

                


        

      

      


      
        	 	
                11.8

              	
                With
                  respect to Unapproved 102 Option, if the Optionee ceases to be
                  employed by
                  the Company or any Subsidiary, the Optionee shall extend to the
                  Company
                  and/or its Subsidiary a security or guarantee, which shall be determined
                  by the Company, for the payment of tax due at the time of sale
                  of Shares,
                  all in accordance with the provisions of Section 102 and the rules,
                  regulation or orders promulgated
                  thereunder.

              


      

      


      12.    
        Vesting

      


      
        	 	
                12.1

              	
                Subject
                  to the provisions of the Plan, each Option shall vest following
                  the
                  Vesting Dates and for the number of Shares as shall be provided
                  in the
                  Option Agreement. However, no Option shall be exercisable after
                  the
                  Expiration Date.

              


      

      


      
        	 	
                12.2

              	
                An
                  Option may be subject to such other terms and conditions on the
                  time or
                  times when it may be exercised, as the Committee may deem appropriate.
                  The
                  vesting provisions of individual Options may
                  vary.

              


      

      


      
        	
                13.

              	
                Dividends

              


      

      


      With
        respect to all Shares (in contrary to unexercised Options) issued upon the
        exercise of Options purchased by the Optionee and held by the Optionee or
        by the
        Trustee, as the case may be, the Optionee shall be entitled to receive dividends
        in accordance with the quantity of such Shares subject to the provisions
        of the
        Company’s Articles of Association (and all amendments thereto), and subject to
        any applicable taxation on distribution of dividends, and when applicable
        subject to the provisions of Section 102 and the rules, regulations or orders
        promulgated thereunder.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      
        


        
          	
                  14.

                	
                  Assignability
                    and Sale of Options

                


        

        


        
          	 	
                  14.1

                	
                  No
                    Option, purchasable hereunder, whether fully paid or not, shall
                    be
                    assignable, transferable or given as collateral or any right
                    with respect
                    to them given to any third party whatsoever, and during the lifetime
                    of
                    the Optionee each and all of such Optionee's rights to purchase
                    Shares
                    hereunder shall be exercisable only by the
                    Optionee.

                


        

        


        Any
          such
          action shall result in the immediate expiration of the option.

        


        
          	 	
                  14.2

                	
                  As
                    long as the Shares are held by the trustee in favor of the Optionee,
                    than
                    all rights the last possesses over the Shares are personal, can
                    not be
                    transferred, assigned, pledged or mortgaged, other than by will
                    or laws of
                    descent and distribution.

                


        

         

      

      
        	
              	14.3 
                	
                Employees
                  who are subject to the United States jurisdiction shall be further
                  subject
                  to the following provisions:

              


      

      


      An
        ISO as
        well as a NQSO shall not be transferable (by the Optionees in case of ISO)
        except by will or laws of descent and distribution, and during an Optionee's
        lifetime shall be exercisable only by that Optionee. Notwithstanding the
        foregoing, the Optionee, by delivering a written notice to the Company, in
        a
        form satisfactory to the Company, designate a third party who, in the event
        of
        the death of the Optionee, shall thereafter be entitled to exercise the
        Option.

      


      
        	
                15.

              	
                Term
                  of the Option Plan

              


      

      


      The
        Option Plan shall be effective as of the day it was adopted by the Board
        and
        shall terminate at the end of ten years from such day of adoption.

      


      
        	
                16.

              	
                Amendments
                  or Termination

              


      

      


      The
        Board
        may at any time, but after consultation with the trustee, amend, alter, suspend
        or terminate the Plan. No amendment, alteration, suspension or termination
        of
        the Plan shall impair the rights of any Optionee, unless mutually agreed
        otherwise between the Optionee and the Committee, which agreement must be
        in
        writing and signed by the Optionee and the Company. Termination of the Plan
        shall not affect the Committee’s ability to exercise the powers granted to it
        hereunder with respect to Options granted under the Plan prior to the date
        of
        such termination.

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      


      
        	
                17.

              	
                Government
                  Regulations

              


      

      


      The
        Option Plan, and the granting and exercise of the Option thereunder, and
        the
        Company's obligation to sell and deliver Shares or cash under the Option,
        shall
        be subject to all applicable laws, rules and regulations, whether of the
        State
        of Israel, the United States, Germany or any other State having jurisdiction
        over the Company and the Optionee, including the registration of the Shares
        under the United States Securities Act of 1933, and the Ordinance and to
        such
        approvals by any governmental agencies or securities exchanges as may required.
        Nothing herein shall be deemed to require the Company to register the shares
        under the United States Securities Act of 1933 or under the securities law
        of
        any other jurisdiction.

      


      
        	
                18.

              	
                Continuance
                  of Employment

              


      

      


      Neither
        the Option Plan nor the Option Agreement with the Optionee shall impose any
        obligation on the Company or a Subsidiary thereof, to continue any Optionee
        in
        its employ and/or service, and nothing in the Option Plan or in any Option
        granted pursuant thereto shall confer upon any Optionee any right to continue
        in
        the employ and/or service of the Company or a Subsidiary thereof or restrict
        the
        right of the Company or a Subsidiary thereof to terminate such employment
        and/or
        service at any time.

      


      
        	
                19.

              	
                Governing
                  Law & Jurisdiction

              


      

      


      This
        Option Plan shall be governed by and construed and enforced in accordance
        with
        the laws of the State of Israel applicable to contracts made and to be performed
        therein, without giving effect to the principles of conflict of laws. The
        competent courts of Tel-Aviv Israel shall have sole jurisdiction in any matters
        pertaining to this Option Plan.

      
         

      

      
        	
                20.

              	
                Tax
                  Consequences

              


      

      


      
        	 	
                20.1

              	
                Any
                  tax consequences arising from the grant or exercise of any Option,
                  from
                  the payment for Shares covered thereby or from any other event
                  or act (of
                  the Company and/or its Subsidiaries, the Trustee or the Optionee),
                  hereunder, shall be borne solely by the Optionee. The Company may
                  require
                  an Optionee, as a condition of exercising an Option, to pay or
                  otherwise
                  provide for any withholding or other taxes that may be imposed
                  with
                  respect to such Option or provide an approval satisfactory to the
                  Company
                  stating that no tax obligations shall be imposed on the Company
                  with
                  respect to such Option. The Company and/or its Subsidiaries and/or
                  the
                  Trustee shall withhold taxes according to the requirements under
                  the
                  applicable laws, rules, and regulations, including withholding
                  taxes at
                  source. Furthermore, the Optionee shall agree to indemnify the
                  Company
                  and/or its Subsidiaries and/or the Trustee and hold them harmless
                  against
                  and from any and all liability for any such tax or interest or
                  penalty
                  thereon, including without limitation, liabilities relating to
                  the
                  necessity to withhold, or to have withheld, any such tax from any
                  payment
                  made to the Optionee.

              


      

      


      
        	 	
                20.2

              	
                The
                  Company and/or, when applicable, the Trustee shall not be required
                  to
                  release any Share certificate to an Optionee until all required
                  payments
                  have been fully made.

              


      

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

      
        	
                21.

              	
                Non-Exclusivity
                  of the Option Plan

              


      

      


      The
        adoption of the Option Plan by the Board shall not be construed as amending,
        modifying or rescinding any previously approved incentive arrangements or
        as
        creating any limitations on the power of the Board to adopt such other incentive
        arrangements as it may deem desirable, including, without limitation, the
        granting of Options otherwise then under the Option Plan, and such arrangements
        may be either applicable generally or only in specific cases.

      


      For
        the
        avoidance of doubt, prior grant of options to Optionees of the Company under
        their employment agreements, and not in the framework of any previous option
        plan, shall not be deemed an approved incentive arrangement for the purpose
        of
        this section.

      


      
        	
                22.

              	
                Multiple
                  Agreements

              


      

      


      The
        terms
        of each Option may differ from other Options granted under the Option Plan
        at
        the same time, or at any other time. The Board may also grant more than one
        Option to a given Optionee during the term of the Option Plan, either in
        addition to, or in substitution for, one or more Options previously granted
        to
        that Optionee.


      


      


      *        *        *

      
        
          
          

        

        
          17