____________________________________________

    


    


    VALOR
      COMPUTERIZED SYSTEMS LTD.

    


    


    


    

      THE
        2005 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, 2005 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 sufficient amount of shares 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.


            


    

     

    
      	
            	10.7	
              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

        
          

        

      

      
        
        

      

    

     

    
      	
            	10.8	
              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. 

            


    

     

    Notwithstanding
      anything to the contrary herein, an Optionee shall not be entitled to exercise
      Options and the Company shall not be obliged to issue Shares in respect of
      Options, in the following instances:

     

    
      	
            	(i)	
              between
                the 25th
                of
                the last month of each quarter until the end of one business day
                following
                the Company’s announcement for the financial results of the said
                quarter;

            


    

     

    
      	
            	(ii)	
              four
                (4) business days prior to the date prescribed by the Board for
                eligibility for receiving dividends, and four (4) further business
                days
                prior to the date for eligibility for receiving dividends approved
                by the
                shareholders meeting of the
                Company;

            


    

     

    
      	
            	(iii)	
              any
                period of time declared by the Board or the Committee, provided that
                (a) a
                ten (10) days advance notice is given; and (b) such periods declared
                pursuant to this sub-section (iii) do not exceed an aggregate of
                fourteen
                (14) business days per annum.

            


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
            	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 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


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    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
      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.

            


    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    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.       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 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      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.
        

       

    

    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

            


    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    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.

            


    

     

    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