MERGERS AND ACQUISITION ENGAGEMENT AGREEMENT


         MERGERS AND ACQUISITION ENGAGEMENT AGREEMENT, effective as of October
1, 1998, by and between Speech Design GmbH, a German corporation (the
"Company"), and Helix Capital Services Inc ("Helix"), successor by merger to
Helix Capital Services LLC.

                              W I T N E S S E T H :

         WHEREAS, Helix has been acting as the Company's principal financial
advisor since June 1, 1998; and

         WHEREAS, the Company and Helix desire to memorialize their
understanding regarding the services to be provided by Helix to the Company and
its subsidiaries.

         NOW, THEREFORE, in consideration of the mutual premises contained
herein, the parties hereby agree as follows:


1.       PROPOSED SERVICES

         1.1      Financial Advisory Services.

                  1.1.1.            Helix will act as the principal financial
                                    advisor to the Company and its subsidiaries
                                    and affiliates, and will assist the Company
                                    in identifying, introducing, analyzing,
                                    structuring, negotiating, and effecting the
                                    Transactions (as defined below), on the
                                    terms and conditions of this Agreement set
                                    forth below. In connection with services
                                    relating to the Transactions, Helix will
                                    assist and consult with the Company on
                                    strategic, financial and operational issues
                                    and tactical implementation of concepts
                                    relating to the growth of the Company.

                  1.1.2.            Yoav Stern, and other professionals of
                                    Helix, will devote significant time, as
                                    needed, to participate in meetings, lead
                                    strategic planning sessions, initiate and
                                    help in recruiting key personnel and advise
                                    management on operational issues in growth
                                    and/or turnaround situations.

                  1.1.3.            As used herein, the term "Transaction" shall
                                    mean (i) any transaction or series of
                                    transactions (other than the purchase or
                                    sale of assets in the ordinary course of
                                    business) whereby, directly or indirectly,
                                    the Company acquires, or the Company or any
                                    of its assets or properties is acquired by,
                                    or merges with or into another entity, or
                                    any other similar business transaction or
                                    arrangement between the Company or any of
                                    its subsidiaries and affiliates and a third
                                    party, including, without limitation, a
                                    merger, combination or consolidation,
                                    regardless of the accounting or tax
                                    treatment of such transaction (each, a "M&A
                                    Transaction"), and (ii) any




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                                    transaction or series of transactions (other
                                    than senior debt financing, and transactions
                                    with banking institutions arranged by the
                                    Company's management in the ordinary course
                                    of business) whereby, directly or
                                    indirectly, the Company or any of its
                                    subsidiaries or affiliates receives
                                    additional capital or debt financing or
                                    markets additional equity other than through
                                    a public offering (each, a "Capital
                                    Transaction").

                  1.1.4.            Other Activities. Helix will undertake
                                    certain activities on the Company's behalf,
                                    including, if appropriate, the following:

                           1.1.4.1.         Identifying and introducing
                                            acquisition opportunities;

                           1.1.4.2.         Assisting the Company in its
                                            determination of appropriate values
                                            to be realized in Transactions;

                           1.1.4.3.         Advising the Company in the
                                            negotiations as to the form and
                                            structure of Transactions;

                           1.1.4.4.         Advising and assisting the Company's
                                            management in making presentations
                                            to the Company's Board of Directors
                                            about Transactions;

                           1.1.4.5.         In addition to advising on any
                                            Transactions, rendering such other
                                            financial advisory and merchant
                                            banking services as may from time to
                                            time be agreed in writing between
                                            Helix and the Company.

2.       FURTHER AGREEMENT TERMS

         2.1.     Transaction Timing. A Transaction shall be deemed to have
                  occurred when Consideration Paid (as defined below) for a
                  Transaction has been received by the Company or the Company's
                  shareholders or, in the event of a merger, acquisition,
                  purchase by the Company, Consideration Paid has been sent to
                  the receiving party, provided that if Consideration Paid shall
                  be paid in installments, the full amount will be construed to
                  have been received upon receipt of the first installment
                  exchanged between parties to a Transaction.

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         2.2.     Limitation and Exclusivity.

                  2.2.1.            The Company agrees that as of the date
                                    hereof Helix shall be the exclusive advisor
                                    to the Company with respect to M&A
                                    Transactions and the Company shall not enter
                                    into any agreement relating to an M&A
                                    Transaction during the term of this
                                    Agreement without the participation of
                                    Helix; provided, however, the Company may
                                    retain another person or entity (a "Finder")
                                    to introduce to the Company a business for
                                    the purpose of consummating a M&A
                                    Transaction. The Company may reduce Helix's
                                    fees with respect to such transaction to the
                                    extent set forth in paragraph 2.3.3.1
                                    hereof. If the Company consummates a M&A
                                    Transaction during the term of this
                                    Agreement (or for a period of one year
                                    thereafter as described below) without
                                    Helix's participation, the Company agrees
                                    that it, and its successors and assigns,
                                    shall nevertheless be obligated to provide
                                    or cause to be provided to Helix, the
                                    compensation provided in paragraph 2.3.3.1
                                    hereof.

                  2.2.2.            With respect to Capital Transactions, the
                                    Company's obligation to retain Helix is
                                    subordinate to existing agreements with
                                    investment banking firms relating to private
                                    debt or equity financing. In addition, the
                                    Company retains the right to engage an
                                    investment banking firm to assist it in
                                    arranging any Capital Transaction, provided
                                    that the Company will notify Helix in
                                    writing 15 days prior to entering into such
                                    an agreement with an investment banking
                                    firm. No fee will be payable to Helix
                                    pursuant to this Agreement with regard to
                                    any Capital Transaction arranged by such
                                    investment banking firm unless a fee-
                                    sharing agreement is reached between such
                                    firm, the Company and Helix.

         2.3.     Compensation. The Company will compensate Helix in the form of
                  a retainer, success fees and reimbursement of its reasonable
                  expenses as described below. Fees will be paid directly to
                  Helix or to another entity as designated from time to time by
                  Helix.

                  2.3.1.            Retainer. The Company will pay Helix a
                                    monthly retainer in the amount of $10,000
                                    during the term of this Agreement.

                  2.3.2.            Consideration Paid. For the purpose of this
                                    Agreement, Consideration Paid is defined as:

                           2.3.2.1.         In the event of a sale by the
                                            Company of newly issued securities,
                                            the amount of cash invested in the
                                            Company.

                           2.3.2.2.         In the event of a sale, merger or
                                            acquisition of the Company or the
                                            Company's assets, the cash
                                            consideration (including amounts
                                            paid into escrow) plus the fair
                                            

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                                            market value of non-cash
                                            consideration paid by the acquiror,
                                            plus the amount of debt and other
                                            interest bearing obligations
                                            assumed, refinanced, retired, or
                                            defeased by the acquiror, less any
                                            cash obtained by the acquiror upon
                                            successful completion of the
                                            Transaction.

                                         
                           2.3.2.3.         In the event of a purchase, merger
                                            or acquisition of another entity or
                                            another entity's assets by the
                                            Company, the cash consideration
                                            (including amounts paid in escrow)
                                            plus the fair market value of
                                            non-cash consideration paid by the
                                            Company, plus the amount of debt and
                                            other interest bearing obligations
                                            assumed or refinanced by the
                                            Company, in connection with the
                                            Transaction.

                           2.3.2.4.         The fair market value of any
                                            non-cash consideration delivered in
                                            a Transaction will be the value
                                            agreed upon by the Company and Helix
                                            prior to the consummation of the
                                            Transaction.

                  2.3.3.            Success fees:

                           2.3.3.1.         With respect to a M&A Transaction,
                                            the Company shall pay Helix a
                                            success fee upon closing of each M&A
                                            Transaction. Success fees for each
                                            M&A Transaction shall be determined
                                            by mutual agreement between Helix
                                            and the Company based on market
                                            conditions, but in no event will be
                                            less than 2% of the Consideration
                                            Paid; provided, however, that if
                                            with respect to any given M&A
                                            Transaction, a Finder introduces to
                                            the Company a business and such
                                            introduction results in a M&A
                                            Transaction, any success fees due
                                            Helix may be reduced by the amount
                                            of the fees the Company is obligated
                                            to pay to such Finder; provided,
                                            further, that if all or any portion
                                            of such fees to be paid to such
                                            Finder are not actually paid when
                                            due, such fees or portion thereof,
                                            as applicable, shall be paid to
                                            Helix at that time. Success fees
                                            shall be due and payable if the
                                            Company completes a M&A Transaction
                                            during the term of this Agreement
                                            and within one year of the
                                            termination of this Agreement with a
                                            party introduced to the Company by
                                            Helix in connection with this
                                            Agreement. This success fee will be
                                            paid in cash, or in other negotiable
                                            securities and financial instruments
                                            as specifically agreed in writing by
                                            Helix and the Company, but in any
                                            case, if agreement is not reached,
                                            the success fee will be paid in the
                                            same consideration as paid or
                                            received by the Company.

                           2.3.3.2.         With respect to a Capital
                                            Transaction, the Company and Helix
                                            will reach an agreement on a success
                                            

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                                            fee for each specific Capital
                                            Transaction if and when the Company
                                            instructs Helix to proceed with
                                            arranging for such Capital
                                            Transaction.

                  2.3.4.            Expenses. The Company shall reimburse Helix,
                                    upon Helix's request and regardless of
                                    whether the Company consummates any
                                    Transactions, for its reasonable and actual
                                    out of pocket expenses incurred by it in
                                    connection with this Agreement. In no event,
                                    however, shall the Company be liable to
                                    Helix for out-of-pocket expenses in excess
                                    of $3,750 per month without the prior
                                    approval of the Company.

         2.4.     Information and Reliance. In connection with Helix's
                  engagement, the Company will furnish Helix with all
                  information concerning the Company which Helix and the Company
                  deem appropriate and will provide Helix with necessary and
                  reasonable access to the Company's officers, directors,
                  accountants and counsel. It is understood that Helix will rely
                  on the accuracy and completeness of such information supplied
                  by the Company, its authorized officers and agents, or
                  available from generally recognized public sources, without
                  any independent investigation or verification thereof.

         2.5.     Confidentiality. During the term of this Agreement, the
                  Company, on the one hand, and Helix, on the other hand, will
                  have access to and become acquainted with advice, data,
                  materials, contacts or other information provided by one party
                  to the other, including the existence of this Agreement
                  (collectively, the "Confidential Information"). Each party
                  hereto agrees to treat the Confidential Information of the
                  other party confidentially and agrees not to disclose
                  Confidential Information of the other party other than (i) to
                  its employees, attorneys, affiliates, representatives and
                  agents to whom disclosure is necessary in order to carry out
                  the terms of the engagement, and (ii) if, in the reasonable
                  opinion of legal counsel, such disclosure is legally required.
                  Both parties shall take all precautions reasonably necessary
                  to maintain the confidentiality of the Confidential
                  Information of the other party, it being understood, however,
                  that a copy of this Agreement may be filed with the U.S.
                  Securities and Exchange Commission and its terms be described
                  in the Company's public filings.

                  2.5.1.            Notwithstanding the foregoing, the following
                                    shall not be Confidential Information: (a)
                                    information generally available to the
                                    public, or which is published or becomes
                                    public; (b) information which a party can
                                    show was in its possession at the time it
                                    was disclosed and which was not acquired
                                    directly or indirectly from the disclosing
                                    party, and (c) information rightfully
                                    acquired from others who did not obtain it
                                    under a pledge of confidentiality to a party
                                    hereto.

                  2.5.2.            Each party hereto covenants and agrees that
                                    is shall not misuse or misappropriate any of
                                    the Confidential Information of the other
                                    party. Each party acknowledges and agrees
                                    that Confidential Information of each party
                                    constitutes trade secrets and that the other
                                    party will obtain no

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                                    ownership interest therein. Upon termination
                                    of Helix's engagement with the Company, or
                                    whenever requested by the other party, each
                                    of the Company and Helix shall immediately
                                    deliver to the other all property in its
                                    possession or under its control belonging to
                                    the other party or containing any
                                    Confidential Information of the other party.

                  2.5.3.            The parties acknowledge and agree that the
                                    restrictions contained in this Agreement, in
                                    view of the nature of the respective
                                    businesses of the parties hereto, are
                                    reasonable and necessary in order to protect
                                    their legitimate interests and that any
                                    violation thereof would result in
                                    irreparable injuries to the other parties.
                                    The parties agree that in addition to any
                                    other rights or remedies which the other
                                    party may be entitled to at law or in
                                    equity, the other party shall be entitled to
                                    obtain injunctive relief from any court of
                                    competent jurisdiction and reimbursement of
                                    any costs and expenses, including, without
                                    limitation, attorneys' fees and expenses,
                                    incurred in connection with the enforcement
                                    of this Section 2.5.

         2.6.     Indemnification. The Company agrees to indemnify and hold
                  Helix harmless from and against any and all losses, claims,
                  damages and liabilities (or actions including security holder
                  actions in respect thereof) related to or arising out of
                  Helix's engagement hereunder or its role in connection
                  herewith, and will reimburse Helix for all reasonable expenses
                  (including reasonable counsel fees and expenses) as they are
                  incurred by Helix in connection with investigating, preparing
                  for or defending any such action or claim, whether or not in
                  connection with pending or threatened litigation in which
                  Helix is a party and whether or not initiated by or on behalf
                  of the Company. The Company will not, however, be responsible
                  for any claims, liabilities, losses, damages or expenses that
                  have resulted from the willful misconduct or gross negligence
                  of Helix. The Company also agrees that Helix shall not have
                  any liability to the Company for or in connection with Helix's
                  engagement, except for liability for losses, claims, damages,
                  liabilities or expenses incurred by the Company that result
                  from the willful misconduct or gross negligence of Helix.

                  2.6.1.            In the event that the foregoing indemnity is
                                    unavailable, then the Company shall
                                    contribute to amounts paid or payable by
                                    Helix in respect of its losses, claims,
                                    damages and liabilities:

                           2.6.1.1.         in such proportion as appropriately
                                            reflects the relative benefits
                                            received by, the Company and Helix
                                            in connection with the matters as to
                                            which such losses, claims, damages
                                            or liabilities relate, or

                           2.6.1.2.         if (but only if) the allocation
                                            provided for in 2.6.1.1 is for any
                                            reason held to unenforceable, in
                                            such proportion as is appropriate to
                                            reflect not only the relative
                                            benefits referred to in 2.6.1.1 but
                                            also the relative fault of the
                                            Company and Helix, as well as any
                                            other relevant equitable
                                            considerations;


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                           2.6.1.3.         provided, however, that in no event
                                            shall the amount to be contributed
                                            by Helix exceed the amount of the
                                            fee actually received by Helix. The
                                            foregoing shall be in addition to
                                            any rights that Helix may have at
                                            common law or otherwise and shall
                                            extend upon the same terms to and
                                            inure to the benefit of Helix and
                                            its affiliates and their respective
                                            directors, officers, employees,
                                            agents or controlling persons of
                                            Helix.

                           2.6.1.4.         The Company agrees that, without
                                            Helix's prior written consent, it
                                            will not settle, compromise or
                                            consent to the entry of any judgment
                                            in any pending or threatened claim,
                                            action, or proceeding in respect of
                                            which indemnification could be
                                            sought under the indemnification
                                            provisions of this Agreement
                                            (whether or not Helix or any other
                                            party is an actual or potential
                                            party to such claim, action or
                                            proceeding), unless such settlement,
                                            compromise or consent includes an
                                            unconditional release of each
                                            indemnified party from all liability
                                            arising out of such claim, action or
                                            proceeding.

         2.7.     Limited Commitment. It is understood that Helix makes no
                  commitment to raise capital and/or effect any of the
                  Transactions. In addition, the Company has the right not to
                  accept any or all offers with respect to the Transactions.

         2.8.     Term and termination. This Agreement shall have a term
                  commencing on July 1, 1997 and extending through December 1,
                  2000, which term may be further extended by the mutual consent
                  of both parties. Notwithstanding the foregoing, the provisions
                  of paragraphs 2.3, 2.5 and 2.6 hereof will survive any
                  termination of the Agreement.

         2.9.     Governing Law. This agreement shall be governed by and
                  construed in accordance with the laws of the State of New
                  York, without giving effect to conflicts of laws. Any
                  controversy or claim arising out of or relating to this letter
                  agreement, other than as provided for in Section 2.5 herein,
                  shall be settled by arbitration in accordance with the rules
                  of the American Arbitration Association, and judgment upon an
                  award arising in connection therewith may be entered in any
                  court of competent jurisdiction.

         
         2.10.    Survival. In the event that any provision herein is determined
                  to be enforceable under the current law at the time of
                  execution of this Agreement, or unenforceable under a law that
                  may supersede that law in place at the time of execution, all
                  other
                           

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<PAGE>
                  provisions and the intent of this Agreement shall survive such
                  findings.

         2.11.    Independent Contractor. The Company acknowledges and agrees
                  that Helix has been retained solely as a mergers and
                  acquisitions and financial advisor to the Company. In such
                  capacity, Helix shall act as an independent contractor.

         2.12.    Waiver of Rights. No provision of this Agreement may be
                  modified, waived or discharged unless such waiver,
                  modification or discharge is agreed to in writing by the party
                  against whom the same is sought to be enforced and no failure
                  by either party to enforce any of this rights hereunder shall,
                  except as aforesaid, be deemed to be a waiver of such right.
                  No waiver by either party hereto at any time of any breach by
                  the other party hereof of, or compliance with, any provision
                  of this Agreement to be performed by such other party shall be
                  deemed to be a waiver of a similar or dissimilar provision
                  hereof at the same or any prior or subsequent time.

         2.13.    Notices. Any notice required or permitted to be given under
                  this Agreement shall be in writing and shall be properly given
                  if delivered personally, mailed prepaid registered mail,
                  overnight courier, or sent by telecopy (as long as the
                  telecopy is followed by a hard copy) addressed as follows:

                           In the case of Helix:
                           Helix Capital Services LLC
                           98 Battery Street, Suite 600
                           San Francisco, CA 94104
                           Attn:  Mr. Ogen Perry
                           Fax:  (415) 956-9951

                           and

                           Helix Capital Services LLC
                           850 Third Avenue
                           10th Floor
                           New York, New York  10022
                           Attn:  Mr. Yoav Stern
                           Fax:  (212) 935-3882


                                                     
                           In the case of the Company:
                           Speech Design GmbH
                           Industriestrasse 1
                           D-82110 Gemering
                           Germany
                           Attn:  Kasimir Arciszewski
                           Fax:  011-49-89-8942-4659

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                           With a copy to:

                           McDermott, Will & Emery
                           50 Rockefeller Plaza
                           New York, NY 10019
                           Attn:  Cheryl V. Reicin, Esq.
                           Fax:  (212) 547-5444

                  or to such other address as the parties shall from time to
                  time specify by notice given in accordance herewith. Any
                  notice so given shall be conclusively deemed to have been
                  given or made on the day of delivery, if delivered, if mailed
                  by registered mail, upon the date shown on the postal return
                  receipt as the date upon which the envelope containing such
                  notice was actually received by the addressee, if delivered by
                  overnight courier, two (2) days after deposit with the
                  overnight courier, and if by telecopy, upon transmission
                  thereof, as long as the telecopy is followed by delivery of a
                  hard copy.

         2.14.    Entire Agreement. This mutually signed Agreement, attached
                  Exhibits and any properly executed and signed Amendments,
                  constitute the entire agreement between the parties with
                  respect to the engagement of Helix contemplated hereby and
                  cancels and superseded all prior understandings and agreements
                  between the parties with respect thereto and no agreements or
                  representations, oral or otherwise, express or implied, with
                  respect to the subject matter hereof have been made by either
                  party which are not expressly set forth in this Agreement.

3.       Miscellaneous. Each of this Agreement. This Agreement may be executed
         in any number of counterparts; each of which shall be deemed to be an
         original and all of which together shall be deemed to be the same
         agreement.


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IN WITNESS WHEREOF, the parties hereto have set their hand on January __, 1999.


                                                     HELIX CAPITAL SERVICES, LLC


                                                     By: /s/ Ogen Perry  
                                                        ---------------
                                                     Name:  Ogen Perry
                                                     Title:  Secretary



                                                     SPEECH DESIGN GMBH


                                                     By: /s/ Kasimir Arciszewski
                                                         -----------------------
                                                     Name:  Kasimir Arciszewski
                                                     Title:

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