M-WISE, INC.





                         ISRAEL STOCK OPTION PLAN (2003)
























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                                TABLE OF CONTENTS

1. Preamble.

2. Administration of the Plan.

3. Shares Subject to the Plan.

4. Option Exercise Prices.

5. Exclusivity of the Plan.

6. Grant of the Options and Issuance of the Shares to the Trustee;
   Voting of Shares.

7. Option or Share Purchase Agreement; Termination of Employment.

8. Acceleration of an Option.

9. Term of Options; Exercise.

10. Additional Documents.

11. Taxation.

12. Dividends.

13. Rights and/or Benefits arising out of the Employee/Employer
    Relationship and the Absence of an Obligation to Employ.

14. Adjustments Upon Changes in Capitalization.

15. Term, Termination and Amendment.

16. Effectiveness of the Plan.

17. Release of the Trustee and the Attorney from Liability and Indemnification.

18. Governing Law.



APPENDICES


Appendix A:     Employee's Notice to the Trustee as to Exercise of the Option
                (Section 9.2).

Appendix B:     Notice to the Company of Exercise of the Option by the Trustee
                (Section 9.4).

Appendix C:     Proxy and Power of Attorney (Section 10.2).





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1.     PREAMBLE

       1.1    This plan, as amended from time to time, shall be known as the
              "m-Wise, Inc. Israel Stock Option Plan (2003)" (the "PLAN"). The
              purpose and intent of the Plan is to provide incentives to
              employees, directors, consultants and service providers of the
              Company and/or of subsidiaries and/or of affiliated companies of
              the Company (each a "RELATED COMPANY" and collectively, "RELATED
              COMPANIES") by providing them with the opportunity to purchase
              shares of the Company.

              The Plan is designed to comply with Section 102 of the Israeli
              Income Tax Ordinance (New Version), 1961, as amended from time to
              time, or any provision which may amend or replace it (the
              "ORDINANCE" and "SECTION 102") and the rules, regulations and
              orders or procedures promulgated thereunder from time to time, as
              amended or replaced from time to time (the "RULES"), to designate
              them as either grants made through a trustee or not through a
              trustee and to enable the Company and grantees hereunder to
              benefit from Section 102 and the Rules, and also to enable the
              Company to grant options and issue shares outside the context of
              Section 102. The Company, however, does not warrant that the Plan
              will be recognized by the income tax authorities or that future
              changes will not be made to the provisions of applicable laws,
              rules, regulations or the Rules, which are promulgated from time
              to time, or that any exemption or benefit currently available
              pursuant to Section 102 or otherwise will not be abolished.

       1.2    Should any provision of Section 102, regulations thereunder or the
              Rules which apply to employees or any such other grantees as
              applicable under the provisions of Section 102 and the Rules, be
              amended, such amendment shall be deemed included in the Plan with
              respect to options granted or shares issued in the context of
              Section 102. Where a conflict arises between any section of the
              Plan, the Agreement (as defined in Section 7 below) or their
              application, on the one hand, and the provisions of any tax law,
              rule or regulations, including without limitation the Ordinance
              and/or the Rules, whether relied upon for tax relief or otherwise,
              on the other hand, the latter shall prevail and the Board of
              Directors of the Company (the "BOARD") in its sole discretion
              shall determine the necessary changes to be made to the Plan and
              its determination regarding this matter shall be final and
              binding.

       1.3    In the event the Company's shares should be registered for trading
              on any stock exchange, whether in the United States or elsewhere,
              the options and/or shares allotted in accordance with the Plan may
              be made conditional to any requirement or instruction of the stock
              exchange authorities or of any other relevant authority acting
              pursuant to applicable law as shall exist from time to time. In
              such case, by means of a Board resolution, the Plan and the
              agreements prepared pursuant hereto, may be amended as necessary
              to meet such requirements. In the event of a contradiction between
              any such amendment and the Plan's provisions, the amendment shall
              prevail.




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2.     ADMINISTRATION OF THE PLAN

       2.1    The Plan shall be administered by the Board and/or by any
              committee of the Board so designated by the Board. Any subsequent
              references herein to the Board shall also mean any such committee
              if appointed and, unless the powers of the committee have been
              specifically limited by law or otherwise, such committee shall
              have all of the powers of the Board granted herein. Subject to
              Sections 4 and 15 herein and applicable law and without derogating
              from the generality of the foregoing, the Board shall have plenary
              authority to determine the terms and conditions of all options
              (which need not be identical), including, without limitation, the
              purchase price of the shares covered by each option, the method of
              payment of the exercise price (whether by cash, check, promissory
              note, consideration received by the Company by cashless exercise,
              or any combination of the foregoing), the individuals to whom, and
              the time or times at which, options shall be granted, the number
              of shares to be subject to each option, whether or not an option
              shall be granted pursuant to Section 102, and if so, whether such
              option be granted to a trustee under the Ordinance, the election
              of the "Work Income Route" according to Section 102(b)(1) of the
              Ordinance or the "Capital Gains Route" according to Section
              102(b)(2) of the Ordinance or otherwise when an option can be
              exercised and whether in whole or in installments and to make any
              other elections with respect to the Plan pursuant to applicable
              law. Subject to Section 15, the Board shall have plenary authority
              to construe and interpret the Plan, to prescribe, amend and
              rescind the rules and regulations relating to it and to make all
              other determinations deemed necessary or advisable for the
              administration of the Plan. All determinations and decisions of
              the Board pursuant to the provisions of the Plan and all related
              orders and resolutions of the Board shall be final, conclusive and
              binding on all persons, including the Company, its stockholders,
              grantees and their estates and beneficiaries.

       2.2    Any directive or notice  signed by a member of the Board shall
              constitute  conclusive  proof and authority for every act
              or decision of the Company.

       2.3    No director or officer of the Company shall be personally liable
              or obligated to any grantee as a result of any decision made
              and/or action taken with respect to the Plan or its execution.

3.     SHARES SUBJECT TO THE PLAN

       The shares subject to the Plan shall be shares of Common Stock of the
       Company, par value $0.0017 each (the "COMMON STOCK"). The maximum number
       of shares that may be issued under the Plan is 16,094,106 shares of
       Common Stock, as such number of shares may be adjusted in accordance with
       Section 14. Such shares may be in whole or in part, as the Board shall
       from time to time determine and subject to applicable law, authorized and
       unissued shares of Common Stock or issued and fully paid Common Stock
       which shall have been purchased by the Company or the Trustee (as
       hereinafter defined) hereunder with funds provided by the Company. If any
       option granted under the Plan shall expire, terminate or be canceled for
       any reason without having been exercised in full, such shares subject
       thereto shall again be available for the purposes of the Plan. Any
       increase in the maximum number of shares shall be recommended by the
       Board and shall require the approval of a general meeting of the
       stockholders of the Company, as more fully detailed in Section 15 below.

4.     OPTION EXERCISE PRICES

       The consideration to be paid by a grantee for each share purchased by
       exercising an option (the "OPTION EXERCISE PRICE") shall be as determined
       by the Board in any particular instance of grant.



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       The Board may, in its discretion, grant to the holder of an outstanding
       option, in exchange for the surrender and cancellation of such option, a
       new option having an Option Exercise Price lower than provided in the
       option so surrendered and canceled, and containing such other terms and
       conditions as the Board may prescribe in accordance with the provisions
       of this Plan, provided that such new Option Exercise Price shall not be
       less than the par value of the shares subject to the new option.

5.     EXCLUSIVITY OF PLAN

       Unless otherwise determined by the Board in any particular instance or as
       part of the Agreement, each grantee hereunder will be required to declare
       and agree that all prior agreements, arrangements and/or understandings
       with respect to shares of the Company or options to purchase shares of
       the Company which have not actually been issued or granted prior to
       execution of the Agreement shall be null and void and that only the
       provisions of the Plan and/or the Agreement shall apply. Except and to
       the extent otherwise expressly provided in the Agreement, nothing in the
       Agreement or in the provisions thereof shall derogate from anything
       contained in the Plan.

       Notwithstanding the above, the adoption of this Plan, by itself, shall
       not be construed as amending, modifying or rescinding any incentive
       arrangement previously approved by the Board 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 than under this Plan, and such arrangements
       may be either applicable generally or only in specific cases.

6.     GRANT OF THE OPTIONS AND ISSUANCE OF THE SHARES TO THE TRUSTEE;
       VOTING OF SHARES

       6.1    Shares issued upon exercise of an option shall be issued to the
              grantee or to the Trustee, in the name of the grantee and/or on
              his or her behalf, at the sole discretion of the Board. In the
              event that the Board grants an option to be held by the grantee,
              upon the exercise thereof, unless otherwise provided for in the
              Agreement or by the Board, all rights conveyed to the Trustee
              according to this Plan with respect to shares issued upon the
              exercise of an option shall be awarded to said grantee.

       6.2    The Board shall appoint a trustee for the purposes of this Plan
              (the "TRUSTEE"). The Trustee shall have all the powers provided by
              law, the trust agreement with the Company, Section 102, the Rules
              and the Plan and shall act pursuant to the provisions thereof, as
              they shall apply from time to time. The Company shall pay the
              Trustee a fee as shall be agreed between the Trustee and the
              Company. The Board shall be entitled to replace the Trustee and/or
              to nominate another person to serve as a Trustee in lieu of the
              existing Trustee at its sole discretion, subject to applicable
              law, and that the new Trustee shall have the same powers and
              authority which this Plan grants the Trustee.

       6.3    Unless otherwise determined by the Board, all option awards shall
              be issued by the Company in the name of the Trustee and the share
              certificates representing any shares issued pursuant to options
              exercised hereunder, and all rights deriving from or in connection
              therewith, including, without limitation, any bonus shares
              (including stock dividends) issued in connection therewith, shall
              be issued by the Company in the name of the Trustee in trust for
              the designated grantee and shall be deposited with the Trustee,
              held by him and registered in his name in the register of members





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              of the Company for such period as determined by the Board but, in
              the case of grants pursuant to Section 102, not less than the
              period set forth therein or otherwise required with respect
              thereto pursuant to Israeli law, regulations promulgated
              thereunder or the Rules, as shall be in effect from time to
              time(the " LOCK-UP PERIOD"). Furthermore, options granted or
              shares issued pursuant to Section 102 may not be sold until the
              end of the Lock-up Period, unless otherwise allowed or determined
              by the Israeli tax authorities.

       6.4    Without derogating from the provisions of Sections 6.3 above or
              6.8 below, and unless otherwise determined by the Board generally
              or in any particular instance, the shares issued with respect to
              any options granted hereunder and all rights deriving from or in
              connection therewith including, without limitation, any bonus
              shares (including stock dividend) issued in connection therewith,
              will be held by the Trustee and registered in his name until the
              consummation of the initial underwritten public offering of the
              Company's shares, pursuant to an effective registration statement,
              prospectus or similar document in the USA or such other
              jurisdiction as is determined by the Board (the "IPO"), after
              which time the grantee for whom they are being held may request
              the registration in his name and transfer to him, subject to the
              provisions of Israeli and Delaware law, Section 102, regulations
              promulgated thereunder or the Rules and the Plan all as shall be
              in effect from time to time (e.g., payment of taxes, etc.). After
              the consummation of the IPO, options granted pursuant to Section
              102 will be held by the Trustee for not less than the Lock-up
              Period.

       6.5    Options granted hereunder shall not confer upon the grantee any of
              the rights of a stockholder of the Company with respect to the
              shares subject to such options until such shares are issued upon
              the exercise of the options and transferred and registered in the
              name of the grantee as provided for herein.

       6.6    For as long as any shares are held by the Trustee or registered in
              his name or for as long as the certificates representing any
              shares are held by the Trustee, the Trustee alone shall be
              entitled to receive every notice to which a stockholder is
              entitled, or to demand any information, and any financial and/or
              other report to which a stockholder is entitled from the Company,
              and only he or whomever he shall designate pursuant to the Proxy
              and Power of Attorney referred to and as defined in Section 10.2
              below (the "ATTORNEY"), shall be entitled to exercise every other
              right of the stockholders of the Company, including, without
              limitation, the right to participate in and to vote at all
              stockholders' meetings and to sign any resolution in writing on
              behalf of the shares held by the Trustee or registered in its
              name. No grantee shall be entitled to exercise any of these rights
              as a stockholder of the Company nor make any demand or request of
              the Trustee and/or of the Attorney in this regard for as long as
              the shares are held by the Trustee or registered in the Trustee's
              name.

       6.7    Shares registered in the Trustee's name shall be represented at
              all meetings of stockholders of the Company by the Trustee but
              shall either abstain or be voted in the same manner and proportion
              as the other shares or capital stock represented at the meeting,
              at the Trustee's discretion.

       6.8    Nothing in the aforegoing provisions shall derogate from the power
              of the Board to grant options or to allot shares to the Trustee
              otherwise than under the provisions of Section 102 and the Rules
              or to allot shares or grant options to grantees directly otherwise
              than through the Trustee or on terms which differ from those
              specified above or to approve the transfer of shares from the
              Trustee to the name of any grantee(s) upon such conditions as
              shall be determined by the Board.



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7.     OPTION OR SHARE PURCHASE AGREEMENT; TERMINATION OF EMPLOYMENT

       Unless otherwise determined by the Board, every grantee shall be required
       to sign an option or share purchase agreement or other document as shall
       be determined by the Board, in the form approved by the Board (the
       "AGREEMENT").

       The Agreement need not be identical with respect to each grantee. The
       following terms, however, shall apply to all options, and, mutatis
       mutandis, shares, unless expressly otherwise determined in the Agreement
       or by the Board in respect of a particular option:

       7.1    The Option Exercise Price shall be paid by the grantee to the
              Company no later than the date of exercise of the option..

       7.2    The grantee shall have no right of first refusal to purchase
              shares of the Company which may be offered for sale by
              stockholders of the Company, and shall have no pre-emptive rights
              to purchase shares which are being allotted or shall in the future
              be allotted by the Company, to the extent any such rights
              otherwise exist.

       7.3    The option and/or the right to the option and/or the shares
              thereunder are personal and except insofar as is specified in this
              Plan, and, where applicable, subject to Section 102 and the Rules,
              may not be transferred, assigned, pledged, withheld, attached or
              otherwise charged either voluntarily or pursuant to any law,
              except by way of transfer pursuant to the laws of inheritance, and
              no power of attorney or deed of transfer, whether the same has
              immediate effect or shall take effect on a future date, shall be
              given with respect thereto. During the lifetime of the grantee the
              option may only be exercised by the designated grantee or, if
              granted to the Trustee, by the Trustee on behalf of the designated
              grantee. A note as to the provisions of this sub-section or a
              legend may appear on any document which grants the option and in
              particular in the Agreement, and also on any share certificate.

       7.4    Unless otherwise determined by the Board, the right to exercise
              the option is granted to the Trustee on behalf of the grantee.
              Vesting shall be in installments, gradually over a period of 4
              (four) years from the date of grant of the option or such other
              period or periods as determined by the Board. Unless otherwise
              determined, at the conclusion of each period for the exercise of
              the option as determined in the Agreement ("VESTING PERIODS"), the
              option may, from time to time, be exercised in relation to all the
              shares allocated for that period in such manner that at the end of
              the 1 (one) year from the granting of the option the Trustee
              shall, in the absence of a contrary determination in the
              Agreement, be entitled to exercise on behalf of the grantee and at
              his request 1/4 (quarter) of the options granted by the Company
              and at the end of each three months period thereafter another 1/16
              of options granted, PROVIDED that, unless otherwise determined by
              the Board, upon each of such vesting dates the grantee continues
              to be employed or engaged by, or provide services to, the Company
              or a Related Company on a continual basis from the date of the
              grant thereof.



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              In addition, during each of the Vesting Periods, the option may be
              exercised in relation to all or part of the shares allocated for
              any previous Vesting Period in which the option was not fully
              exercised, provided, subject to the provisions of Section 7.6
              hereof, that at the time of the exercise of the option the grantee
              has continued to be employed or engaged by the Company or a
              Related Company on a continual basis from the date of the grant
              thereof until the date of their exercise. After the end of the
              Vesting Periods and during the balance of the option period, the
              option may be exercised, from time to time, in relation to all or
              part of the shares which have not at that time been exercised and
              which remain subject to the option, subject to the provisions of
              Section 7.6 hereof and to any condition in the Agreement, if such
              exists, which provides a minimum number of shares with respect to
              which the option may be exercised and any provision which
              determines the number of times that the Trustee may send the
              Company notice of exercise on behalf of the grantee in respect of
              the option. The Board shall be entitled at any time to shorten the
              vesting schedule or any Vesting Period.

7.5           The Board may determine, at its sole discretion, that any grantee
              shall be entitled to receive the options or the shares, through
              the Trustee, pursuant to the provisions of this Plan or, subject
              to the provisions Section 102, as applicable, directly in the name
              of the grantee, immediately upon execution of the Agreement or on
              such other date or dates as the Company has undertaken towards
              such grantee. In the event that a grantee is exempt from the
              Vesting Periods (pursuant to the provisions of Section 7.4), the
              Board shall be entitled, subject to applicable law, to determine
              that where the grantee does not comply with the conditions
              determined by the Board or the Agreement or ceases to be an
              employee, director, advisor or a service provider of the Company
              or a Related Company, the Trustee, the Company or a Related
              Company shall have the right to repurchase the shares from the
              grantee for nominal or any other consideration paid by the
              grantee. The Board may set additional conditions to this right of
              repurchase, including without limitation the provision of
              appropriate arrangements for the monies which shall be available
              to the Trustee or a Related Company or others for the purpose of
              the repurchase and conditions with respect to the voting rights of
              the grantee, rights of first refusal or pre-emptive rights to
              purchase shares in the Company, to the extent such rights exist,
              the grantee's right to receive reports or information from the
              Company and the grantee's right to a dividend in respect of shares
              which are subject to a right of reacquisition as aforesaid. For as
              long as the aforegoing conditions of the Board have not been
              complied with or have not lapsed, as applicable, the grantee shall
              not be entitled to sell or charge or transfer in any other manner
              the shares which are subject to the right of reacquisition. As
              security for the compliance with this undertaking, the grantee
              shall deposit the stock certificate evidencing such shares subject
              to the right of reacquisition with the Trustee, who will release
              such share certificate and the shares thereunder to the grantee
              only after the grantee becomes entitled to the shares and the same
              are not subject to any other restrictive condition.



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7.6           TERMINATION OF EMPLOYMENT

              7.6.1.   TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If a
                       grantee ceases to be an employee, director, advisor or
                       service provider of the Company or a Related Company
                       (other than upon death, disability, as provided in
                       Section 7.6.3 below or for Cause (as defined below)) the
                       grantee may exercise his or her options within such



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                       period of time as is specified in the Agreement to the
                       extent that the option is exercisable on the earlier of
                       the date of termination or notice of termination (but in
                       no event later than the expiration of the term of such
                       option as set forth in the Agreement). In the absence of
                       a specified time in the Agreement, the option shall
                       remain exercisable for thirty (30) days following the
                       earlier of such termination or notice of termination (but
                       only to the extent the option is exercisable at the
                       earlier of the date of termination or notice thereof, and
                       not beyond the scheduled expiration date).

              7.6.2    TERMINATION FOR CAUSE. Upon termination for Cause (as
                       such term is defined below), all options held by or on
                       behalf of such grantee shall immediately expire upon the
                       earlier of such termination or notice of termination
                       (unless the Agreement provides otherwise).
                       For purposes hereof, the term "CAUSE" shall mean any of
                       (i) a material breach by the grantee of the grantee's
                       obligations under any agreement with the Company or any
                       Related Company; (ii) the commission by the grantee of an
                       act of fraud or embezzlement against the Company or any
                       Related Company or the willful taking of action injurious
                       to the business or prospects of the Company or any
                       Related Company; (iii) the conviction of the grantee of a
                       felony; and (iv) the grantee's involvement in an act
                       which constitutes breach of trust between the grantee and
                       the Company or any Related Company.

              7.6.3.   DISABILITY / DEATH. If the employment or engagement, as
                       applicable, of a grantee is terminated by reason of
                       death, disability (as determined by the Board in its
                       absolute discretion ("DISABILITY")) or retirement after
                       age 60 with the approval of the Board, the option shall
                       remain exercisable for a period of one (1) year following
                       such termination (but only to the extent exercisable at
                       such termination and not beyond the scheduled expiration
                       date).

              7.6.4.   The Board may determine whether any given leave of
                       absence constitutes a termination of employment or
                       engagement. Options awarded under this Plan shall not be
                       affected by any change of employment or engagement, as
                       applicable, so long as the grantee continues to be an
                       employee, director, advisor or service provider of the
                       Company or a Related Company.

              7.6.5    In such case as Section 102 and the Rules shall apply to
                       any option, where the grantee ceases to be employed or
                       engaged by the Company or a Related Company, as
                       applicable under the provisions of Section 102 and the
                       Rules, prior to the termination of such period as may be
                       prescribed by applicable law, the Ordinance, regulations
                       or the Rules, the exemption provided by Section 102 may
                       not, pursuant to applicable law, apply with respect to
                       that grantee pursuant to the Rules. In such case, the
                       grantee shall be obliged to make arrangements with the
                       tax authorities at his expense for all taxation matters
                       of the options and/or the shares.

              7.6.6    Notwithstanding the foregoing, the Board may in its
                       absolute discretion, extend the period of exercise of the
                       option by a grantee or grantees for such time as it shall
                       determine, either with or without conditions.



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8.            ACCELERATION OF AN OPTION

              In the event the Board (or, if approval of the stockholders is
              required, the stockholders of the Company) shall approve the
              adoption of any plan or proposal for the liquidation or
              dissolution of the Company then, notwithstanding any contrary
              Vesting Periods in any Agreement or in this Plan, and unless in
              each case the applicable Agreement provides otherwise, one-half
              (1/2) of the outstanding options held by or for the benefit of any
              grantee and which have not yet vested shall be accelerated and
              become immediately vested and exercisable.

              Upon the occurrence of a "Significant Event" (as defined below),
              and either (i) the employment or engagement (as applicable) of a
              grantee with the Company or a Related Company is terminated by the
              Company or a Related Company within twelve (12) months thereafter
              (other than for Cause), (ii) a grantee resigns his employment or
              engagement (as applicable) with the Company or with a Related
              Company within such period due to an adverse change in his or her
              position with the Company or a Related Company (as defined in his
              or her employment agreement) or in circumstances which would
              result in such resignation being deemed termination by the Company
              or a Related Company pursuant to Section 11(a) of the Severance
              Pay Law, 1963; or (iii) the surviving corporation in a
              consolidation or merger, referred to in (a) below under
              Significant Event, does not assume the option or substitute it
              with an appropriate option in the surviving corporation; and
              unless in each case the applicable Agreement provides otherwise,
              then all outstanding options held by or for the benefit of any
              such grantee and which have not yet vested shall be accelerated
              and become immediately fully vested and exercisable in full
              (notwithstanding any contrary vesting schedule previously agreed).

              Each of the following shall be a "SIGNIFICANT EVENT": approval by
              the Board or (if approval of the stockholders is required)
              stockholder approval of: (a) any consolidation or merger of the
              Company in which the Company is not the continuing or surviving
              corporation or pursuant to which the Common Stock would be
              converted into cash, securities or other property, other than a
              merger of the Company in which the holders of shares Common Stock
              immediately prior to the merger (on an as-converted basis) have
              the same proportionate ownership of shares of Common Stock (on an
              as-converted basis) of the surviving corporation immediately after
              the merger; or (b) any sale, lease, exchange or other transfer (in
              one transaction or a series of related transactions) of all or
              substantially all the assets of the Company. In addition,
              effective from consummation of the IPO, each of the following
              shall also be considered a "SIGNIFICANT EVENT": any person or
              group other than the Company making a tender offer or exchange
              offer to acquire any shares Common Stock (or securities
              convertible into shares of Common Stock) for cash, securities or
              any other consideration, PROVIDED that: (y) at least a portion of
              such securities sought pursuant to the offer in question is
              acquired; and (z) after consummation of such offer, the person in
              question is the beneficial owner, directly or indirectly, of 20%
              or more of the outstanding Common Stock; or (iii) during any
              period of two consecutive years, individuals who at the beginning
              of such period constituted the entire Board ceasing for any reason
              to constitute a majority thereof unless the election, or the
              nomination for election by the Company's stockholders, of each new
              director was approved by a vote of at least two-thirds (2/3) of
              the directors then still in office who were directors at the
              beginning of the period.



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9.            TERM OF OPTIONS; EXERCISE

              9.1      The term of each option shall be for such period as the
                       Board shall determine, but not more than 8 (eight) years
                       from the date of grant thereof or such shorter period as
                       is prescribed in Section 7.6 hereof.

              9.2      A grantee who desires that the Trustee exercise an option
                       granted to the Trustee on his behalf shall so instruct
                       the Trustee in writing in the form annexed hereto as
                       APPENDIX A or in such other form as shall be approved by
                       the Board from time to time. The notice shall be
                       accompanied by, or specify the arrangements for, payment
                       of the full Option Exercise Price of such shares as
                       provided in the Agreement.

              9.3      As a condition for the exercise of the option, the
                       Company may require that the grantee shall pay, or
                       otherwise make arrangements to the Company's
                       satisfaction, for the payment of the tax and other
                       obligatory payments applicable to him (including all sums
                       payable arising out or in connection with the Company's
                       obligation to deduct tax and other obligatory payments at
                       source) pursuant to applicable law and the provisions of
                       the Plan.

              9.4      Upon receipt of all the requisite documents, approvals
                       and payments from the grantee, including without
                       limitation sufficient proof of payment or other
                       arrangement with respect to the payment of any applicable
                       taxes in form satisfactory to the Company and the
                       Trustee, the Trustee shall deliver a notice to the
                       Company in the form annexed hereto as APPENDIX B or in
                       such other form as shall be approved by the Board. The
                       Company shall allot the shares in the name of the
                       Trustee.

              9.5      A grantee who desires to exercise an option granted
                       directly to him (and not through the Trustee), subject to
                       the approval of the Board, shall so notify the Company in
                       writing in such form as shall be prescribed by the Board
                       from time to time. As a condition for the exercise of the
                       option, the grantee shall pay or otherwise make
                       arrangements, to the Company's satisfaction, for the
                       payment of the tax and other obligatory payments
                       applicable to him (including all sums payable by the
                       Company arising out of its obligation to deduct tax and
                       other obligatory payments at source) pursuant to
                       applicable law and the provisions of the Plan. Upon
                       receipt of all the requisite documents, approvals and
                       payments from the grantee, the Company shall allot the
                       shares in the name of the grantee.

              9.6      Without limiting the foregoing, the Board may, with the
                       consent of the grantee, from time to time cancel all or
                       any portion of any option then subject to exercise, and
                       the Company's obligation in respect of such option may be
                       discharged by: (i) payment to the grantee or to the
                       Trustee on behalf of the grantee of an amount in cash
                       equal to the excess, if any, of the Fair Market Value of
                       the relevant shares at the date of such cancellation
                       subject to the portion of the option so canceled over the
                       aggregate purchase price of such shares; (ii) the
                       issuance or transfer to the grantee or to the Trustee on
                       behalf of the grantee of shares of the Company with a
                       Fair Market Value at the date of such transfer equal to
                       any such excess; or (iii) a combination of cash and
                       shares with a combined value equal to any such excess,
                       all as determined by the Board in its sole discretion.



                                      -12-
<PAGE>


                       For purposes hereof, the "Fair Market Value" of the
                       Common Stock shall mean, as of any date, the last
                       reported sale price, on that date, of the Common Stock of
                       the Company on the principal securities exchange on which
                       such shares are then traded, or, in the event that no
                       sales of such shares took place on such date, the last
                       reported sale price of such shares on such principal
                       securities exchange on the most recent prior date on
                       which a sale of shares took place; provided, however,
                       that if such shares are not publicly traded on the date
                       as of which Fair Market Value is to be determined, "Fair
                       Market Value" of the Common Stock shall mean the value as
                       determined in good faith by the Board.

10.           ADDITIONAL DOCUMENTS

              10.1     Until the consummation of the IPO and whether the option
                       or shares are granted or issued in the name of the
                       Trustee or otherwise, the Company shall have the right to
                       demand from the grantee at any time that the same shall
                       provide, and the grantee shall provide, any certificate,
                       declaration or other document which the Company shall
                       consider to be necessary or desirable pursuant to any
                       law, whether local or foreign (including any undertaking
                       on the part of the grantee not to sell his or her shares
                       during any period which shall be required by an
                       underwriter or investment bank or advisor of the Company
                       for the purpose of any share issue whether private or
                       public and including any certificate or agreement which
                       the Company shall require, if any, from the grantees as
                       members of a class of stockholders), or any certificate,
                       declaration or other document the obtaining of which
                       shall be deemed by the Board to be appropriate or
                       necessary for the purpose of raising capital for the
                       Company of merging the Company with another company
                       (whether the Company is the surviving entity or not), or
                       of reorganization of the Company, including, in the event
                       of a consolidation or merger of the Company or any sale,
                       lease, exchange or other transfer of all or substantially
                       all of the assets or shares of the Company the sale or
                       exchange, as the case may be, of any shares the grantee
                       (or the Trustee on his behalf) may have purchased here
                       under all as shall be deemed necessary or desirable by
                       the Board.

                       As long as the shares and/or the options are registered
                       in the Trustee's name, the same shall be authorized to
                       sign the grantee's name and on his behalf on any of the
                       aforesaid documentation. In the event that the options or
                       Shares have been transferred into the name of the
                       grantee, and he or she has refused to confirm any
                       document required by the Company as aforesaid by placing
                       his or her signature thereon, the Trustee shall be
                       entitled, at the request of the Company, to sign any
                       document in the name of the grantee and on his or her
                       behalf.


              10.2     Without derogating from the generality of the aforesaid
                       and in order to guarantee the aforesaid, and because the
                       rights of the Company and the other stockholders are
                       dependent thereon, the grantee shall, unless otherwise
                       determined by the Board, upon signing the Agreement and
                       as a condition to the grant of any options hereunder,
                       execute the Proxy and Power of Attorney attached hereto
                       as APPENDIX C, or in such other form as shall be approved
                       by the Board from time to time, irrevocably empowering
                       the Trustee and/or the Attorney, until consummation of
                       the IPO, to sign any document and take any action in his
                       name as aforesaid, and the grantee shall have no
                       complaint or claim against the Trustee and/or the
                       Attorney in respect of any such signature or action, or
                       in respect of any determination of the Trustee pursuant
                       hereto, including pursuant to Section 6.6 or to Section
                       10.1 above in respect of such signature. The grantee will
                       authenticate his signature in the presence of a notary if
                       he shall be asked to do so by the Company, in order to
                       give full validity to the said power of attorney.



                                      -13-
<PAGE>


11.           TAXATION

       11.1   GENERAL

              Subject to applicable law, the grantee shall be liable for all
              taxes, duties, fines and other payments which may be imposed by
              any tax authorities (whether in Israel or abroad) and for every
              obligatory payment of whatever source in respect of the options,
              the shares (including, without limitation, upon the grant of the
              options, the exercise of the options, the sale of the shares or
              the registration of the shares in the grantee's name) or dividends
              or any other benefit in respect thereof and/or for all charges
              which shall accrue to the grantee, the Company, any Related
              Company and/or to the Trustee in connection with the Plan, the
              options and/or the shares, or any act or omission by the grantee
              or the Company in connection therewith or pursuant to any
              determination by the applicable tax or other authorities.

       11.2   DEDUCTION AT SOURCE

              The Company (including any Related Company) and/or the Trustee
              shall have the right to withhold or to require the grantee to pay
              an amount in cash or to retain or sell without notice shares of
              Common Stock in value sufficient to cover any tax or obligatory
              payment required by any governmental or administrative authority
              to be withheld or otherwise deducted and paid with respect to the
              options or the shares of Common Stock subject thereto (including,
              without limitation, upon their grant, exercise or sale or the
              registration of the shares of Common Stock in the grantee's name)
              or with respect to dividends or any other benefits in respect
              thereof ("Withholding Tax"), and to make payment (or to reimburse
              itself or himself for payment made) to the appropriate tax or
              other authority of an amount in cash equal to the amount of such
              Withholding Tax. Notwithstanding the foregoing, the grantee shall
              be entitled to satisfy the obligation to pay any Withholding Tax,
              in whole or in part, by providing the Company and/or the Trustee
              with funds sufficient to enable the Company and/or the Trustee to
              pay such Withholding Tax.

       11.3   CERTIFICATE OF AUTHORIZATION OF ASSESSING OFFICER

              The Company (including any Related Company) or the Trustee shall
              at any time be entitled to apply to the Assessing Officer, and in
              the case of a grantee abroad, to any foreign tax authority, for
              receipt of their certificate of authorization as to the amount of
              tax which the Company or any Related Company or the grantee or the
              Trustee is to pay to the tax authorities resulting from granting
              the options or allotting the shares, or regarding any other
              question with respect to the application of the Plan.

12.    DIVIDENDS

              The shares of Common Stock received as a result of the exercise of
              the options shall participate equally with the Company's other
              Common Stock in every cash dividend which shall be declared and
              distributed subject to the following provisions:



                                      -14-
<PAGE>


       12.1   A cash dividend shall be distributed only to persons registered in
              the register of members as stockholders on the record date fixed
              for the distribution of the dividend.

       12.2   A dividend with regard to shares which are registered in the name
              of the Trustee shall be paid to the Trustee, subject to any lawful
              deduction of tax, whether such rate is at the usual rate
              applicable to a dividend or at a higher rate. The Trustee shall
              transfer the dividend to the grantees in accordance with
              instructions that he shall receive from the Company.
              Alternatively, the Company shall be entitled to pay the dividend
              directly to the grantee subject to the deduction of the applicable
              tax.

       12.3   Without derogating from the provisions of Sections 11.2 and 12.2
              hereof, the Company or the Trustee shall be entitled to set off
              and deduct at source from any dividend any sum that the grantee
              owes to the Company (including any Related Company) or the
              Trustee, whether under the Plan or otherwise, and/or any sum that
              the grantee owes to the tax or other authorities.

13.    RIGHTS AND/OR BENEFITS ARISING OUT OF THE EMPLOYEE/ EMPLOYER RELATIONSHIP
       AND THE ABSENCE OF AN OBLIGATION TO EMPLOY

       13.1   Other than with respect to social security payments if required to
              be made by the Company or any Related Company as a result of its
              choice of the tax treatment of the options pursuant to Section
              102, no income or gain which shall be credited to or which
              purports to be credited to the grantee as a result of the Plan,
              shall in any manner be taken into account in the calculation of
              the basis of the grantee's entitlements from the Company or any
              Related Company or in the calculation of any social welfare right
              or other rights or benefits arising out of the employee/employer
              relationship. If, pursuant to any law, the Company or any Related
              Company, shall be obliged for the purposes of calculation of the
              said items to take into account income or gain actually or
              theoretically credited to the grantee, the grantee shall indemnify
              the Company or any Related Company, against any expense caused to
              it in this regard.

       13.2   Nothing in the Plan shall be interpreted as obliging the Company
              or any Related Company to employ or engage the services, as
              applicable, of the grantee and nothing in the Plan or any option
              granted pursuant thereto shall confer upon any grantee any right
              to continue in the employment or the engagement, as applicable, of
              the Company or any Related Company or restrict the right of the
              Company or any Related Company to terminate such employment or
              engagement at any time. The grantee shall have no claim whatsoever
              against the Company or any Related Company as a result of the
              termination of his or her employment or engagement, including,
              without limitation, any claim that such termination causes any
              options to expire and/or prevents the grantee from exercising the
              options and/or from receiving or retaining any shares pursuant to
              any agreement between him or her and the Company, or results in
              any loss due to an imposition, or earlier than anticipated
              imposition, of tax or other liability pursuant to applicable law.



                                      -15-
<PAGE>


14.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

       Notwithstanding any other provisions of the Plan, the Board shall take
       such actions, if any, as it deems appropriate for the adjustment of the
       number and class of shares subject to each unexercised or unvested option
       and in the option prices in the event of an IPO, changes in the
       outstanding share capital of the Company by reason of any stock dividend
       (bonus shares), stock split, recapitalization, combination, exchange of
       shares, merger, consolidation, liquidation, split-up, split-off, spin-off
       or other similar change in capitalization. In the event of any such
       event, the Board may make any adjustments it deems appropriate, including
       in the aggregate number and class of shares available under the Plan, and
       the Board's determination in this regard shall be conclusive.


15.    TERM, TERMINATION AND AMENDMENT

       Unless the Plan shall theretofore have been terminated as hereinafter
       provided, the Plan shall terminate on, and no option shall be granted
       after, the tenth (10th) anniversary of the date the Plan is adopted by
       the Board. The Board may at any time terminate, modify or amend the Plan
       in such respects as it shall deem advisable; PROVIDED, HOWEVER, that,
       without derogating from the provisions of Section 1 or Section 3 above,
       the Board may not, without approval of a general meeting of the
       stockholders of the Company (or by a resolution in writing of the
       stockholders), by the holders of a majority of the outstanding shares of
       capital stock of the Company with voting rights present and voting at a
       duly held meeting at which a quorum is present (or by a resolution in
       writing of the stockholders as aforesaid), increase the maximum number of
       Common Stock as to which options may be granted under the Plan (except by
       adjustment pursuant to Section 14) or extend the termination date of the
       Plan. Options granted prior to termination of the Plan may, subject to
       the terms of the Plan and any Agreement, be exercised thereafter. Without
       derogating from the provisions of Sections 1.2-1.3, unless otherwise
       provided for herein or in the Agreement, any amendment or modification of
       the Plan shall be deemed included in the Plan with respect to options
       granted or shares issued thereunder from time to time, PROVIDED, THAT, no
       amendment or modification of the Plan may, without the consent of the
       grantee to whom any option shall theretofore have been granted, adversely
       affect the rights of such grantee under such option.

16.    EFFECTIVENESS OF THE PLAN

       The Plan shall become effective as of the date determined by the Board.

17.    RELEASE OF THE TRUSTEE AND THE ATTORNEY FROM LIABILITY AND
       INDEMNIFICATION

       In no event shall the Trustee or the Attorney be liable to the Company
       and/or any grantee under the Plan and/or any third party (including
       without prejudice to the generality of the aforegoing, to the income tax
       authorities and any other governmental or administrative authority), or
       to a purchaser of shares from any grantee or the Trustee with respect to
       any act which has been or will be carried out and/or any opinion which
       has been or will be given in relation to the Plan, its execution and any
       matter connected thereto or arising therefrom. The Company will not, and
       the grantee will be required to covenant upon signing the Agreement that
       he will not, make any claim against the Trustee or the Attorney in any
       manner whatsoever and on any ground whatsoever and they expressly agree
       that if the Trustee or the Attorney are sued by them, then the Trustee or
       the Attorney shall be entitled by virtue of this Section alone to apply
       to the court for dismissal of the action against them with costs. The
       Company covenants and agrees that if an action is commenced by any third
       party against the Trustee or the Attorney they shall be entitled, without
       any objection on the Company's part to join the Company as a third party
       to any action and a judgment against them will be paid by the Company.




                                      -16-
<PAGE>


       The Company covenants and the grantee will be required to covenant to
       indemnify the Trustee and/or the Attorney against any liability in
       relation to any claim and/or demand made against the Trustee and/or the
       Attorney by any person whatsoever, including the tax authorities, in
       relation to their acts or omissions in connection with the Plan.

18.    GOVERNING LAW

       The Plan and all instruments issued thereunder shall be governed by and
       construed in accordance with the laws of the State of Israel.






















                                      -17-
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