Document:

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                                                                    EXHIBIT 10.1

                        LAKARO BIOPHARMACEUTICALS, INC.

                            1999 SHARE OPTION PLAN

     1.   Purposes of the Plan.  The purposes of this Share Option Plan are to
          --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business. Options
granted under this Plan may or may not contain such terms as will qualify the
Options as Incentive Share Options ("ISOs") within the meaning of Section 422(b)
of the United State Internal Revenue Code of 1986, as amended (the "Code").
Options granted under this Plan will be designated for tax purposes as
determined by the Administrator at the time of the grant in accordance with
Applicable Laws.

     2.   Definitions.  As used herein, the following definitions and the
          -----------
definitions set forth in Section 1 above shall apply.

               (a)  "Administrator" means the Board or any of its Committees as
                     -------------
shall be administering the Plan, in accordance with Section 4 hereof.

               (b)  "Applicable Laws" means the requirements relating to the
                     ---------------
administration of share option plans under U.S. state corporate laws, U.S.
federal and state securities laws, U.S. tax laws, the stock exchange or
quotation system on which the shares are listed or quoted and the applicable
laws of any country or jurisdiction where the shares are registered or options
are granted under the Plan.

               (c)  "Board" means the Board of Directors of the Company or of
                     -----
any Parent or Subsidiary of the Company.

               (d)  "Committee" means a committee of Directors appointed by the
                     ---------
Board in accordance with Section 4 hereof.

               (e)  "Company" means Lakaro Biopharmaceuticals, Inc., a
                     -------
corporation under the laws of the State of Delaware.

               (f)  "Consultant" means any person who is engaged by the Company
                     ----------
or any Parent or Subsidiary to render consulting or advisory services to such
entity.

               (g)  "Director" means a member of the Board.
                     --------

               (h)  "Employee" means any person, including officers of the
                     --------
Company (within the meaning of the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder), and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, any Parent, any Subsidiary, or any successor.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
<PAGE>

          (i)  "Fair Market Value" means, as of any date, the value of a Share
                -----------------
determined as follows:

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

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

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

          (j)  "Option" means a share option granted pursuant to the Plan.
                ------

          (k)  "Option Agreement" means a written or electronic agreement or
                ----------------
letter between the Company and an Optionee evidencing the terms and conditions
of an individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan. The Option Agreement shall specify whether, and to what
extent, the Options which are the subject of the Agreement are intended to be
ISOs or Options intended to be taxed under the Code but not intended to qualify
as ISO's ("NSOs").

          (l)  "Optioned Shares" means the Shares subject to an Option.
                ---------------

          (m)  "Optionee" means the holder of an outstanding Option granted
                --------
under the Plan.

          (n)  "Parent" means any company other than the Company, whether now or
                ------
hereafter existing, in an unbroken chain of companies ending with the Company
if, at the time of the granting of the Option, each of the companies other than
the Company owns shares possessing 50 percent or more of the total combined
voting power of all classes of shares in one of the other companies in such
chain.

          (o)  "Plan" means this Lakaro Biopharmaceuticals, Inc. 1999 Share
                ----
Option Plan.

          (p)  "Repurchaser" means (i) the Company, if permitted by Applicable
                -----------
Laws; (ii) if the Company is not permitted by Applicable Laws, then any
affiliate or subsidiary of the Company designated by the Board of Directors; or
(iii) if the majority of the Board of Directors of the Company so decide, any
other third party or parties designated by the Board of Directors, provided in
no case shall the Company provide financial assistance to any other party to
purchase the Shares if doing so is prohibited by Applicable Laws.

          (q)  "Service Provider" means an Employee, Director or Consultant.
                ----------------
<PAGE>

          (r)  "Share" means a share of the Company's common shares having a par
                -----
value of $0.001, as adjusted in accordance with Section 11 below.

          (s)  "Subsidiary" means any company other than the Company, whether
                ----------
now or hereafter existing, in an unbroken chain of companies beginning with the
Company if, at the time of the granting of the Option, each of the companies
other than the last company in an unbroken chain owns shares possessing 50
percent or more of the total combined voting power of all classes of shares in
one of the other companies in such chain.

     3.   Shares Subject to the Plan. Subject to the provisions of Section 11 of
          --------------------------
the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan is three million six hundred twenty thousand (3,620,000)
Shares. The Shares may be authorized, but unissued, or acquired by the
Repurchaser.

     If an Option expires or becomes unexercisable without having been exercised
in full, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan shall not be returned to the Plan and shall not become available for
future distribution under the Plan, other than Shares which have been acquired
by the Repurchaser pursuant to the terms of the Plan.

     4.   Administration of the Plan.
          --------------------------

               (a)  Procedure.  The Plan shall be administered by the Board or a
                    ---------
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.

               (b)  Powers of the Administrator. Subject to the provisions of
                    ---------------------------
the Plan, and in the case of a Committee, the specific duties delegated by the
Board to such Committee, and subject to the approval of any relevant
authorities, the Administrator shall have the authority, in its discretion:

                         (i)    to determine the Fair Market Value;

                         (ii)   to select the Service Providers to whom Options
may from time to time be granted hereunder;

                         (iii)  to determine the number of Shares to be covered
by each such award granted hereunder;

                         (iv)   to approve forms of the Option Agreement for use
under the Plan;

                         (v)    to determine the terms and conditions of any
Option granted hereunder, including, without limitation, the vesting schedule,
and whether and to what extent an Option shall be ISO's;

                         (vi)   to determine whether and under what
circumstances an Option may be settled in cash as set forth under subsection
9(e) instead of Shares;
<PAGE>

                         (vii)  to reduce the exercise price of any Option to
the then current Fair Market Value, if the Fair Market Value of the Shares
covered by such Option has declined since the date the Option was granted;

                         (viii) to prescribe, amend and rescind rules and
regulations relating to the Plan;

                         (ix)   subject to Applicable Laws, to allow Optionees
to satisfy withholding tax obligations by electing to have the Company, if
permitted under Applicable Laws, withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal to
the amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by Optionees to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and

                         (x)    to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan.

               (c)  Effect of Administrator's Decision. All decisions,
                    ----------------------------------
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.

               (d)  Grants to Committee Members. If the Administrator is a
                    ---------------------------
Committee appointed by the Board, the grant of Options under the Plan to members
of such Committee, if any, shall be made by the Board and not by such Committee.

     5.   Eligibility.
          -----------

               (a)  Options may be granted to Service Providers.

               (b)  The Plan shall not confer upon any Optionee any right with
respect to continuing the Optionee's relationship as a Service Provider with the
Company or a Parent or Subsidiary, nor shall it interfere in any way with his or
her right or the Company's right, or the right of the Company's Parent or
Subsidiary, subject to any employment agreements, to terminate such relationship
at any time, with or without cause.

     6.   Term of Plan. The Plan shall become effective upon its adoption by the
          ------------
Board. It shall continue in effect for a term of ten (10) years after the
earlier of its adoption by the Board or its approval by the Company's
Shareholders, unless sooner terminated under Section 13 of the Plan.

     7.   Term of Option.  Unless stated otherwise in the Option Agreement, the
          --------------
term of each Option shall be no more than ten (10) years from the date of grant
thereof.

     8.   Option Exercise Price and Consideration.
          ---------------------------------------

               (a)  The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Administrator in accordance with Applicable Laws and subject to guidelines as
shall be suggested by the Board from time to time, if any.
<PAGE>

               (b)  The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator and may consist entirely of (1) cash, (2) check, (3)
promissory note, (4) consideration received by the Company under a formal
cashless exercise program, if such program is adopted by the Company in
connection with the Plan, or (5) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept,
the Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

               (c)  The proceeds received by the Company from the issuance of
Shares subject to the Options will be added to the general funds of the Company
and used for its corporate purposes.

     9.   Exercise of Option.
          ------------------

               (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
                    -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence other than leave pursuant to law. An Option may not be exercised for a
fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by Applicable Laws, the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse, or
in the name of a valid trust established by the Optionee. Until the Shares are
issued (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Shares, notwithstanding the exercise of the Option. To avoid doubt, until the
Shares are issued, such Optionee shall not have the right to vote at any meeting
of the shareholders of the Company, nor shall the Optionees be deemed to be a
class of shareholders or creditors of the Company. Upon their issuance, unless
otherwise determined by the Board, the Shares shall carry equal voting rights as
the common stock of the company on all matters where such vote is permitted by
Applicable Law. The Company shall issue (or cause to be issued) such Shares
promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 11 of the Plan.

     If any law or regulation requires the Company to take any action with
respect to the Shares specified in such notice before the issuance thereof, then
the date of their issuance shall be delayed for the period necessary to take
such action.

     Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
<PAGE>

               (b)  Termination of Relationship as a Service Provider. If an
                    -------------------------------------------------
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or disability (as defined below), the Optionee may exercise his or her Option
within such period of time (of at least thirty (30) days) as is specified in the
Option Agreement to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). Unless otherwise determined by the
Administrator and in the absence of a specified time in the Option Agreement,
the Option shall remain exercisable for ninety (90) days following the
Optionee's termination, except that the Option shall remain exercisable for only
thirty (30) days following the Optionee's termination if such termination is
with cause (as determined by the Company). Unless otherwise determined by the
Administrator, if, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise within the time specified by the Option Agreement, the Plan or the
Administrator the portion of his or her Option that had vested, the vested
portion of the Option shall terminate, and the Shares covered by such portion
shall revert to the Plan.

               (c)  Disability of Optionee. If an Optionee ceases to be a
                    ----------------------
Service Provider as a result of a physical or mental impairment, which has
lasted or is expected to last for a continuous period of not less than 12 months
and which causes the Optionee's total and permanent disability to engage in any
substantial gainful activity, the Optionee may exercise his or her Option within
such period of time as is specified in the Option Agreement (of at least six (6)
months) to the extent the Option is vested on the date of termination, but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to the entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan. If, after termination, the Option is not
exercised within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

               (d)  Death of Optionee. If an Optionee dies while a Service
                    -----------------
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (of at least six (6) months) to the extent that the
Option is vested on the date of death (but in no event later than the expiration
of the term of such Option as set forth in the Option Agreement) by the
Optionee's estate or by a person who acquires the right to exercise the Option
by bequest or inheritance. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's death, unless otherwise extended by the Administrator. If, at the
time of death, the Optionee is not vested as to the entire Option, the Shares
covered by the unvested portion of the Option shall revert to the Plan. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

               (e)  Buyout Provisions.  The Administrator may at any time, if
                    -----------------
permitted under Applicable Laws, offer to buy out for a payment in cash or
Shares, an Option previously granted, based on such terms and conditions as the
Administrator shall establish and
<PAGE>

communicate to the Optionee at the time that such offer is made. No such offer
shall obligate the Optionee to relinquish his or her Option.

     10.  Transferability of Options.  Unless otherwise specifically provided in
          --------------------------
an Option Agreement, Options may be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner,, only to an Optionee's spouse or
descendants, or to a trust (or other entity owned by such a trust) for the
primary benefit of the Optionee, his spouse and/or descendants ("Permitted
Transferees"), and may be exercised, during the lifetime of the Optionee, only
by the Optionee or a Permitted Transferee.

     11.  Adjustments Upon Changes in Capitalization or Merger.
          ----------------------------------------------------

               (a)  Changes in Capitalization. Subject to any required action by
                    -------------------------
the shareholders of the Company, the number of Shares covered by each
outstanding Option, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the exercise price per Share of each such outstanding Option
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a share split, reverse share split, share dividend,
recapitalization, combination or reclassification of the Shares, rights issues
or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities (including the Series A Convertible
Preferred Stock) of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of any class, or securities convertible into shares of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to an Option.

               (b)  Dissolution or Liquidation.  In the event of the proposed
                    --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Shares, including Shares as to which
the Option would not otherwise be exercisable. To the extent it has not been
previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.

               (c)  Merger or Acquisition. In the event of a merger of the
                    ---------------------
Company with or into another company, or the sale of all or substantially all of
the assets or shares of the Company, each outstanding Option shall be assumed or
an equivalent option substituted by the successor company or a Parent or
Subsidiary of the successor company. In the event that the successor company
refuses to assume or substitute for the Option, the Optionee shall fully vest in
and have the right to exercise the Option as to all of the Optioned Shares,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or acquisition, the Administrator shall
notify the Optionee in writing or electronically that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. The Administrator
shall
<PAGE>

determine, in its discretion, the proper exchange ratio of the Options and the
fair value of such Options for purpose of such substitution, shall be authorized
to accelerate the vesting date of any or all Options and shall be authorized to
make all necessary adjustments in the terms of the Options and the substituted
options (including, without limitation, adjustments in the exercise price) which
are fair under the circumstances.

     For the purposes of this paragraph, the Option shall be considered assumed
if, following the merger or acquisition, the option confers the right to
purchase or receive, for each Share of Optioned Shares immediately prior to the
merger or acquisition, the consideration (whether shares, options, cash, or
other securities or property) received in the merger or acquisition by holders
of shares for each share held on the effective date of the transaction (and if
such holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares); provided,
however, that if such consideration received in the merger or acquisition is not
solely common shares (or their equivalent) of the successor company or its
Parent, the Administrator may, with the consent of the successor company,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Shares, to be solely ordinary shares (or their
equivalent) of the successor company or its Parent equal in fair market value to
the per share consideration received by holders of a majority of the outstanding
shares in the merger or sale of assets, and provided further that the
Administrator may determine, in its discretion, that in lieu of such assumption
or substitution of Options for options of the acquiring corporation or its
parent or subsidiary, such Options will be substituted for any other type of
asset or property including cash which is fair under the circumstances.

     12.  Date of Grant.  Subject to Applicable Laws, the date of grant of an
          -------------
Option shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Board. Notice of the determination shall be given to each Service Provider to
whom an Option is so granted within a reasonable time after the date of such
grant.

     13.  Amendment and Termination of the Plan.
          -------------------------------------

               (a)  Amendment and Termination.  The Board may at any time amend,
                    -------------------------
alter, suspend or terminate the Plan.

               (b)  Shareholder Approval. The Board shall obtain shareholder
                    --------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

               (c)  Effect of Amendment or Termination. No amendment,
                    ----------------------------------
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

     14.  Conditions Upon Issuance of Shares.
          ----------------------------------
<PAGE>

               (a)  Legal Compliance. Shares shall not be issued pursuant to the
                    ----------------
exercise of an Option unless the exercise of such Option, the method of payment
and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

               (b)  Investment Representations. As a condition to the exercise
                    --------------------------
of an Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

     15.  Inability to Obtain Authority.  The inability of the Company to obtain
          -----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     16.  Reservation of Shares.  The Company, during the term of this Plan,
          ---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     17.  Shareholder Approval of Plan.  The Plan shall be subject to approval
          ----------------------------
by the shareholders of the Company. Such shareholder approval shall be obtained
in the manner and to the degree required under Applicable Laws.

     18.  Continuance of Status.  Neither the Plan nor any Option Agreement
          ---------------------
shall impose any obligation on the Company, or a Parent or Subsidiary thereof,
to continue any Optionee as a Service Provider, and nothing in the Plan or in
any Option Agreement shall confer upon any Service Provider any right to
continue as a Service Provider.

     19.  Governing Law. This  Plan shall be governed by and construed and
          -------------
enforced in accordance with the laws of the state of Delaware applicable to
contracts made and to be performed therein, without giving effect to the
principles of conflict of laws.

     20.  Tax Consequences. Any tax consequences arising from the grant or
          ----------------
exercise of any Option, from the payment for Shares or from any other event or
act (of the Company or the Optionee) hereunder, shall be borne solely by the
Optionee. Furthermore, the Optionee shall agree to indemnify the Company and
hold it harmless against and from any and all liability for any such tax or
interest or penalty thereon, including without limitation, liabilities relating
to the necessity to withhold, or to have withheld, any such tax from any payment
made to the Optionee.

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

     22.  Provision for Foreign Participants. The Board of Directors may,
          ----------------------------------
without amending the Plan, modify awards or options granted to participants who
are foreign nationals or
<PAGE>

employed outside the United States to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax,
securities, currency, employee benefit or other matters.

                                        Adopted by the Stockholders on
                                        November 15, 1999<PAGE>

                                                                    EXHIBIT 10.2

                             EMPLOYMENT AGREEMENT

     This Agreement, dated November 19, 1999, by and between Lakaro
Biopharmaceuticals, Inc. ("Lakaro"), a Delaware corporation having an address at
216 Jaffa Rd., Sha'arei Ha'ir, Jerusalem, Israel 94383 and Morris Laster, M.D.,
an individual residing at 40 Segal, Jerusalem, Israel (the "CEO")

WITNESSETH:

     WHEREAS, the Corporation desires to employ the CEO as Chief Executive
Officer of Lakaro and the CEO desires to be employed by the Lakaro as CEO of
Lakaro, all pursuant to the terms and conditions hereinafter set forth;

     NOW THEREFORE, in consideration of the foregoing and the mutual promises
and covenants herein contained, it is agreed as follows:

1.   EMPLOYMENT DUTIES
     -----------------

     (a) Lakaro hereby engages and employs the CEO, and the CEO accepts
engagement and employment, as CEO of Lakaro, to direct, supervise and have
responsibilities for the daily operations of Lakaro, including,  but not limited
to:  (i) directing and supervising the business and research and development
efforts of Lakaro;  (ii) managing the other executives and personnel of Lakaro
and (iii)  evaluating, negotiating, structuring and implementing business
transactions with Lakaro's customers, partners and suppliers, and to perform
such other services and duties as the Board of Directors of Lakaro shall
determine.  The CEO acknowledges and agrees that the performance by the CEO of
his duties hereunder may require significant domestic and international travel
by the CEO.  In addition, the CEO realizes that he may be required to spend a
substantial amount of time in Jerusalem, Israel.

     (b) The CEO shall devote substantially all of his gainful time to the
discharge of his duties and responsibilities under this Agreement.

2.   TERM
     ----

     The CEO's employment hereunder shall be for a term of three (3) years
commencing on the Effective Date and continuing through the third anniversary of
the Effective Date (the "Initial Term"), with successive one-year renewals
thereafter (the "Renewal Terms") unless sooner terminated as hereinafter
provided, or by notice of either party not less than 90 days prior to the
expiration of each term.

3.   COMPENSATION
     ------------

     (a) As compensation for the performance of his duties on behalf of Lakaro,
the CEO shall be compensated as follows:

         (i) Upon the next meeting of the Corporation's Board of Directors, the
Corporation will grant (the "Initial Grant") the CEO options (the "Options") to
purchase 300,000 shares of the common stock of the Corporation at an exercise
price equal to $0.15 per share (the "Exercise Price"), which options shall be
exercisable for a period of 10 years from the date of issuance.  Should any
change be made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made to (i) the total
number and/or class of securities subject to such options and (ii) the
<PAGE>

Exercise Price in order to reflect such change and thereby preclude a dilution
or enlargement under such options.

          (ii)   The stock options shall vest as follows: one-third on the
closing of the next equity investment in Lakaro; one-sixth six months from the
date of grant; one-sixth twelve months from the date of grant; one-sixth
eighteen months from the date of grant; and one-sixth twenty four months from
the date of grant; but immediate vesting shall occur upon a change of control of
the Corporation as described in paragraph 10(a)(iii)C below.

          (iii)  At the discretion of the Board of Directors, the CEO shall be
entitled to an annual grant of subsequent stock options each of which shall have
the same antidilution protection as described in Section 3 paragraph (a)(i)
above.

     (b) Lakaro shall reimburse the CEO for all normal, usual and necessary
expenses incurred by the CEO in furtherance of the business and affairs of
Lakaro, including travel and entertainment, against receipt by Lakaro of
appropriate vouchers or other proof of the CEO's expenditures and otherwise in
accordance with such Expense Reimbursement Policy as may from time to time be
adopted by the Board of Directors of Lakaro.

     (c) The CEO shall be, during the term of this Agreement, entitled to four
(4) weeks of vacation per year as well as all statutory holidays.

     (d) Lakaro shall adopt as part of the Corporation's Bylaws a broad form
indemnity of all actions taken in good faith by the officers and directors of
the Corporation.

     (e) Subject to Section 10(c) below, the CEO must be an employee of Lakaro
at the time any compensation is due in order to receive such compensation.  In
addition, no options shall vest after the termination of this Agreement.

4.   REPRESENTATIONS AND WARRANTIES
     BY THE CEO AND Lakaro
     ---------------------

     (a)  The CEO hereby represents and warrants to Lakaro as follows:

          (i)   Neither the execution and delivery of this Agreement nor the
performance by the CEO of his duties and other obligations hereunder violate any
statute, law, determination or award, or conflict with or constitute a default
under (whether immediately, upon the giving of notice or lapse of time or both)
any prior employment agreement, contract, or other instrument to which the CEO
is a party or by which he is bound.

          (ii)  The CEO has the full right, power and legal capacity to enter
and deliver this Agreement and to perform his duties and other obligations
hereunder. This Agreement constitutes the legal, valid and binding obligation of
the CEO enforceable against him in accordance with its terms. No approvals or
consents of any persons or entities are required for the CEO to execute and
deliver this Agreement or perform his duties and other obligations hereunder.

     (b)  Lakaro hereby represents and warrants to the CEO as follows:

          (i)   Lakaro is duly organized, validly existing and in good standing
under the laws of the State of Delaware, with all requisite corporate power and
authority to own its properties and conduct its business in the manner presently
described.

          (ii)  Lakaro has the full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.

          (iii) The execution, delivery and performance by Lakaro of this
Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether

<PAGE>

immediately, or upon the giving of notice or lapse of time or both) the
certificate of incorporation or by-laws of Lakaro, or any agreement or
instrument to which Lakaro is a party or by which Lakaro or any of its
properties may be bound or affected.

5.   CONFIDENTIAL INFORMATION
     ------------------------

     (a) The CEO agrees that during the course of his employment and at any time
thereafter, he will not disclose or make accessible to any other person,
Lakaro's products, services and technology, both current and under development,
promotion and marketing programs, lists, trade secrets and other confidential
and proprietary business information of Lakaro or any of its clients.  The CEO
agrees: (i) not to use any such information for himself or others; and (ii) not
to take any such material or reproductions thereof from Lakaro's facilities at
any time during his employment by Lakaro, except as required in the CEO's duties
to Lakaro.  The CEO agrees immediately to return all such material and
reproductions in his possession to Lakaro upon request and in any event upon
termination of employment.  Nothing in the foregoing shall be construed to
prevent the CEO from disclosing or using any information which the CEO can show
by written documentation was in the public domain or enters into the public
domain through no improper act on the CEO's part or on the part of any of
Lakaro's employees or was in his possession prior to his joining Lakaro or
disclosed properly to the CEO after leaving Lakaro.

     (b) Except with prior written authorization by Lakaro, the CEO agrees not
to disclose or publish any of the confidential, technical or business
information or material of Lakaro, its clients or any other party to whom Lakaro
owes an obligation of confidence, at any time during or for a period of two
years after his employment with Lakaro except in the event of involuntary no
cause termination by Lakaro or a termination by the CEO for cause.

6.   NON-COMPETITION
     ---------------

     (a) The CEO understands and recognizes that his services to Lakaro are
special and unique and agrees that, during the term of this Agreement, and for a
period of 12 months from the date of termination of his employment hereunder, he
shall not in any manner, directly or indirectly, on behalf of himself or any
person, firm, partnership, joint venture, corporation or other business entity
("Person"), enter into or engage in any business directly competitive with
Lakaro's business, either as an individual for his own account, or as a partner,
joint venturer, CEO, agent, consultant, salesperson, officer, director or
shareholder of a Person operating or intending to operate within the area that
Lakaro is, at the date of termination, conducting its business (the "Restricted
Businesses"); provided, however, that nothing herein will preclude the CEO from
holding one percent (1%) or less of the stock of any publicly traded company or
from holding a position with a Person who does not engage in a business directly
competitive with the Restrictive Businesses so long as the CEO works in a
division of such Person which carries on a bona fide business which is not
directly competitive with the Restricted Businesses.

     (b) For a period of 12 months after the termination of this Agreement, the
CEO shall not interfere with or disrupt or attempt to disrupt Lakaro's business
relationship with any of its customers, or solicit any of the employees of
Lakaro.

     (c) In the event that the CEO breaches any provisions of this Section 6 or
there is a threatened breach, then, in addition to any other rights which Lakaro
may have, Lakaro shall be entitled, without the posting of a bond or other
security, to injunctive relief to enforce the restrictions contained herein. In
the event that an actual proceeding is brought in equity to enforce the
provisions of this Section 6, the CEO shall not argue as a defense that there is
an adequate remedy at law nor shall Lakaro be prevented from seeking any other
remedies which may be available.

7.   OWNERSHIP OF PROPRIETARY INFORMATION
     ------------------------------------

     (a)  The CEO agrees that all information that has been created, discovered
or developed by Lakaro, its subsidiaries, affiliates, successors or assigns
(collectively, the "Affiliates") (including, without limitation, information
relating to the development of Lakaro's business created, discovered,
<PAGE>

developed or made know to Lakaro or the Affiliates by CEO during the Term and
information relating to Lakaro's customers, suppliers, consultants, and
licensees) and/or in which property rights have been assigned or otherwise
conveyed to Lakaro or the Affiliates, shall be the sole property of Lakaro or
the Affiliates, as applicable, and Lakaro or the Affiliates, as the case may be,
shall be the sole owner of all patents, copyrights and other rights in
connection therewith, including but not limited to the right to make application
for statutory protection. All of the aforementioned information is hereinafter
called "Proprietary Information." By way of illustration, but not limitation,
Proprietary Information includes trade secrets, processes, discoveries,
structures, inventions, designs, ideas, works of authorship, copyrightable
works, trademarks, copyrights, formulas, data, know-how, show-how, improvements,
inventions, product concepts, techniques, information or statistics contained
in, or relating to, marketing plans, strategies, forecasts, blueprints,
sketches, records, notes, devices, drawings, customer lists, patent
applications, continuation applications, continuation-in-part applications, file
wrapper continuation applications and divisional applications and information
about Lakaro's or the Affiliates' employees and/or consultants (including,
without limitation, the compensation, job responsibility and job performance of
such employees and/or consultants).

     (b) The CEO further agrees that at all times, both during the Term
and after the termination of this Agreement, he will keep in confidence and
trust all Proprietary Information, and he will not use or disclose any
Proprietary Information or anything directly relating to it without the written
consent of Lakaro or the Affiliates, as appropriate, except as may be necessary
in the ordinary course of performing his duties hereunder and except for
academic, non-commercial research purposes with the prior written approval of
the Board of Directors. The CEO acknowledges that the Proprietary Information
constitutes a unique and valuable asset of Lakaro and each Affiliate acquired at
great time and expense, which is secret and confidential and which will be
communicated to CEO, if at all, in confidence in the course of his performance
of his duties hereunder, and that any disclosure or other use of the Proprietary
Information other than for the sole benefit of Lakaro or the Affiliates would be
wrongful and could cause irreparable harm to Lakaro or the Affiliates, as the
case may be.

          Notwithstanding the foregoing, the parties agree that, at all such
times, CEO is free to use (i) information in the public domain not as a result
of a breach of this Agreement, (ii) information lawfully received from a third
party and (iii) CEO's own skill, knowledge, know-how and experience to whatever
extent and in whatever way he wishes, in each case consistent with his
obligations as CEO and that, at all times, CEO is free to conduct any non-
commercial research not relating to Lakaro's business.

8.   DISCLOSURE AND OWNERSHIP OF INVENTIONS
     --------------------------------------

     (a) During the Term, CEO agrees that he will promptly disclose to
Lakaro, or any persons designated by Lakaro, all improvements, inventions,
designs, ideas, works of authorship, copyrightable works, discoveries,
trademarks, copyrights, trade secrets, formulas, processes, structures, product
concepts, marketing plans, strategies, customer lists, information about
Lakaro's or the Affiliates' employees and/or consultants (including, without
limitation, job performance of such employees and/or consultants), techniques,
blueprints, sketches, records, notes, devices, drawings, know-how, data, whether
or not patentable, patent applications, continuation applications, continuation-
in-part applications, file wrapper continuation applications and divisional
applications, made or conceived or reduced to practice or learned by him, either
alone or jointly with others, during the Term (all said improvements,
inventions, designs, ideas, works of authorship, copyrightable works,
discoveries, trademarks, copyrights, trade secrets, formulas, processes,
structures, product concepts, marketing plans, strategies, customer lists,
information about Lakaro's or the Affiliates' employees and/or consultants,
techniques, blueprints, sketches, records, notes, devices, drawings, know-how,
data, patent applications, continuation applications, continuation-in-part
applications, file wrtapper continuation applications and divisional
applications shall be collectively hereinafter called "Inventions").

     (b) The CEO agrees that all Inventions shall be the sole property of
Lakaro to the maximum extent permitted by applicable law and to the extent
permitted by law shall be "works made for hire" as that term is defined in the
United States Copyright Act (17 USCA, Section 101).  Lakaro
<PAGE>

shall be the sole owner of all patents, copyrights, trade secret rights, and
other intellectual property or other rights in connection therewith. CEO hereby
assigns to Lakaro all right, title and interest he may have or acquire in all
Inventions. CEO further agrees to assist Lakaro in every proper way (but at
Lakaro's expense) to obtain and from time to time enforce patents, copyrights or
other rights on said Inventions in any and all countries, and to that end the
CEO will execute all documents necessary:

          (i)  to apply for, obtain and vest in the name of Lakaro alone (unless
Lakaro otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world and when so obtained or vested to
renew and restore the same; and

          (ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous protection.

     (c) The CEO's obligation to assist Lakaro in obtaining and enforcing
patents and copyrights for the Inventions in any and all countries shall
continue beyond the Term, but Lakaro agrees to compensate the CEO at his normal
and usual rate after the expiration of the Term for time actually spent by the
CEO at Lakaro's request on such assistance.

9.   NON-SOLICITATION
     ----------------

     During the Term, and for 12 months thereafter, CEO shall not, directly or
indirectly, without the prior written consent of Lakaro:

     (a) solicit or induce any employee of Lakaro or any Affiliate to leave
the employ of Lakaro or any Affiliate or hire for any purpose any employee of
Lakaro or any Affiliate or any employee who has left the employment of Lakaro or
any Affiliate within six months of the termination of said employee's employment
with Lakaro; or

     (b) solicit or accept employment or be retained by any party who, at
any time during the Term, was a customer or supplier of Lakaro or any Affiliate
where his position will be related to the business of Lakaro; or

     (c) solicit or accept the business of any customer or supplier of
Lakaro or any Affiliate with respect to products similar to those supplied by
Lakaro.

10.  TERMINATION
     -----------

     (a) This CEO's employment hereunder shall begin on the Effective Date and
shall continue for the period set forth in Section 2 hereof unless sooner
terminated upon the first to occur of the following events:

         (i)  (A) The death of the CEO; or

              (B) the total disability of the CEO.

         (ii) Termination by the Board of Directors of Lakaro for just cause.
Any of the following actions by the CEO shall constitute just cause:

(A)  Material breach by the CEO of Sections 5, 6, 7, 8, or 9 of this Agreement;
or

(B)  Material breach by the CEO of any provision of this Agreement other than
Sections 5, 6, 7, 8 or 9 which is not cured by the CEO within 30 days of notice
from Lakaro; or in the event the breach is not curable within 30 days; the
commencement of action(s) to cure within said 30 days and the
<PAGE>

diligent pursuit of the cure thereafter, provided such breach may be completely
cured; or

(C)  Any action by the CEO constituting gross negligence, recklessness or
willful misconduct in respect of the CEO's obligation to Lakaro which has or is
likely to result in material, economic damage to Lakaro.

          (iii)     Termination by the CEO for just cause.  Any of the following
actions or omissions by Lakaro shall constitute just cause.

(A)  Material breach by Lakaro of any provision of this Agreement which is not
 cured by Lakaro within 30 days of notice thereof from the CEO; or

(B)  A failure to elect or reelect the CEO to the office of CEO of Lakaro or
other change by Lakaro of the CEO's function, duties or responsibilities such
that the CEO is no longer the highest ranking Officer of Lakaro; or

(C)  A "change in control," which shall mean a merger or consolidation in which
either more than 50% of the voting power of Lakaro is transferred or Lakaro is
not the surviving entity, or sale or other disposition of all or substantially
all the assets of Lakaro; or

(D)  Termination of the CEO's employment other than for serious, willful
misconduct in respect of the CEO's obligations to the Corporation, including,
but not limited to, final conviction for a felony or perpetration of a common-
law fraud which has or is likely to result in material economic damage to the
Corporation; or

(E)  Relocation to a geographic area without the CEO's prior consent.

          (iv) Termination by Lakaro without cause. Notwithstanding anything in
this Agreement, Lakaro may terminate the CEO's employment without cause upon 90
days prior notice.

     (b)  Upon termination by Lakaro for any reason other than the reasons set
forth in subparagraph (i) or (ii) of paragraph (a) above, or upon termination by
the CEO for any reason set forth in subparagraph (iii) of paragraph (a) above,
then the Options shall immediately vest and become exercisable at the option of
the CEO.

11.  NOTICES
     -------

     Any notice or other communication under this Agreement shall be in writing
and shall be deemed to have been given:  when delivered personally against
receipt thereof; one (1) business day after being sent by Federal Express or
similar overnight delivery; or three (3) business days after being mailed
registered or certified mail, postage prepaid, return receipt requested, to
either party at the address set forth above, or to such other address as such
party shall give by notice hereunder to the other party.

12.  SEVERABILITY OF PROVISIONS
     --------------------------

     If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the extent
they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein.
<PAGE>

13.  ENTIRE AGREEMENT MODIFICATION
     -----------------------------

     This Agreement contains the entire agreement of the parties relating to the
subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto.

14.  BINDING EFFECT
     --------------

     The rights, benefits, duties and obligations under this Agreement shall
inure to, and be binding upon, Lakaro, its successors and assigns, and upon the
CEO and his legal representatives.  This Agreement constitutes a personal
service agreement, and the performance of the CEO's obligations hereunder may
not be transferred or assigned by the CEO.

15.  NON-WAIVER
     ----------

     The failure of either party to insist upon the strict performance of any of
the terms, conditions and provisions of this Agreement shall not be construed as
a waiver or relinquishment of future compliance therewith, and said terms,
conditions and provisions shall remain in full force and effect.  No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.

16.  GOVERNING LAW
     -------------

     This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York without regard to principles
of conflicts of law.  Any litigation commenced pursuant to the terms of the
Agreement shall only be prosecuted and defended in the city, county and state of
New York.  Additionally, the prevailing party in any litigation shall be
entitled to an additional award of the recoupment of its attorney fees, cost and
expenses.

17.  REMEDIES FOR BREACH
     -------------------

     The CEO understands and agrees that any breach of Sections 5, 6, 7, 8 or 9
of this Agreement by the Executive could cause irreparable damage to Lakaro and
to the Affiliates, and that monetary damages alone would not be adequate and, in
the event of such breach, Lakaro shall have, in addition to any and all remedies
of law, the right to an injunction, specific performance or other equitable
relief to prevent or redress the violation of Lakaro's rights under such
Sections.

18.  HEADINGS
     --------

     The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                   EMPLOYEE:

                                   By:/s/ Morris Laster, M.D.
                                      -----------------------
                                   Name:  Morris Laster, M.D.

                                   LAKARO BIOPHARMACEUTICALS, INC.
<PAGE>

                          By: /s/ Bob Trachtenberg
                             -------------------------
                          Name:  Bob Trachtenberg
                          Title: Secretary

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