Document:

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                                                                    Exhibit 10.4

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement"), made and entered into this
11th day of November, 2002, by and between Predictive Systems, Inc., a Delaware
corporation with principal offices located at 19 West 44th Street, New York, NY
10036 (the "Company"), and Gary Papilsky (the "Executive").

                                   WITNESSETH

         WHEREAS, the Company has a need for the Executive's personal services
in an executive capacity; and

         WHEREAS, the Executive possesses the necessary strategic, financial,
planning, operational and managerial skills necessary to fulfill those needs;
and

         WHEREAS, the Executive and the Company desire to enter into a formal
Employment Agreement to fully recognize the contributions of Executive to the
Company and to assure continuous harmonious performance of the affairs of the
Company.

         NOW, THEREFORE, in consideration of the mutual promises, terms,
provisions, and conditions contained herein, the parties agree as follows:

1.       Position.

         (a) The Company hereby agrees to employ the Executive to serve in the
role of Executive Vice President and General Counsel of the Company, subject to
the limitation set forth herein. The Executive accepts such employment upon the
terms and conditions set forth herein, and further agrees to perform to the best
of his/her abilities the duties generally associated with his/her position, as
well as such other duties commensurate with his/her position as Executive Vice
President and General Counsel as may be reasonably assigned by the Company. The
Executive shall, at all times during the Term, report directly to either the CEO
or an executive who reports directly to the CEO. The Executive shall perform
his/her duties diligently and faithfully and shall devote his/her full business
time and attention to such duties , provided however, that nothing herein shall
preclude the Executive from (i) serving on the boards of directors of a
reasonable number of other corporations with the prior written approval of the
CEO (which approval shall not be unreasonably withheld), (ii) serving on the
boards of a reasonable number of trade associations and/or charitable
organizations, (iii) engaging in charitable activities and community affairs and
(iv) managing his/her personal investments and affairs, provided that such
activities do not conflict or interfere with the effective discharge of his/her
duties and responsibilities under this Agreement, or otherwise violate any of
the terms of this Agreement.

2.       Term of Employment and Renewal.

         The term of Executive's employment under this Agreement will commence
on the date of this Agreement (the "Effective Date"). Subject to the provisions
of Section 10 of this Agreement, the term of Executive's employment hereunder
shall be for an initial term of three (3) years from the Effective Date (the
"Initial Term"). The Initial Term of this Agreement shall be automatically
extended for successive one (1) year periods (each a "Renewal Period") unless
the Company or the Executive gives written notice to the other at least six (6)
months prior to the expiration of the Initial Term, or a Renewal Period, of such
party's election not to extend this Agreement. References herein to the "Term"
shall mean the Initial Term as it may be so extended by one or more Renewal
Periods. The last day of the Term is the "Expiration Date."

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3.       Compensation and Benefits.

         (a) Salary. Commencing on the Effective Date, the Company agrees to pay
the Executive a base salary at an annual rate of one hundred sixty six thousand
two hundred fifty Dollars ($166,250) for through the first calendar year of the
Term, payable in such installments as is the policy of the Company (the
"Salary"), but no less frequently than monthly. Thereafter, the Board shall
determine appropriate increases to Executive's Salary on an annual basis, but in
no event shall diminish the amount of Executive's Salary below the initial rate,
or below the increased rates.

         (b) Bonus. The Executive shall be eligible to receive annual bonuses
(the "Annual Bonus") at the sole discretion of the Company in an amount of up to
60% of the Salary. The Company, in its sole discretion, may pay an additional
bonus (a "Stretch Bonus") in the event of extraordinary performance by the
Executive and the Company. Such Annual Bonus and Stretch Bonus, if any, shall be
paid out no later than sixty (60) days after the end of each calendar year.

         (c) Benefits. The Executive shall be entitled to participate in all
employee benefit plans which the Company provides or may establish from time to
time for the benefit of its employees, including, without limitation, group
life, medical, surgical, dental and other health insurance, short and long-term
disability, deferred compensation, profit-sharing and similar plans. Nothing
herein shall obligate the Company to provide any particular employee benefit to
its employees during the Term. The Executive shall also be entitled to paid
vacation of twenty (20) days per year, in accordance with the Company's vacation
policy.

         (d) Other Long-Term Incentives. The Executive shall be eligible to
participate in any ongoing long-term incentive programs of the Company subject
to the terms and conditions of such programs.

         (e) Perquisites. The Executive shall be entitled to perquisites on the
same basis as provided to other senior-level executives of the Company from time
to time.

         (f) Expenses. The Company shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses actually incurred by him/her during the Term
in performing services hereunder, provided that the Executive properly accounts
for such expenses in accordance with the Company's policies.

4.       Confidentiality, Disclosure of Information.

         (a) The Executive recognizes and acknowledges that the Executive has
had and will have access to Confidential Information (as defined below) relating
to the business or interests of the Company or of persons with whom the Company
may have business relationships. Except as permitted herein, the Executive will
not during the Term, or at any time thereafter, use, disclose or permit to be
known by any other person or entity, any Confidential Information of the Company
(except as required by applicable law or in connection with the performance of
the Executive's duties and responsibilities hereunder). The term "Confidential
Information" means information relating to the Company's business affairs,
proprietary technology, trade secrets, patented processes, research and
development data, know-how, market studies and forecasts, competitive analyses,
pricing policies, employee lists, employment agreements (other than this
Agreement), personnel policies, the substance of agreements with customers,
suppliers and others, marketing arrangements, customer lists, commercial
arrangements, or any other information relating to the Company's business that
is not generally known to the public or to actual or potential competitors of
the Company (other than through a breach of this Agreement). This obligation
shall continue until such Confidential Information becomes publicly available,
other than pursuant to a breach of this Section 4 by the Executive, regardless
of whether the Executive continues to be employed by the Company.

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         (b) It is further agreed and understood by and between the parties to
this Agreement that all "Company Materials," which include, but are not limited
to, computers, computer software, computer disks, tapes, printouts, source, HTML
and other code, flowcharts, schematics, designs, graphics, drawings,
photographs, charts, graphs, notebooks, customer lists, sound recordings, other
tangible or intangible manifestation of content, and all other documents whether
printed, typewritten, handwritten, electronic, or stored on computer disks,
tapes, hard drives, or any other tangible medium, as well as samples,
prototypes, models, products and the like, shall be the exclusive property of
the Company and, upon termination of Executive's employment with the Company,
and/or upon the request of the Company, all Company Materials, including copies
thereof, as well as all other Company property then in the Executive's
possession or control, shall be returned to and left with the Company.

5.       Inventions Discovered by Executive.

         The Executive shall promptly disclose to the Company any invention,
improvement, discovery, process, formula, or method or other intellectual
property, whether or not patentable or copyrightable (collectively,
"Inventions"), conceived or first reduced to practice by the Executive, either
alone or jointly with others, while performing services hereunder (or, if based
on any Confidential Information, at any time during or after the Term), (a)
which pertain to any line of business activity of the Company, whether then
conducted or then being actively planned by the Company, with which the
Executive was or is involved, (b) which is developed using time, material or
facilities of the Company, whether or not during working hours or on the Company
premises, or (c) which directly relates to any of the Executive's work during
the Term, whether or not during normal working hours. The Executive hereby
assigns to the Company all of the Executive's right, title and interest in and
to any such Inventions. During and after the Term, the Executive shall execute
any documents necessary to perfect the assignment of such Inventions to the
Company and to enable the Company to apply for, obtain and enforce patents,
trademarks and copyrights in any and all countries on such Inventions,
including, without limitation, the execution of any instruments and the giving
of evidence and testimony, without further compensation beyond the Executive's
agreed compensation during the course of the Executive's employment. Without
limiting the foregoing, the Executive further acknowledges that all original
works of authorship by the Executive, whether created alone or jointly with
others, related to the Executive's employment with the Company and which are
protectable by copyright, are "works made for hire" within the meaning of the
United States Copyright Act, 17 U.S.C. ss. 101, as amended, and the copyright of
which shall be owned solely, completely and exclusively by the Company. If any
Invention is considered to be work not included in the categories of work
covered by the United States Copyright Act, 17 U.S.C. ss. 101, as amended, such
work is hereby assigned or transferred completely and exclusively to the
Company. The Executive hereby irrevocably designates counsel to the Company as
the Executive's agent and attorney-in-fact to do all lawful acts necessary to
apply for and obtain patents and copyrights and to enforce the Company's rights
under this Section. This Section 5 shall survive the termination of this
Agreement. Any assignment of copyright hereunder includes all rights of
paternity, integrity, disclosure and withdrawal and any other rights that may be
known as or referred to as "moral rights" (collectively "Moral Rights"). To the
extent such Moral Rights cannot be assigned under applicable law and to the
extent the following is allowed by the laws in the various countries where Moral
Rights exist, the Executive hereby waives such Moral Rights and consents to any
action of the Company that would violate such Moral Rights in the absence of
such consent. The Executive agrees to confirm any such waivers and consents from
time to time as requested by the Company.

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6.       Non-Competition and Non-Solicitation.

         The Executive acknowledges that the Company has invested substantial
time, money and resources in the development and retention of its Inventions,
Confidential Information (including trade secrets), customers, accounts and
business partners, and further acknowledges that during the course of the
Executive's employment with the Company the Executive has had and will have
access to the Company's Inventions and Confidential Information (including trade
secrets), and will be introduced to existing and prospective customers, accounts
and business partners of the Company. The Executive acknowledges and agrees that
any and all "goodwill" associated with any existing or prospective customer,
account or business partner belongs exclusively to the Company, including, but
not limited to, any goodwill created as a result of direct or indirect contacts
or relationships between the Executive and any existing or prospective
customers, accounts or business partners. Additionally, the parties acknowledge
and agree that Executive possesses skills that are special, unique or
extraordinary and that the value of the Company depends upon his/her use of such
skills on its behalf.

         In recognition of this, the Executive covenants and agrees that:

         (a) During the Term, and for a period of six (6) months thereafter, the
Executive may not, without the prior written consent of the Board, (whether as
an employee, agent, servant, owner, partner, consultant, independent contractor,
representative, stockholder or in any other capacity whatsoever) participate in
any business that offers products or services competitive in any way to those
offered by the Company or that were under active development by the Company
during the Term, provided that nothing herein shall prohibit the Executive from
(i) owning securities of corporations which are listed on a national securities
exchange or traded in the national over-the-counter market in an amount which
shall not exceed 3% of the outstanding shares of an such corporation or (ii)
after termination of his/her employment (x) participating in the business of a
separately managed and operated division, subsidiary or affiliate of a
Competitor, provided that such division, subsidiary or affiliate does not offer
Competitive Services and the Executive has no business communications with
employees of any division, subsidiary or affiliate of the Competitor that offers
Competitive Services regarding the business of the competitive division,
subsidiary or affiliate or (y) becoming affiliated with an entity that is not a
Competitor but that is subsequently acquired by or merged with a Competitor,
provided that, following such acquisition or merger, s/he is participating in
the business of a separately managed and operated division, subsidiary or
affiliate of the Competitor that does not offer Competitive Services and s/he
has no business communications with employees of any division, subsidiary or
affiliate of the Competitor that offers Competitive Services regarding the
business of the competitive division, subsidiary or affiliate.

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         (b) During the Term, and for a period of one (1) year thereafter, the
Executive may not entice, solicit or encourage any Company employee to leave the
employ of the Company or any independent contractor to sever its engagement with
the Company, absent prior written consent to do so from the Company.

         (c) During the Term, and for a period of one (1) year thereafter, the
Executive may not, directly or indirectly, entice, solicit or encourage any
customer, prospective customer, vendor, strategic partner or business associate
of the Company to cease doing business with the Company, reduce its relationship
with the Company or refrain from establishing or expanding a relationship with
the Company.

7.       Non-Disparagement.

         (a) The Executive hereby agrees that during the Term, and at all times
thereafter, the Executive will not intentionally make any public statement that
is disparaging about the Company or any of its officers or directors, including,
but not limited to, any public statement that disparages the products, services,
finances, financial condition, capabilities or other aspect of the business of
the Company.

         (b) The Company hereby agrees that during the Term, and at all times
thereafter, its officers and directors will not intentionally make any public
statement that is disparaging about the Executive, including, but not limited
to, any statement that disparages the services, capabilities, performance or any
other aspect of the Executive's relationship with the Company.

         (c) This Section 7 shall not prevent any person or entity subject to it
from responding publicly to incorrect or disparaging public statements made in
violation of this Section 7 to the extent reasonably necessary to correct or
refute such public statements or from making truthful statements when necessary
to enforce this Agreement or required by applicable law, by a court of law or an
arbitrator, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with jurisdiction to do so.

8.       Provisions Necessary and Reasonable.

         (a) The Executive agrees that (i) the provisions of Sections 4, 5, 6
and 7 of this Agreement are necessary and reasonable to protect the Company's
Confidential Information, Inventions, and goodwill; (ii) the specific temporal,
geographic and substantive provisions set forth in Section 6 of this Agreement
are reasonable and necessary to protect the Company's business interests in part
because the Company's business is international in scope; and (iii) in the event
of any breach of any of the covenants set forth herein, the Company would suffer
substantial irreparable harm and would not have an adequate remedy at law for
such breach. In recognition of the foregoing, the Executive agrees that in the
event of a breach or threatened breach of any of these covenants, in addition to
such other remedies as the Company may have at law, without posting any bond or
security, the Company shall be entitled to seek and obtain equitable relief, in
the form of specific performance, and/or temporary, preliminary or permanent
injunctive relief, or any other equitable remedy which then may be available.
The seeking of such injunction or order shall not affect the Company's right to
seek and obtain damages or other equitable relief on account of any such actual
or threatened breach.

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         (b) If any of the covenants contained in Sections 4, 5, 6 and 7 hereof,
or any part thereof, are hereafter construed to be invalid or unenforceable, the
same shall not affect the remainder of the covenant or covenants, which shall be
given full effect without regard to the invalid portions.

         (c) If any of the covenants contained in Sections 4, 5, 6 and 7 hereof,
or any part thereof, are held to be unenforceable by a court of competent
jurisdiction because of the temporal or geographic scope of such provision or
the area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or geographic area
of such provision and, in its reduced form, such provision shall be enforceable.

9.       Representations Regarding Prior Work and Legal Obligations.

         (a) The Executive represents that the Executive has no agreement or
other legal obligation with any prior employer, or any other person or entity,
that restricts the Executive's ability to accept employment with, or to perform
any function for, the Company.

         (b) The Executive has been advised by the Company that at no time
should the Executive divulge to or use for the benefit of the Company any trade
secret or confidential or proprietary information of any previous employer. The
Executive expressly acknowledges that the Executive has not to the best of
his/her knowledge divulged or used any such information for the benefit of the
Company.

         (c) The Executive acknowledges that the Executive has not and will not
knowingly misappropriate any Invention that the Executive played any part in
creating while working for any former employer.

         (d) The Executive acknowledges that the Company is basing important
business decisions on these representations, and affirms that all of the
statements included herein are true to the best of his/her knowledge.

10.      Termination and Severance.

         Notwithstanding the provisions of Section 2 of this Agreement, the
Executive's employment hereunder may terminate under the following
circumstances:

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         (a) Termination by the Company for Cause. The Company may terminate
this Agreement for Cause at any time, upon written notice to the Executive
setting forth in reasonable detail the nature of such Cause. For purposes of
this Agreement, Cause is defined as (i) the Executive's willful and material
breach of the terms of this Agreement; (ii) the Executive's commission of any
felony or any crime involving moral turpitude; (iii) gross negligence or willful
misconduct by the Executive in connection with his/her position hereunder; or
(iv) the Executive's willful refusal to perform his/her duties hereunder. Upon
the termination for Cause of Executive's employment, the Company shall have no
further obligation or liability to the Executive other than for salary earned
under this Agreement prior to the date of termination, and any accrued but
unused vacation.

         (b) Termination by the Company Without Cause. The Executive's
employment hereunder may be terminated without Cause by the Company upon written
notice to the Executive, provided, however, that if the Company terminates the
Executive's employment without Cause, or the Executive terminates his/her
employment for Good Reason, as defined below, the Executive shall be entitled
to: (i) Salary through the date of termination; (ii) a lump sum payment equal to
Salary for a period of 6 months, at the annualized rate in effect on the date of
termination; (iii) the Executive shall be permitted to exercise all of
Executive's vested stock options up to two (2) years after the effective date of
the termination; (iv) continuation of health coverage for the Executive and any
eligible dependents covered as of the effective date of the termination,
pursuant to COBRA, at the Company's expense for a period of 6 months; and (v) in
the event of termination occurring in the months of July through December of any
given calendar year, the pro rata amount of the Annual Bonus for that year. As a
condition of receiving severance benefits pursuant to this Section 10(b), the
Executive shall execute and deliver to the Company prior to his/her receipt of
such benefits a general release substantially in the form attached hereto as
Exhibit A.

         (c) Termination by the Executive. The Executive may terminate his/her
employment hereunder upon two (2) weeks written notice to the Company. In the
event of termination by the Executive pursuant to this subsection 10(c), the
Company may elect to pay the Executive during the notice period (or for any
remaining portion of that period) the Salary and benefits at the rate of
compensation the Executive was receiving immediately before such notice of
termination was tendered in lieu of actual notice. The Executive may also
terminate his/her employment hereunder for "Good Reason," within thirty (30)
days of the occurrence of any of the following events (i) a material breach of
this Agreement by the Company; (ii) a change in the Executive's reporting
relationship so that s/he no longer reports directly to either the CEO or an
executive who reports directly to the CEO; (iii) a relocation of the Executive's
worksite to a location 25 miles or more from its current location; or (iv) the
failure of the Company to obtain the assumption in writing of its obligation to
perform this Agreement by any successor to all or substantially all of the
assets of the Company within a reasonable period after a merger, consolidation,
sale or similar transaction. The Executive shall give the Company twenty (20)
days' written notice and opportunity to cure prior to any termination for Good
Reason.

         (d) Death. In the event of the Executive's death during the Term of
this Agreement, the Executive's employment hereunder shall immediately and
automatically terminate, and the Company shall have no further obligation or
duty to the Executive or his/her estate or beneficiaries other than for the
Salary earned under this Agreement to the date of termination and any payments
or benefits due under Company policies or benefit plans.

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         (e) Disability. The Company may terminate the Executive's employment
hereunder, upon written notice to the Executive, in the event that the Executive
becomes disabled during the Term through any condition of either a physical or
psychological nature and, as a result, is, with or without reasonable
accommodation, unable to perform the essential functions of the services
contemplated hereunder for (a) a period of ninety (90) consecutive days, or (b)
for shorter periods aggregating one hundred twenty (120) days during any twelve
(12) month period during the Term. Any such termination shall become effective
upon mailing or hand delivery of notice that the Company has elected its right
to terminate under this subsection 10(e), and the Company shall have no further
obligation or duty to the Executive other than for salary earned under this
Agreement prior to the date of termination and any payments or benefits due
under Company policies or benefit plans.

         (f) Effect of Non-Renewal. In the event that the Company gives notice
of its election not to extend the Term of the Agreement for a Renewal Period
pursuant to Section 2 above, the Company shall continue to pay the Executive
full compensation as defined in Section 3 of this Agreement from the date the
Executive receives such notice through the Expiration Date. The Executive shall
not be entitled to any additional compensation other than any payments or
benefits due under Company policies or benefit plans.

         (g) Change of Control. In the event a Change in Control or Hostile
Takeover, as defined in the Company's 1999 Stock Incentive Plan (collectively a
"Change of Control"), occurs, fifty percent (50%) of any unvested stock options
granted to the Executive shall accelerate and vest in full immediately prior to
the Change of Control, provided the Executive remains employed by the Company on
the date of such Change of Control. If (i) the Executive is terminated other
than for Cause, Disability or death, or (ii) s/he terminates her/his employment
for Good Reason, within 60 days prior to the announcement of a Change of Control
or within twelve (12) months from the effective date of the Change of Control,
(x) all unvested stock options granted to the Executive shall accelerate and
vest in full, and (y) Executive shall receive a lump sum payment equal to Salary
for a period of 3 months, at the annualized rate in effect on the date of
termination. Such payments shall be in addition to any payment owed pursuant to
paragraph (b) of this Section 10.

11.      Choice of Law.

         The Executive acknowledges that a substantial portion of the Company's
business is based out of and directed from the State of New York. The Executive
also acknowledges that during the course of the Executive's employment with the
Company the Executive will have substantial contacts with New York.

         The validity, interpretation and performance of this Agreement shall be
governed by, and construed in accordance with, the internal law of New York,
without giving effect to conflict of law principles. Both parties agree that the
exclusive venue for any action, demand, claim or counterclaim relating to the
terms and provisions of Sections 4, 5, 6 and 7 of this Agreement, or to their
breach, shall be in the state or federal courts located in the State and County
of New York and that such courts shall have personal jurisdiction over the
parties to this Agreement.

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12.      Miscellaneous.

         (a) Assignment. The Executive acknowledges and agrees that the rights
and obligations of the Company under this Agreement may be assigned by the
Company to any successors in interest. The Executive further acknowledges and
agrees that this Agreement is personal to the Executive and that the Executive
may not assign any rights or obligations hereunder.

         (b) Withholding. All salary and bonus payments required to be made by
the Company to the Executive under this Agreement shall be subject to
withholding taxes, social security and other payroll deductions in accordance
with the Company's policies applicable to employees of the Company at the
Executive's level.

         (c) Entire Agreement. This Agreement sets forth the entire agreement
between the parties and supersedes any prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment.

         (d) Amendments. Any attempted modification of this Agreement will not
be effective unless signed by an officer of the Company and the Executive.

(e) Waiver of Breach. The Executive understands that a breach of any provision
of this Agreement may only be waived by an officer of the Company. The waiver by
the Company of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach.

         (f) Severability. If any provision of this Agreement should, for any
reason, be held invalid or unenforceable in any respect by a court of competent
jurisdiction, then the remainder of this Agreement, and the application of such
provision in circumstances other than those as to which it is so declared
invalid or unenforceable, shall not be affected thereby, and each such provision
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.

         (g) Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered by private messenger, private overnight mail service, or facsimile as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):

                  If to the Company:

                  Predictive Systems, Inc.
                  19 West 44th Street
                  New York, New York 10036
                  Fax number:  212.898.1331
                  Attn:  General Counsel

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                  If to Executive:

                  To such home address as the Executive shall provide to the
Company

         (h) Survival. The Executive and the Company agree that certain
provisions of this Agreement shall survive the expiration or termination of this
Agreement and the termination of the Executive's employment with the Company.
Such provisions shall be limited to those within this Agreement which, by their
express and implied terms, obligate either party to perform beyond the
termination of the Executive's employment or termination of this Agreement.

         (i) Disclosure and Confidentiality. The Executive agrees to provide,
and agrees that the Company similarly may provide in its discretion, a copy of
the covenants contained in this Agreement to any business or enterprise which
the Company may directly or indirectly own, manage, operate, finance, join,
control or in which the Company participates in the ownership, management,
operation, financing or control, or with which the Company may be connected or
may become connected as an officer, director, executive, partner, principal,
agent, representative, consultant or otherwise. The Executive also agrees that
the Company may disclose a copy of this Agreement if legally required to do so,
and in connection with a partnering transaction or financing, assuming that an
appropriate confidentiality agreement is in place. The Executive further agrees
not to disclose the existence or terms of this Agreement to any person other
than the Executive's immediate family and legal, financial or accounting
professional.

         (j) Arbitration of Disputes. Any controversy or claim arising out of
this Agreement or any aspect of the Executive's relationship with the Company
including the cessation thereof (other than disputes with respect to alleged
violations of the covenants contained in Sections 4, 5, 6 or 7 hereof, and the
Company's pursuit of the remedies described in Section 8 hereof in connection
therewith) shall be resolved by arbitration in accordance with the then existing
Employment Dispute Resolution Rules of the American Arbitration Association, in
New York, New York, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. The Company shall pay the filing fees and
arbitrator's fees and parties shall split equally the costs of arbitration,
except that each party shall pay its own attorneys' fees. The parties agree that
the award of the arbitrator shall be final and binding.

         (k) Rights of Other Individuals. This Agreement confers rights solely
on the Executive and the Company. This Agreement is not a benefit plan and
confers no rights on any individual or entity other than the undersigned.

         (l) Headings. The parties acknowledge that the headings in this
Agreement are for convenience of reference only and shall not control or affect
the meaning or construction of this Agreement.

         (m) Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company and for which
the Executive may qualify by the express terms of such benefit, bonus, incentive
or other plan or program, nor shall anything herein limit or otherwise affect
such rights as the Executive may have under any other written agreements with
the Company or any of its affiliated companies which are signed by an authorized
officer of the Company.

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         (n) No Mitigation; No Offset. In the event of any termination of
his/her employment hereunder, the Executive shall be under no obligation to seek
other employment nor shall any amounts due him/her pursuant to Section 10(b) be
offset by any other compensation received by the Executive.

         (o) Advice of Counsel. The Executive and the Company hereby acknowledge
that each party has had adequate opportunity to review this Agreement, to obtain
the advice of counsel with respect to this Agreement, and to reflect upon and
consider the terms and conditions of this Agreement. The parties further
acknowledge that each party fully understands the terms of this Agreement and
has voluntarily executed this Agreement.

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the
day and year set forth below.

EXECUTIVE                                      PREDICTIVE SYSTEMS, INC.

   /s/ Gary Papilsky                           By:      /s/ Andrew Zimmerman
----------------------------                         --------------------------
GARY PAPILSKY                                  Title:   CEO
                                                     --------------------------

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                                    EXHIBIT A

                              SEPARATION AGREEMENT
                               AND GENERAL RELEASE

         This Separation Agreement and General Release ("Agreement") is made and
entered into this ____ day of _____, _____, by and between [COMPANY NAME]
(hereinafter the "Company" or "Employer") and [EMPLOYEE NAME] ("Employee")
(hereinafter collectively referred to as the "Parties"), and is made and entered
into with reference to the following facts.

                                    RECITALS

         WHEREAS, Employee was hired by the Company on or about ________, as a
____________; and

         WHEREAS, the Company and Employee have agreed to terminate their
employment relationship effective ______, ____; and

         WHEREAS, the Parties each desire to resolve any potential disputes
which exist or may exist arising out of Employee's employment with the Company
and/or the termination thereof.

         NOW THEREFORE, in consideration of the covenants and promises contained
herein, the Parties hereto agree as follows:

                                    AGREEMENT

         1. Agreement By the Company. In exchange for Employee's agreement to be
bound by the terms of this entire Agreement, including but not limited to the
Release of Claims in paragraph 3, the Company agrees to provide Employee with a
lump-sum payment in the amount of __________ dollars ($________), less statutory
deductions and withholdings, which amount represents _____ (_)
weeks'/months'/years' salary at Employee's rate of pay as of the Termination
Date, to be paid within ten (10) days of the Company's receipt of this
Agreement, fully executed by Employee.

         Employee acknowledges that, absent this Agreement, s/he has no legal,
contractual or other entitlement to the consideration set forth in this
paragraph and that the amount set forth in this paragraph constitute valid and
sufficient consideration for Employee's release of claims and other obligations
set forth herein.

         2. Release of Claims. Employee hereby expressly waives, releases,
acquits and forever discharges the Company and its divisions, subsidiaries,
affiliates, parents, related entities, partners, officers, directors,
shareholders, investors, executives, managers, employees, agents, attorneys,
representatives, successors and assigns (hereinafter collectively referred to as
"Releasees"), from any and all claims, demands, and causes of action which
Employee has or claims to have, whether known or unknown, of whatever nature,
which exist or may exist on Employee's behalf from the beginning of time up to
and including the date of this Agreement. As used in this paragraph, "claims,"
"demands," and "causes of action" include, but are not limited to, claims based
on contract, whether express or implied, fraud, stock fraud, defamation,
wrongful termination, estoppel, equity, tort, retaliation, intellectual
property, personal injury, spoliation of evidence, emotional distress, public
policy, wage and hour law, statute or common law, claims for severance pay,
claims related to stock options and/or fringe benefits, claims for attorneys'
fees, vacation pay, debts, accounts, compensatory damages, punitive or exemplary
damages, liquidated damages, and any and all claims arising under any federal,
state, or local statute, law, or ordinance prohibiting discrimination on account
of race, color, sex, age, religion, sexual orientation, disability or national
origin, including but not limited to, the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act of 1964 as amended, the Americans with
Disabilities Act, the Family and Medical Leave Act or the Employee Retirement
Income Security Act.

<PAGE>

         3. Acceptance of Agreement/Revocation. This Agreement was received by
Employee on ______, ____. Employee may accept this Agreement by returning a
signed original to the Company. This Agreement shall be withdrawn if not
accepted in the above manner on or before _______.

         4. Confidentiality. Employee understands and agrees that this
Agreement, and the matters discussed in negotiating its terms, are entirely
confidential. It is therefore expressly understood and agreed that Employee will
not reveal, discuss, publish or in any way communicate any of the terms, amount
or fact of this Agreement to any person, organization or other entity, with the
exception of his/her immediate family members and professional representatives,
unless required by subpoena or court order. Employee further agrees that s/he
will not, at any time in the future, make any statements to any third parties
that disparage any of the Releasees personally or professionally.

         5. [New York] Law Applies. This Agreement, in all respects, shall be
interpreted, enforced and governed by and under the laws of the State of [New
York]. Any and all actions relating to this Agreement shall be filed and
maintained in the federal and/or state courts located in the State [and County
of New York], and the parties consent to the jurisdiction of such courts. In any
action arising out of this Agreement, or involving claims barred by this
Agreement, the prevailing party shall be entitled to recover all costs of suit,
including reasonable attorneys' fees.

         6. Voluntary Agreement. EMPLOYEE UNDERSTANDS AND AGREES THAT S/HE MAY
BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT, AND REPRESENTS
THAT S/HE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, WITH A FULL
UNDERSTANDING OF AND IN AGREEMENT WITH ALL OF ITS TERMS.

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the dates provided below.

DATED:  _____________________, ____         [COMPANY NAME]

                                            By:  __________________________

                                            Its: __________________________

DATED:  _____________________, ____         [EMPLOYEE NAME]

                                            ____________________________<PAGE>

                                                                    EXHIBIT 10.1

                                 LIL MARC, INC.

            2002 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN

                                 1. DEFINITIONS.

Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Lil Marc, Inc. 2002 Employee, Director and
Consultant Stock Option Plan, have the following meanings:

         Administrator means the Board of Directors, unless it has delegated
         power to act on its behalf to the Committee, in which case the
         Administrator means the Committee.

         Affiliate means a corporation which, for purposes of Section 424 of the
         Code, is a parent or subsidiary of the Company, direct or indirect.

         Board of Directors means the Board of Directors of the Company.

         Code means the United States Internal Revenue Code of 1986, as amended.

         Committee means the committee of the Board of Directors to which the
         Board of Directors has delegated power to act under or pursuant to the
         provisions of the Plan.

         Common Stock means shares of the Company's common stock, $0.01 par
         value per share.

         Company means Lil Marc, Inc., a Nevada corporation.

         Disability or Disabled means permanent and total disability as defined
         in Section 22(e)(3) of the Code.

         Employee means any employee of the Company or of an Affiliate
         (including, without limitation, an employee who is also serving as an
         officer or director of the Company or of an Affiliate), designated by
         the Administrator to be eligible to be granted one or more Options
         under the Plan.

         Fair Market Value of a Share of Common Stock means:

         (1) If the Common Stock is listed on a national securities exchange or
         traded in the over-the-counter market and sales prices are regularly
         reported for the Common Stock, the closing or last price of the Common
         Stock on the Composite Tape or other comparable reporting system for
         the trading day immediately preceding the applicable date;

         (2) If the Common Stock is not traded on a national securities exchange
         but is traded on the over-the-counter market, if sales prices are not
         regularly reported for the Common Stock for the trading day referred to
         in clause (1), and if bid and asked prices for the Common Stock are
         regularly reported, the mean between the bid and the asked price for
         the Common Stock at the close of trading in the over-the-counter market
         for the trading day on which Common Stock was traded immediately
         preceding the applicable date; and

         (3) If the Common Stock is neither listed on a national securities
         exchange nor traded in the over-the-counter market, such value as the
         Administrator, in good faith, shall determine.

         ISO means an option meant to qualify as an incentive stock option under
         Section 422 of the Code.

         Non-Qualified Option means an option which is not intended to qualify
         as an ISO.

         Option means an ISO or Non-Qualified Option granted under the Plan.

         Option Agreement means an agreement between the Company and a
         Participant delivered pursuant to the Plan, in such form as the
         Administrator shall approve.

         Participant means an Employee, director or consultant of the Company or
         an Affiliate to whom one or more Options are granted under the Plan. As
         used herein, "Participant" shall include "Participant's Survivors"
         where the context requires.

         Plan means this Lil Marc, Inc. 2002 Employee, Director and Consultant
         Stock Option Plan.

         Shares means shares of the Common Stock as to which Options have been
         or may be granted under the Plan or any shares of capital stock into
         which the Shares are changed or for which they are exchanged within the
         provisions of Paragraph 3 of the Plan. The Shares issued upon exercise
         of Options granted under the Plan may be authorized and unissued shares
         or shares held by the Company in its treasury, or both.

         Survivor means a deceased Participant's legal representatives and/or
         any person or persons who acquired the Participant's rights to an
         Option by will or by the laws of descent and distribution.

2.    PURPOSES OF THE PLAN.

The Plan is intended to encourage ownership of Shares by Employees and directors
of and certain consultants to the Company in order to attract such people, to
induce them to work for the benefit of the Company or of an Affiliate and to
provide additional incentive for them to promote the success of the Company or
of an Affiliate. The Plan provides for the granting of ISOs and Non-Qualified
Options.

3.    SHARES SUBJECT TO THE PLAN.

The number of Shares which may be issued from time to time pursuant to this Plan
shall be 3,500,000, or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 16 of the Plan.

If an Option ceases to be "outstanding", in whole or in part, the Shares which
were subject to such Option shall be available for the granting of other Options
under the Plan. Any Option shall be treated as "outstanding" until such Option
is exercised in full, or terminates or expires under the provisions of the Plan,
or by agreement of the parties to the pertinent Option Agreement.

4.    ADMINISTRATION OF THE PLAN.

The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator. Subject to the provisions of the
Plan, the Administrator is authorized to:

         a. Interpret the provisions of the Plan or of any Option or Option
         Agreement and to make all rules and determinations which it deems
         necessary or advisable for the administration of the Plan;

         b. Determine which employees of the Company or of an Affiliate shall be
         designated as Employees and which of the Employees, directors and
         consultants shall be granted Options;

         c. Specify the terms and conditions upon which an Option or Options may
         be granted; and

         d. Adopt any sub-plans applicable to residents of any specified
         jurisdiction as it deems necessary or appropriate in order to comply
         with or take advantage of any tax laws applicable to the Company or to
         Plan Participants or to otherwise facilitate the administration of the
         Plan, which sub-plans may include additional restrictions or conditions
         applicable to Options or Shares acquired upon exercise of Options.

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee.

5.    ELIGIBILITY FOR PARTICIPATION.

The Administrator will, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be an Employee, director or
consultant of the Company or of an Affiliate at the time an Option is granted.
Notwithstanding the foregoing, the Administrator may authorize the grant of an
Option to a person not then an employee, director or consultant of the Company
or of an Affiliate; provided, however, that the actual grant of such Option
shall be conditioned upon such person becoming eligible to become a Participant
at or prior to the time of the execution of the Option Agreement evidencing such
Option. ISOs may be granted only to Employees. Non-Qualified Options may be
granted to any Employee, director or consultant of the Company or an Affiliate.
The granting of any Option to any individual shall neither entitle that
individual to, nor disqualify him or her from, participation in any other grant
of Options.

6.    TERMS AND CONDITIONS OF OPTIONS.

Each Option shall be set forth in writing in an Option Agreement, duly executed
by the Company and, to the extent required by law or requested by the Company,
by the Participant. The Administrator may provide that Options be granted
subject to such terms and conditions, consistent with the terms and conditions
specifically required under this Plan, as the Administrator may deem appropriate
including, without limitation, subsequent approval by the shareholders of the
Company of this Plan or any amendments thereto. The Option Agreements shall be
subject to at least the following terms and conditions:

          A. Non-Qualified Options: Each Option intended to be a Non-Qualified
          Option shall be subject to the terms and conditions which the
          Administrator determines to be appropriate and in the best interest of
          the Company, subject to the following minimum standards for any such
          Non-Qualified Option:

          a. Option Price: Each Option Agreement shall state the option price
          (per share) of the Shares covered by each Option, which option price
          shall be determined by the Administrator but shall not be less than
          the par value of the Common Stock.

          b. Each Option Agreement shall state the number of Shares to which it
          pertains;

          c. Each Option Agreement shall state the date or dates on which it
          first is exercisable and the date after which it may no longer be
          exercised, and may provide that the Option rights accrue or become
          exercisable in installments over a period of months or years, or upon
          the occurrence of certain conditions or the attainment of stated goals
          or events; and

          d. Exercise of any Option may be conditioned upon the Participant's
          execution of a Share purchase agreement in form satisfactory to the
          Administrator providing for certain protections for the Company and
          its other shareholders, including requirements that:

                  i. The Participant's or the Participant's Survivors' right to
                  sell or transfer the Shares may be restricted; and

                  ii. The Participant or the Participant's Survivors may be
                  required to execute letters of investment intent and must also
                  acknowledge that the Shares will bear legends noting any
                  applicable restrictions.

                  B. ISOs: Each Option intended to be an ISO shall be issued
                  only to an Employee and be subject to the following terms and
                  conditions, with such additional restrictions or changes as
                  the Administrator determines are appropriate but not in
                  conflict with Section 422 of the Code and relevant regulations
                  and rulings of the Internal Revenue Service:

                  a. Minimum standards: The ISO shall meet the minimum standards
                  required of Non-Qualified Options, as described in Paragraph
                  6(A) above, except clause (a) thereunder.

                  b. Option Price: Immediately before the ISO is granted, if the
                  Participant owns, directly or by reason of the applicable
                  attribution rules in Section 424(d) of the Code:

                  i. 10% or less of the total combined voting power of all
                  classes of stock of the Company or an Affiliate, the Option
                  price per share of the Shares covered by each ISO shall not be
                  less than 100% of the Fair Market Value per share of the
                  Shares on the date of the grant of the Option; or

                  ii. More than 10% of the total combined voting power of all
                  classes of stock of the Company or an Affiliate, the Option
                  price per share of the Shares covered by each ISO shall not be
                  less than 110% of the said Fair Market Value on the date of
                  grant.

                  c. Term of Option: For Participants who own:

                  i. 10% or less of the total combined voting power of all
                  classes of stock of the Company or an Affiliate, each ISO
                  shall terminate not more than ten years from the date of the
                  grant or at such earlier time as the Option Agreement may
                  provide; or

                  ii. More than 10% of the total combined voting power of all
                  classes of stock of the Company or an Affiliate, each ISO
                  shall terminate not more than five years from the date of the
                  grant or at such earlier time as the Option Agreement may
                  provide.

                  d. Limitation on Yearly Exercise: The Option Agreements shall
                  restrict the amount of ISOs which may become exercisable in
                  any calendar year (under this or any other ISO plan of the
                  Company or an Affiliate) so that the aggregate Fair Market
                  Value (determined at the time each ISO is granted) of the
                  stock with respect to which ISOs are exercisable for the first
                  time by the Participant in any calendar year does not exceed
                  $100,000.

7. EXERCISE OF OPTIONS AND ISSUE OF SHARES.

An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company or its designee, together with provision for
payment of the full purchase price in accordance with this Paragraph for the
Shares as to which the Option is being exercised, and upon compliance with any
other condition(s) set forth in the Option Agreement. Such notice shall be
signed by the person exercising the Option, shall state the number of Shares
with respect to which the Option is being exercised and shall contain any
representation required by the Plan or the Option Agreement. Payment of the
purchase price for the Shares as to which such Option is being exercised shall
be made (a) in United States dollars in cash or by check, or (b) at the
discretion of the Administrator, through delivery of shares of Common Stock
having

         a Fair Market Value equal as of the date of the exercise to the cash
         exercise price of the Option and held for at least six months, or (c)
         at the discretion of the Administrator, by delivery of the grantee's
         personal note, for full, partial or no recourse, bearing interest
         payable not less than annually at no less than 100% of the applicable
         Federal rate, as defined in Section 1274(d) of the Code, with or
         without the pledge of such Shares as collateral, or (d) at the
         discretion of the Administrator, in accordance with a cashless exercise
         program established with a securities brokerage firm, and approved by
         the Administrator, or (e) at the discretion of the Administrator, by
         any combination of (a), (b), (c) and (d) above. Notwithstanding the
         foregoing, the Administrator shall accept only such payment on exercise
         of an ISO as is permitted by Section 422 of the Code.

The Company shall then reasonably promptly deliver the Shares as to which such
Option was exercised to the Participant (or to the Participant's Survivors, as
the case may be). In determining what constitutes "reasonably promptly," it is
expressly understood that the issuance and delivery of the Shares may be delayed
by the Company in order to comply with any law or regulation (including, without
limitation, state securities or "blue sky" laws) which requires the Company to
take any action with respect to the Shares prior to their issuance. The Shares
shall, upon delivery, be evidenced by an appropriate certificate or certificates
for fully paid, non-assessable Shares.

The Administrator shall have the right to accelerate the date of exercise of any
installment of any Option; provided that the Administrator shall not accelerate
the exercise date of any installment of any Option granted to any Employee as an
ISO (and not previously converted into a Non-Qualified Option pursuant to
Paragraph 19) if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in Paragraph 6.B.d.

The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made only after
the Administrator determines whether such amendment would constitute a
"modification" of any Option which is an ISO (as that term is defined in Section
424(h) of the Code) or would cause any adverse tax consequences for the holder
of such ISO.

8.    RIGHTS AS A SHAREHOLDER.

No Participant to whom an Option has been granted shall have rights as a
shareholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.

9.    ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.

By its terms, an Option granted to a Participant shall not be transferable by
the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as approved by the Administrator in its discretion and set
forth in the applicable Option Agreement. Notwithstanding the foregoing, an ISO
transferred except in compliance with clause (i) above shall no longer qualify
as an ISO. The designation of a beneficiary of an Option by a Participant, with
the prior approval of the Administrator and in such form as the Administrator
shall prescribe, shall not be deemed a transfer prohibited by this Paragraph.
Except as provided above, an Option shall be exercisable, during the
Participant's lifetime, only by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon an Option, shall be null and void.

10. EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
DISABILITY.

Except as otherwise provided in a Participant's Option Agreement, in the event
of a termination of service (whether as an employee, director or consultant)
with the Company or an Affiliate before the Participant has exercised an Option,
the following rules apply:

         a. A Participant who ceases to be an employee, director or consultant
         of the Company or of an Affiliate (for any other reason than
         termination "for cause", Disability, or death for which events there
         are special rules in Paragraphs 11, 12, and 13, respectively), may
         exercise any Option granted to him or her to the extent that the Option
         is exercisable on the date of such termination of service, but only
         within such term as the Administrator has designated in a Participant's
         Option Agreement.

         b. Except as provided in Subparagraph (c) below, or Paragraph 12 or 13,
         in no event may an Option intended to be an ISO, be exercised later
         than ninety (90) days after the Participant's termination of
         employment.

         c. The provisions of this Paragraph, and not the provisions of
         Paragraph 12 or 13, shall apply to a Participant who subsequently
         becomes Disabled or dies after the termination of employment, director
         status or consultancy, provided, however, in the case of a
         Participant's Disability or death within ninety (90) days after the
         termination of employment, director status or consultancy, the
         Participant or the Participant's Survivors may exercise the Option
         within one year after the date of the Participant's termination of
         service, but in no event after the date of expiration of the term of
         the Option.

         d. Notwithstanding anything herein to the contrary, if subsequent to a
         Participant's termination of employment, termination of director status
         or termination of consultancy, but prior to the exercise of an Option,
         the Board of Directors determines that, either prior or subsequent to
         the Participant's termination, the Participant engaged in conduct which
         would constitute "cause", then such Participant shall forthwith cease
         to have any right to exercise any Option.

         e. A Participant to whom an Option has been granted under the Plan who
         is absent from work with the Company or with an Affiliate because of
         temporary disability (any disability other than a permanent and total
         Disability as defined in Paragraph 1 hereof), or who is on leave of
         absence for any purpose, shall not, during the period of any such
         absence, be deemed, by virtue of such absence alone, to have terminated
         such Participant's employment, director status or consultancy with the
         Company or with an Affiliate, except as the Administrator may otherwise
         expressly provide.

         f. Except as required by law or as set forth in a Participant's Option
         Agreement, Options granted under the Plan shall not be affected by any
         change of a Participant's status within or among the Company and any
         Affiliates, so long as the Participant continues to be an employee,
         director or consultant of the Company or any Affiliate.

11. EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".

Except as otherwise provided in a Participant's Option Agreement, the following
rules apply if the Participant's service (whether as an employee, director or
consultant) with the Company or an Affiliate is terminated "for cause" prior to
the time that all his or her outstanding Options have been exercised:

         a. All outstanding and unexercised Options as of the time the
         Participant is notified his or her service is terminated "for cause"
         will immediately be forfeited.

         b. For purposes of this Plan, "cause" shall include (and is not limited
         to) dishonesty with respect to the Company or any Affiliate,
         insubordination, substantial malfeasance or non-feasance of duty,
         unauthorized disclosure of confidential information, breach by the
         Participant of any provision of any employment, consulting, advisory,
         nondisclosure, non-competition or similar agreement between the
         Participant and the Company or any Affiliate, and conduct substantially
         prejudicial to the business of the Company or any Affiliate. The
         determination of the Administrator as to the existence of "cause" will
         be conclusive on the Participant and the Company.

         c. "Cause" is not limited to events which have occurred prior to a
         Participant's termination of service, nor is it necessary that the
         Administrator's finding of "cause" occur prior to termination. If the
         Administrator determines, subsequent to a Participant's termination of
         service but prior to the exercise of an Option, that either prior or
         subsequent to the Participant's termination the Participant engaged in
         conduct which would constitute "cause," then the right to exercise any
         Option is forfeited.

         d. Any definition in an agreement between the Participant and the
         Company or an Affiliate, which contains a conflicting definition of
         "cause" for termination and which is in effect at the time of such
         termination, shall supersede the definition in this Plan with respect
         to that Participant.

12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.

Except as otherwise provided in a Participant's Option Agreement, a Participant
who ceases to be an employee, director or consultant of the Company or of an
Affiliate by reason of Disability may exercise any Option granted to such
Participant:

         a. To the extent that the Option has become exercisable but has not
         been exercised on the date of Disability; and

         b. In the event rights to exercise the Option accrue periodically, to
         the extent of a pro rata portion through the date of Disability of any
         additional vesting rights that would have accrued on the next vesting
         date had the Participant not become Disabled. The proration shall be
         based upon the number of days accrued in the current vesting period
         prior to the date of Disability.

A Disabled Participant may exercise such rights only within the period ending
one year after the date of the Participant's termination of employment,
directorship or consultancy, as the case may be, notwithstanding that the
Participant might have been able to exercise the Option as to some or all of the
Shares on a later date if the Participant had not become Disabled and had
continued to be an employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.

The Administrator shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.

13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

Except as otherwise provided in a Participant's Option Agreement, in the event
of the death of a Participant while the Participant is an employee, director or
consultant of the Company or of an Affiliate, such Option may be exercised by
the Participant's Survivors:

         a. To the extent that the Option has become exercisable but has not
         been exercised on the date of death; and

         b. In the event rights to exercise the Option accrue periodically, to
         the extent of a pro rata portion through the date of death of any
         additional vesting rights that would have accrued on the next vesting
         date had the Participant not died. The proration shall be based upon
         the number of days accrued in the current vesting period prior to the
         Participant's date of death.

If the Participant's Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one year after the date of death
of such Participant, notwithstanding that the decedent might have been able to
exercise the Option as to some or all of the Shares on a later date if he or she
had not died and had continued to be an employee, director or consultant or, if
earlier, within the originally prescribed term of the Option.

14.   PURCHASE FOR INVESTMENT.

Unless the offering and sale of the Shares to be issued upon the particular
exercise of an Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:

         a. The person(s) who exercise(s) such Option shall warrant to the
         Company, prior to the receipt of such Shares, that such person(s) are
         acquiring such Shares for their own respective accounts, for
         investment, and not with a view to, or for sale in connection with, the
         distribution of any such Shares, in which event the person(s) acquiring
         such Shares shall be bound by the provisions of the following legend
         which shall be endorsed upon the certificate(s) evidencing their Shares
         issued pursuant to such exercise or such grant:

         "The shares represented by this certificate have been taken for
         investment and they may not be sold or otherwise transferred by any
         person, including a pledgee, unless (1) either (a) a Registration
         Statement with respect to such shares shall be effective under the
         Securities Act of 1933, as amended, or (b) the Company shall have
         received an opinion of counsel satisfactory to it that an exemption
         from registration under such Act is then available, and (2) there shall
         have been compliance with all applicable state securities laws."

         b. At the discretion of the Administrator, the Company shall have
         received an opinion of its counsel that the Shares may be issued upon
         such particular exercise in compliance with the 1933 Act without
         registration thereunder.

15. DISSOLUTION OR LIQUIDATION OF THE COMPANY.

Upon the dissolution or liquidation of the Company, all Options granted under
this Plan which as of such date shall not have been exercised will terminate and
become null and void; provided, however, that if the rights of a Participant or
a Participant's Survivors have not otherwise terminated and expired, the
Participant or the Participant's Survivors will have the right immediately prior
to such dissolution or liquidation to exercise any Option to the extent that the
Option is exercisable as of the date immediately prior to such dissolution or
liquidation.

16.   ADJUSTMENTS.

Upon the occurrence of any of the following events, a Participant's rights with
respect to any Option granted to him or her hereunder which has not previously
been exercised in full shall be adjusted as hereinafter provided, unless
otherwise specifically provided in the Participant's Option Agreement:

A. Stock Dividends and Stock Splits. If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of such Option shall be appropriately increased or decreased
proportionately and appropriate adjustments shall be made in the purchase price
per share to reflect such events. If additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of shares of
Common Stock deliverable upon the exercise of such Option may be appropriately
increased or decreased proportionately and appropriate adjustments may be made
in the purchase price per share to reflect such events.

B. Corporate Transactions. If the Company is to be consolidated with or acquired
by another entity in a merger, sale of all or substantially all of the Company's
assets other than a transaction to merely change the state of incorporation (a
"Corporate Transaction"), the Administrator or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor
Board"), shall, as to outstanding Options, either (i) make appropriate provision
for the continuation of such Options by substituting on an equitable basis for
the Shares then subject to such Options either the consideration payable with
respect to the outstanding shares of Common Stock in connection with the
Corporate Transaction or securities of any successor or acquiring entity; or
(ii) upon written notice to the Participants, provide that all Options must be
exercised (either to the extent then exercisable or, at the discretion of the
Administrator or, upon a change of control of the Company, all Options being
made fully exercisable for purposes of this Subparagraph), within a specified
number of days of the date of such notice, at the end of which period the
Options shall terminate; or (iii) terminate all Options in exchange for a cash
payment equal to the excess of the Fair Market Value of the Shares subject to
such Options (either to the extent then exercisable or, at the discretion of the
Administrator, all Options being made fully exercisable for purposes of this
Subparagraph) over the exercise price thereof.

C. Recapitalization or Reorganization. In the event of a recapitalization or
reorganization of the Company other than a Corporate Transaction pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, a Participant upon exercising
an Option after the recapitalization or reorganization shall be entitled to
receive for the purchase price paid upon such exercise the number of replacement
securities which would have been received if such Option had been exercised
prior to such recapitalization or reorganization.

D. Modification of ISOs. Notwithstanding the foregoing, any adjustments made
pursuant to Subparagraph A, B or C above with respect to ISOs shall be made only
after the Administrator determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424(h) of the
Code) or would cause any adverse tax consequences for the holders of such ISOs.
If the Administrator determines that such adjustments made with respect to ISOs
would constitute a modification of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such "modification" on his or her income tax
treatment with respect to the ISO.

17. ISSUANCES OF SECURITIES.

Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock 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 Options. Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company.

18.   FRACTIONAL SHARES.

No fractional shares shall be issued under the Plan and the person exercising
such right shall receive from the Company cash in lieu of such fractional shares
equal to the Fair Market Value thereof.

19. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. At the time of such conversion,
the Administrator (with the consent of the Participant) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.

20.   WITHHOLDING.

In the event that any federal, state, or local income taxes, employment taxes,
Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other amounts
are required by applicable law or governmental regulation to be withheld from
the Participant's salary, wages or other remuneration in connection with the
exercise of an Option or a Disqualifying Disposition (as defined in Paragraph
21), the Company may withhold from the Participant's compensation, if any, or
may require that the Participant advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Participant, the
statutory minimum amount of such withholdings unless a different withholding
arrangement, including the use of shares of the Company's Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law). For
purposes hereof, the fair market value of the shares withheld for purposes of
payroll withholding shall be determined in the manner provided in Paragraph 1
above, as of the most recent practicable date prior to the date of exercise. If
the fair market value of the shares withheld is less than the amount of payroll
withholdings required, the Participant may be required to advance the difference
in cash to the Company or the Affiliate employer. The Administrator in its
discretion may condition the exercise of an Option for less than the then Fair
Market Value on the Participant's payment of such additional withholding.

21. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

Each Employee who receives an ISO must agree to notify the Company in writing
immediately after the Employee makes a Disqualifying Disposition of any shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is
defined in Section 424(c) of the Code and includes any disposition (including
any sale or gift) of such shares before the later of (a) two years after the
date the Employee was granted the ISO, or (b) one year after the date the
Employee acquired Shares by exercising the ISO, except as otherwise provided in
Section 424(c) of the Code. If the Employee has died before such stock is sold,
these holding period requirements do not apply and no Disqualifying Disposition
can occur thereafter.

22.   TERMINATION OF THE PLAN.

The Plan will terminate on July 3, 2012, the date which is ten years from the
earlier of the date of its adoption by the Board of Directors and the date of
its approval by the shareholders. The Plan may be terminated at an earlier date
by vote of the shareholders or the Board of Directors of the Company; provided,
however, that any such earlier termination shall not affect any Option
Agreements executed prior to the effective date of such termination.

23.   AMENDMENT OF THE PLAN AND AGREEMENTS.

The Plan may be amended by the shareholders of the Company. The Plan may also be
amended by the Administrator, including, without limitation, to the extent
necessary to qualify any or all outstanding Options granted under the Plan or
Options to be granted under the Plan for favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code, and to the extent necessary to
qualify the shares issuable upon exercise of any outstanding Options granted, or
Options to be granted, under the Plan for listing on any national securities
exchange or quotation in any national automated quotation system of securities
dealers. Any amendment approved by the Administrator which the Administrator
determines is of a scope that requires shareholder approval shall be subject to
obtaining such shareholder approval. Any modification or amendment of the Plan
shall not, without the consent of a Participant, adversely affect his or her
rights under an Option previously granted to him or her. With the consent of the
Participant affected, the Administrator may amend outstanding Option Agreements
in a manner which may be adverse to the Participant but which is not
inconsistent with the Plan. In the discretion of the Administrator, outstanding
Option Agreements may be amended by the Administrator in a manner which is not
adverse to the Participant.

24.   EMPLOYMENT OR OTHER RELATIONSHIP.

Nothing in this Plan or any Option Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.

25.   GOVERNING LAW.

This Plan shall be construed and enforced in accordance with the law of the
State of Nevada.

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