Document:

Unassociated Document

Advaxis, Inc.

212 Carnegie Center, Suite 206

Princeton, NJ 08540

                                                                                 January 12, 2005

Mr. Robert Harvey

c/o Harvest Advaxis, LLC

30052 Aventura, Suite C

Rancho Santa Margarita, CA 92688

Dear Robert:

 

This will confirm the agreement of Advaxis, Inc., a Colorado Corporation (the “Company”) to grant your request to be allowed to participate as an observer at all meetings of the Board of Directors including receipt of written documents, reports and presentations provided to the Directors of the Company and to receive copies of written consents of the Directors at the time presented to the Directors for their consideration. Your participation as an observer is based the desire of the Company to have the benefit of your financial sophistication and experience in connection with a
proposed financing of the Company through the offering and sale of its equity or debt of the Company. 

Your participation however is based on your understanding that as an observer you will be subject to the same limitations and obligations to which the Directors are subject with respect to confidentiality of information and with respect to transactions in the securities of the Company.

You shall be responsible for all reasonable out-of-pocket expenses incurred by you in connection with your attendance at the meetings of the Board as an observer.

Your right to be an observer shall terminate on August 31, 2005 unless on or before that date Harvest Advaxis, LLC (“Harvest”) invests an additional $5 million of equity capital in the Company. Notwithstanding the foregoing sentence, the Company shall not be required to accept an equity investment from Harvest or any other investor, on certain terms or any terms; provided, however that upon mutual agreement of Company and you, in writing, the term of this agreement may extend for an additional one year period.

	
	 	 	 
	

	 

If the foregoing correctly sets forth our agreement kindly execute, at the place indicated, and return a copy of this letter

 

 

	 	 	Very truly yours 	 
	 	 	/s/ J. Todd Derbin              	 
	 	 	J. Todd Derbin 	 
	 	 	
President and Chief Executive Officer
	 
	 	 	 	 
	Agreed and accepted: 	 	 	 
	 	 	 	 
	By: /s/ Robert Harvey                     	 	 	 
	Robert HarveyTISSERA INC.

                        THE 2004 GLOBAL SHARE OPTION PLAN

<PAGE>

         This Plan, as amended from time to time,  shall be known as the Tissera
         Inc. 2004 Global Share Option Plan.

1.       PURPOSE OF THE PLAN

         The Plan is intended to provide an incentive  to retain,  in the employ
         of the  Company  (as defined  below) and its  Subsidiaries  (as defined
         below),  persons of training,  experience  and ability;  to attract new
         employees,  officers,  directors,   consultants  and  advisers  to  the
         Company;  to encourage the sense of  proprietorship of such persons and
         to stimulate the active interest of such persons in the development and
         financial  success of the Company by providing them with  opportunities
         to purchase shares in the Company.

2.       DEFINITIONS

         For purposes of interpreting the Plan and related documents  (including
         the Option  Agreement and the  appendixes  to the Plan),  the following
         definitions shall apply:

         2.1      "BOARD" means the Board of Directors of the Company.

         2.2      "CAUSE"  means (i)  conviction of any felony  involving  moral
                  turpitude or affecting the Company or its affiliates; (ii) any
                  refusal to carry out a reasonable  directive of the  Company's
                  Board,  Chief  Executive  Officer  or any  of  the  Optionee's
                  supervisors, which involves the business of the Company or its
                  affiliates  and could  have  been  lawfully  performed;  (iii)
                  embezzlement of funds of the Company or its  affiliates;  (iv)
                  any  breach of the  Optionee's  fiduciary  duties or duties of
                  care  to the  Company  or its  affiliates;  including  without
                  limitation  disclosure  of  confidential  information  of  the
                  Company or its  affiliates to any third  parties;  and (v) any
                  conduct   (other  than  conduct  in  good  faith)   reasonably
                  determined  by the Board to be materially  detrimental  to the
                  Company or its affiliates.

         2.3      "CHAIRMAN" means the Chairman of the Committee.

         2.4      "CODE" means the United States Internal  Revenue Code of 1986,
                  as now in effect or as hereafter amended or any successor act.

         2.5      "COMMITTEE"  means  a  compensation  committee  of the  Board,
                  designated  from time to time by the  resolution of the Board,
                  which shall consist of no fewer than two members of the Board.
                  The  Committee  shall  consist of  directors  who are "outside
                  directors"  as  defined  in  Section  162(m)  of the  Code and
                  "Non-Employee  Directors" as defined in Rule 16b-3 promulgated
                  by the Securities and Exchange  Commission  under the Exchange
                  Act.

         2.7      "COMPANY"  means Tissera Inc., an US corporation  incorporated
                  under the laws of Washington State.

                                       2
<PAGE>

         2.8      "DATE OF  GRANT"  means  the date of grant of an  Option  that
                  shall   be   determined   by  the   Board   pursuant   to  the
                  recommendation  of the  Committee  as set forth in the  Option
                  Agreement.

         2.9      "EMPLOYEE"  means a person who is  employed  by the Company or
                  any Subsidiary.

         2.10     "EXCHANGE ACT" means the United States Securities Exchange Act
                  of 1934,  as now in  effect  or as  hereafter  amended  or any
                  successor act.

         2.11     "EXPIRATION  DATE"  means the date upon which an Option  shall
                  expire, as set forth in Section 8.2 of the Plan.

         2.12     "FAIR MARKET VALUE" means as of any date, the value of a Share
                  determined as follows:

                  (i)      If the  Shares are  listed on any  established  stock
                           exchange  or  a  national  market  system,  including
                           without limitation the Nasdaq National Market system,
                           or the Nasdaq  SmallCap  Market of the  Nasdaq  Stock
                           Market,  the Fair  Market  Value shall be the closing
                           sale 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
                           Date of Grant or the  date of  determination,  as the
                           case may be,  Fair  Market  Value as  reported in the
                           Wall  Street  Journal,  or such  other  source as the
                           Committee deems fit;

                  (ii)     If the  Shares  are  regularly  quoted by one or more
                           recognized  securities  dealers,  but sale prices are
                           not reported, the Fair Market Value shall be the mean
                           between the highest bid and lowest  asked  prices for
                           the Shares on the last  market  trading  day prior to
                           the Date of Grant  or date of  determination,  as the
                           case may be; 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 Committee.

         2.13     "OPTION"  means  an  option  to  purchase  one or more  Shares
                  pursuant to the Plan.

         2.14     "OPTION  AGREEMENT"  means the share  option  agreement  to be
                  signed  between the Company and an Optionee that evidences and
                  sets out the terms and conditions of an Option.

         2.15     "OPTIONEE"  means a person  who has been  granted  or holds an
                  Option under the Plan.

         2.16     "PLAN" means this 2004 Global Share Option Plan.

         2.17     "PURCHASE  PRICE"  means the  exercise  price to be paid by an
                  Optionee for each Share subject to an Option.

         2.18     "SECURITIES  ACT" means the United  States  Securities  Act of
                  1933,  as  now  in  effect  or as  hereafter  amended  or  any
                  successor act.

                                       3
<PAGE>

         2.19     "SERVICE PROVIDER" means a director,  consultant or adviser of
                  the Company or any Subsidiary.

         2.20     "SHARE"  means the common  stock,  0.0001  par  value,  of the
                  Company.

         2.21     "SUBSIDIARY"  means any company (other than the Company) which
                  now  exists  or is  hereafter  organized  or  acquired  by the
                  Company in an unbroken  chain of companies  beginning with the
                  Company  if, at the time of  granting  an Option,  each of the
                  companies  other than the last company in the  unbroken  chain
                  owns shares  representing  fifty  percent (50%) or more of the
                  total combined voting power of all classes of shares in one of
                  the other companies in such chain.

         2.22     "SUCCESSOR  COMPANY"  means  any  entity  (i) into  which  the
                  Company  is merged,  reorganized  or  consolidated  with or by
                  which the  Company  is  acquired;  (ii) that  acquires  all or
                  substantially  all of the assets of the Company;  or (iii) the
                  parent company or subsidiary of such entity.

         2.23     "TRANSACTION" means (i) a merger,  acquisition,  consolidation
                  or  reorganization  of the  Company  with  one or  more  other
                  entities in which the Company is not the surviving entity; and
                  (ii) a sale of all or  substantially  all of the assets of the
                  Company to any third party other than a Subsidiary.

         2.24     "VESTED  OPTION"  means any Option or a portion  thereof which
                  has vested according to the Vesting Dates.

         2.25     "VESTING  DATES" means,  as determined by the  Committee,  the
                  dates as of which the  Optionee  shall be entitled to exercise
                  an Option or a portion of the Option as set forth in Section 9
                  of the Plan.

3.       ADMINISTRATION OF THE PLAN

         3.1      The Board shall have the power to administer  the Plan. To the
                  extent  permitted under applicable law, the Board may delegate
                  its  powers  under  the  Plan  or  any  part  thereof  to  the
                  Committee.   Notwithstanding  the  foregoing,  the  Board  may
                  exercise,  at any  time and  from  time to  time,  any and all
                  powers  previously  delegated to the Committee with respect to
                  the Plan.

         3.2      The Committee,  if appointed,  shall select one of its members
                  as its  Chairman and shall hold its meetings at such times and
                  places as the Chairman shall  determine.  The Committee  shall
                  keep records of its meetings and shall regulate the conduct of
                  its business as it shall deem advisable.

                                       4
<PAGE>

         3.3      Subject  to the  delegation  of  powers  by the  Board and any
                  applicable  law,  the  Committee  shall  have  the  power  and
                  authority:  (i) to  recommend  to  the  Board  the  designated
                  Optionees  and the number and type of Options to be granted to
                  such Optionees;  (ii) to determine the terms and provisions of
                  the Option  Agreements  (which need not be similar)  including
                  but not  limited to the  time(s)  when and the extent to which
                  the Options may be exercised  and any  restrictions  regarding
                  transferability or forfeiture of the Options or the underlying
                  Shares;  (iii)  to  accelerate  the  vesting  schedule  of any
                  previously  granted  Option,  in  whole  or in  part;  (iv) to
                  determine  the Fair  Market  Value of the  Shares;  and (v) to
                  interpret the provisions and supervise the  administration  of
                  the Plan and  determine any other matter which is necessary or
                  desirable  for, or incidental  to, the  administration  of the
                  Plan.

         3.5      The  Board  shall  have  the   authority  to  grant,   in  its
                  discretion,  to  the  holder  of  an  outstanding  Option,  in
                  exchange for the surrender and  cancellation of such Option, a
                  new Option  having a purchase  price equal to or lower than or
                  higher  than the  Purchase  Price of the  original  Option  so
                  surrendered and canceled,  and containing such other terms and
                  conditions as the Board may  prescribe in accordance  with the
                  provisions  of the  Plan  and all  applicable  law,  provided,
                  however  that  the  rights  of  the  Optionee   shall  not  be
                  prejudiced by such action without the consent of the Optionee.

         3.6      The  interpretation  and  construction by the Committee of any
                  provision  of the Plan or of any Option  Agreement  thereunder
                  shall be final and conclusive  unless otherwise  determined by
                  the Board.

         3.7      Subject  to the  Company's  incorporation  documents  and  the
                  Company's  resolution,  and to all approvals legally required,
                  including,  but not limited to the provisions of the Companies
                  Law,  each  member  of the  Board  or the  Committee  shall be
                  indemnified  and held harmless by the Company against any cost
                  or expense (including counsel fees) reasonably incurred by him
                  or her, or any liability (including any sum paid in settlement
                  of a claim with the  approval of the  Company)  arising out of
                  any act or omission to act in connection  with the Plan unless
                  arising out of such  member's  own fraud or bad faith,  to the
                  extent permitted by applicable law. Such indemnification shall
                  be in  addition to any rights of  indemnification  such member
                  may  have as a  director  or  otherwise  under  the  Company's
                  incorporation documents,  any agreement,  vote of shareholders
                  or disinterested directors, insurance policy or otherwise.

4.       ELIGIBILITY OF PARTICIPANTS

         4.1      The  persons  eligible  to  participate  in the Plan  shall be
                  Employees  or  Service  Providers.  The  grant  of  an  Option
                  hereunder  shall neither  entitle the Optionee to  participate
                  nor  disqualify  him or her from  participating  in, any other
                  grant of Options  pursuant to the Plan or any other  option or
                  share plan of the Company or any of its affiliates.

         4.2      Anything  in the  Plan to the  contrary  notwithstanding,  all
                  grants  of  Options  to  directors   and  officers   shall  be
                  authorized and  implemented in accordance  with the provisions
                  of the Companies Law.

                                       5
<PAGE>

5.       AUTHORIZED AND RESERVED SHARES UNDER THE PLAN

         5.1      There are five million (5,000,000) Shares authorized for grant
                  under the Plan,  subject to adjustment as set forth in Section
                  7 below.  Until  termination  of the Plan the Company shall at
                  all times  reserve a  sufficient  number of Shares to meet the
                  requirements  of the Plan. Any Shares that remain unissued and
                  are not subject to outstanding  Options at the  termination of
                  the Plan shall  cease to be  reserved  for the  purpose of the
                  Plan.  Should any Option for any reason  expire or be canceled
                  prior  to  its  exercise  or  relinquishment  in  full  by the
                  Optionee,  the  Shares  subject  to such  Option  may again be
                  subject to an Option under the Plan.

         5.2      Each Option granted pursuant to the Plan shall be evidenced by
                  a  written  Option  Agreement  between  the  Company  and  the
                  Optionee,  in such form as the  Committee  shall  from time to
                  time approve.  Each Option Agreement shall state,  among other
                  matters,  the Date of Grant, the number of Shares to which the
                  Option  relates,  the type of Option granted  thereunder,  the
                  Vesting Dates,  the Purchase  Price per Share,  the Expiration
                  Date,  and such other terms and conditions as the Committee in
                  its  discretion   may   prescribe,   provided  that  they  are
                  consistent with this Plan.

6.       PURCHASE PRICE

         6.1      The Purchase Price of each Share subject to an Option shall be
                  determined   by  the   Committee  in  its  sole  and  absolute
                  discretion in accordance with  applicable law,  subject to any
                  guidelines  as may be  determined  by the  Board  from time to
                  time.  Each Option  Agreement will indicate the Purchase Price
                  to be paid by each Optionee.

         6.2      The  Purchase  Price shall be payable  upon the exercise of an
                  Option in the following acceptable forms of payment:

                  (i)      cash, check or wire transfer.

                  (ii)     at the discretion of the Committee,  through delivery
                           of Shares  (including  other  Shares  subject  to the
                           Options being  exercised)  having a Fair Market Value
                           equal  as of the  date of  exercise  to the  Purchase
                           Price of the Shares  purchased  and acquired upon the
                           exercise  of the Option,  or by a  different  form of
                           cashless exercise method through a third party broker
                           as approved by the Committee.

                  (iii)    at the discretion of the Committee,  any  combination
                           of the methods of payment  permitted by any paragraph
                           of this Section 6.2.

         6.3      The  Purchase  Price shall be  denominated,  at the  Company's
                  discretion,   in  the   currency  of  the   primary   economic
                  environment  of either the Company or the Employee  (i.e.  the
                  functional  currency of the  Company or the  currency in which
                  the Employee is paid).

                                       6
<PAGE>

7.       ADJUSTMENTS

         Upon the  occurrence of any of the  following  events,  the  Optionee's
         rights to purchase Shares under the Plan shall be adjusted as hereafter
         provided:

         7.1      In the event of a Transaction,  the  unexercised  Options then
                  outstanding  under the Plan shall be  assumed  or  substituted
                  pursuant to the provisions of Section 7.3. In the case of such
                  assumption   and/or   substitution  of  Options,   appropriate
                  adjustments  shall be made to the  Purchase  Price  and to all
                  other  terms  and  conditions  of  the  Option  Agreements  as
                  determined by the  Committee to be fair and  reasonable in the
                  circumstances,  which  determination  shall be in  their  sole
                  discretion and final. The Company shall notify the Optionee of
                  the  Transaction in such form and method as it deems fit prior
                  to the effective date of such Transaction.

         7.2      Notwithstanding  the above and subject to all applicable  law,
                  the Committee may determine that in certain Option  Agreements
                  there shall be a provision to the effect that if a Transaction
                  occurs and the Successor  Company does not agree to assume the
                  Options,  the Vesting Dates of  outstanding  Options under the
                  Plan shall be accelerated  so that any unvested  Option or any
                  portion  thereof  shall  be  immediately  vested  prior to the
                  effective   date  of  the   Transaction  or  provide  for  the
                  cancellation  of  outstanding  Options  at the  closing of the
                  Transaction,  against  payment to the Optionee of an amount in
                  cash,  securities or other assets equal to (a) the fair market
                  value of the Shares  covered by the Option as reflected  under
                  the terms of the  Transaction  (such fair  market  value being
                  determined by the Committee in its discretion),  minus (b) the
                  total Exercise price under such Option.

         7.3      For the  purposes  of section  7.1 above,  an Option  shall be
                  considered   assumed  or   substituted   if,   following   the
                  Transaction,  the  Option  confers  the right to  purchase  or
                  receive, for each Share underlying an Option immediately prior
                  to the  Transaction,  the  consideration  (whether  in shares,
                  options,  cash, or other  securities or property)  received in
                  the  Transaction  by holders of shares of the Company  held on
                  the  effective  date of the  Transaction  (and if such holders
                  were   offered  a  choice  of   consideration,   the  type  of
                  consideration  chosen  by the  holders  of a  majority  of the
                  outstanding   shares);   provided,   however,   that  if  such
                  consideration  received  in the  Transaction  is not solely in
                  common stock (or their  equivalent)  of the Successor  Company
                  the  Committee  may,  in  its  discretion   provide  that  the
                  consideration  to be received  upon the exercise of the Option
                  shall be solely in common stock (or their  equivalent)  of the
                  Successor  Company equal in their fair market value (such fair
                  market  value  being   determined  by  the  Committee  in  its
                  discretion) to the per Share consideration received by holders
                  of a majority of the outstanding  shares of the Company in the
                  Transaction;  and  provided  further  that the  Committee  may
                  determine,  in its  sole  discretion,  that  in  lieu  of such
                  assumption  or  substitution  of  Options  for  options of the
                  Successor  Company,  such Options will be substituted  for any
                  other type of asset or  property  including  cash that is fair
                  under the  circumstances as determined by the Committee in its
                  discretion.  Notwithstanding the foregoing,  in the event of a
                  Transaction,   the   Committee   may  determine  in  its  sole

                                       7
<PAGE>

                  discretion that upon completion of such Transaction, the terms
                  of any  Option  be  otherwise  amended  and  modified,  as the
                  Committee shall deem in good faith to be appropriate and fair.

         7.4      If the Company is  voluntarily  liquidated or dissolved  while
                  unexercised  Vested Options remain outstanding under the Plan,
                  the Company shall, as such time that the voluntary liquidation
                  or dissolution effectively commences, notify all the pertinent
                  Optionees of such voluntary  liquidation or  dissolution,  and
                  such  Optionees  shall then have ten (10) days to exercise any
                  unexercised  Vested  Options  held by them  at that  time,  in
                  accordance with the exercise procedure set forth herein.  Upon
                  the  expiration  of such  ten-day  period,  all the  remaining
                  outstanding Options will expire immediately.

         7.5      If the  outstanding  Shares  shall at any time be  changed  or
                  exchanged by declaration of a share dividend  (bonus  shares),
                  share split or reverse share split, combination or exchange of
                  shares, recapitalization, or any other like event by or of the
                  Company,  and as  often  as the  same  shall  occur,  then the
                  number,  class  and  kind of the  Shares  subject  to the Plan
                  and/or  subject to any  Options  previously  granted,  and the
                  Purchase Prices of such Options,  shall be  appropriately  and
                  equitably adjusted so as to maintain the proportionate  number
                  of Shares  without  changing the aggregate  Purchase  Price of
                  such Options;  provided,  however, that no adjustment shall be
                  made by  reason of the  distribution  of  subscription  rights
                  (rights  offering)  on Shares or  distribution  of shares of a
                  spun off subsidiary or division. Upon the occurrence of any of
                  the  foregoing,  the  class  and  aggregate  number  of Shares
                  issuable  pursuant  to the Plan (as set  forth  in  Section  5
                  hereof),  in  respect  of  which  Options  have  not yet  been
                  exercised,  shall be and other related terms and conditions of
                  the Option shall be appropriately  adjusted (all as determined
                  by the  Committee  or the Board whose  determination  shall be
                  final).

8.       TERM AND EXERCISE OF OPTIONS

         8.1      Options shall be exercised by a written notice of exercise and
                  remitting  payment  of the  Purchase  Price for the  exercised
                  Options by the  Optionee  to the Company or to any third party
                  designated by the Company (the "REPRESENTATIVE"), in such form
                  and method as may be determined by the Company, which exercise
                  shall be effective  upon receipt of such notice by the Company
                  or the Representative and the payment of the Purchase Price at
                  the  Company's  or  the   Representative's   principal  office
                  pursuant to Section 6.2.  The notice shall  specify the number
                  of Shares with respect to which the Option is being exercised.

         8.2      Options,  to  the  extent  not  previously  exercised,   shall
                  terminate  upon the  earlier of: (i) the date set forth in the
                  Option  Agreement;  (ii) the expiration of ten (10) years from
                  the Date of Grant;  or (iii)  the  expiration  of the  periods
                  specified in any of the events set forth in Section 8.5.

         8.3      The Options may be exercised by the Optionee,  in whole at any
                  time or in part  from  time to time,  to the  extent  that the
                  Options  have  become  vested  and  exercisable,  prior to the
                  Expiration Date, and provided that,  subject to the provisions
                  of Section  8.5,  the  Optionee  is an  Employee  or a Service
                  Provider at all times during the period  beginning on the Date
                  of Grant of the Option and ending upon the date of exercise of
                  the Option.

                                       8
<PAGE>

         8.4      Subject to the  provisions  of Section  8.5, in the event of a
                  termination of the  Optionee's  employment or service with the
                  Company or any of its  Subsidiaries  either by the Optionee or
                  the Company or as a result of the  disability  or death of the
                  Optionee,  as  the  case  may  be  (each,  a  "Termination  of
                  Employment"),  all  Options  granted  to such  Optionee  shall
                  immediately  expire.  The date of (i) notice of termination of
                  employment   or  service   provided  by  the  Company  or  the
                  Subsidiary or the  Optionee,  as the case may be, to the other
                  party;  or (ii) the  occurrence of the  disability or death of
                  the Optionee,  (the "Date of Termination")  shall be deemed to
                  be the  date  of  Termination  of  Employment  (the  "Date  of
                  Termination").  In  case of  Termination  of  Employment,  the
                  unvested  portion of the  Optionee's  Option shall be null and
                  void.

         8.5      Notwithstanding  anything to the contrary hereinabove,  solely
                  Vested Options may be exercised  after the Date of Termination
                  if:

                  8.5.1    the  termination  of employment or service is made by
                           the Company or a Subsidiary without Cause, the Vested
                           Options still in force and unexpired may be exercised
                           within a period of thirty (90) days after the Date of
                           Termination.; or

                  8.5.2    the  termination  of  employment  or  service  is the
                           result of death or disability  of the  Optionee,  the
                           Vested  Options  still in force and  unexpired may be
                           exercised  by the  Optionee's  legal  representative,
                           heir or legatee within a period of twelve (12) months
                           after the Date of Termination; or

                  8.5.3    prior to the Date of Termination, the Committee shall
                           authorize  an extension of the term of all or part of
                           the Vested Options beyond the Date of Termination for
                           a period  not to  exceed  the  period  for  which the
                           Options  by their  terms  would  otherwise  have been
                           exercisable.

                  For  avoidance  of any doubt,  if the Company or a  Subsidiary
                  terminates the employment or service of an Optionee for Cause,
                  any outstanding  unexercised  Options  (whether vested or not)
                  will immediately expire and terminate,  and the Optionee shall
                  not have any right in respect of such outstanding Options.

         8.6      The  Optionees  shall not have any of the rights or privileges
                  of  shareholders  of the  Company  in  respect  of any  Shares
                  issuable  upon the  exercise  of an Option,  nor shall they be
                  deemed  to be a class  of  shareholders  or  creditors  of the
                  Company for the purpose of all applicable  law,  including the
                  Companies Law, until  registration of the Optionee as a holder
                  of such Shares in the Company's  register of shareholders with
                  its  agent in the  U.S.,  American  Stock  Transfer  and Trust
                  Company,  following  the exercise of the Option in  accordance
                  with the provisions of the Plan.

         8.7      Any  form of  Option  Agreement  authorized  by the  Plan  may
                  contain such other provisions, not inconsistent with the Plan,
                  as the Committee may, from time to time, deem advisable.

                                       9
<PAGE>

9.       VESTING OF OPTIONS

         9.1      Subject to the  provisions of the Plan,  Options shall vest at
                  the Vesting Dates set forth in the Option Agreement.  However,
                  no Option shall be exercised after the Expiration Date.

         9.2      The  Committee  may vary the vesting  provisions of Options in
                  different Option Agreement and/or between Optionees.

         9.3      The  vesting of an Option  shall not accrue  during any unpaid
                  vacation of the Optionee.

10.      PURCHASE FOR INVESTMENT

         The Company's  obligation to issue or allocate the Shares upon exercise
         of an Option granted under the Plan is expressly  conditioned upon: (a)
         the Company's completion of any registration or other qualifications of
         such Shares under all  applicable  laws,  rules and  regulations or (b)
         representations   and  undertakings  by  the  Optionee  (or  his  legal
         representative,  heir or legatee, in the event of the Optionee's death)
         to assure that the sale of the Shares  complies  with any  registration
         exemption  requirements  which the Company in its sole discretion shall
         deem  necessary  or  advisable.   Such  required   representations  and
         undertakings  may  include  representations  and  agreements  that such
         Optionee  (or his  legal  representative,  heir,  or  legatee):  (a) is
         purchasing  such Shares for  investment  purposes only and not with any
         present intention of selling or otherwise  disposing  thereof;  and (b)
         agrees to have  placed  upon the face and  reverse of any  certificates
         evidencing  such Shares a legend setting forth (i) any  representations
         and  undertakings  which such  Optionee  has given to the  Company or a
         reference  thereto and (ii) that,  prior to effecting any sale or other
         disposition  of any such  Shares,  the  Optionee  must  furnish  to the
         Company an opinion of counsel,  satisfactory to the Company,  that such
         sale or disposition  will not violate the applicable  laws,  rules, and
         regulations,  whether of the State of Israel or of the United States or
         any other State having jurisdiction over the Company and the Optionee.

11.      DIVIDENDS

         With  respect to all Shares  allocated  or issued upon the  exercise of
         Options by the  Optionee,  the  Optionee  shall be  entitled to receive
         dividends  proportionate  to the amount of such Shares,  subject to the
         provisions of the Company's incorporation documents (and all amendments
         thereto)  and subject to any  applicable  taxation on  distribution  of
         dividends.

                                       10
<PAGE>

12.      RESTRICTIONS ON ASSIGNABILITY, TRANSFER AND SALE OF OPTIONS

         No Option or any right with  respect  thereto,  purchasable  hereunder,
         whether  fully paid or not,  may be assigned,  transferred  or given as
         collateral nor any right with respect thereto may be given to any third
         party  whatsoever,  other  than  by will or the  laws  of  descent  and
         distribution or as specifically  otherwise  allowed under the Plan, and
         during the  lifetime of the  Optionee  each and all of such  Optionee's
         rights to purchase Shares  hereunder  shall be exercisable  only by the
         Optionee.  Any action made in  contradiction  to the aforesaid shall be
         null and void.

13.      EFFECTIVE DATE AND TERM OF THE PLAN

         The Plan shall be  effective  as of the day it was adopted by the Board
         and  shall  terminate  at the end of ten (10)  years  from  such day of
         adoption.

         The Company shall obtain the approval of the Company's shareholders for
         the  adoption  of this  Plan  or for any  amendment  to this  Plan,  if
         shareholders'  approval is  necessary  or  desirable to comply with any
         applicable law including without limitation the U.S.  securities law or
         the securities laws of other jurisdiction applicable to Options granted
         to Optionees under this Plan, or if shareholders'  approval is required
         by any authority or by any governmental agencies or national securities
         exchanges  including without  limitation the US Securities and Exchange
         Commission.

14.      AMENDMENTS OR TERMINATION OF THE PLAN

         14.1     The  Board  may at any  time,  subject  to the  provisions  of
                  Section  14.2  below and all  applicable  law,  amend,  alter,
                  suspend or terminate the Plan, provided, however, that (i) the
                  Board may not extend the term of the Plan specified in Section
                  13.1  and  (ii)  no  amendment,   alteration,   suspension  or
                  termination  of  the  Plan  shall  impair  the  rights  of any
                  Optionee, unless mutually agreed otherwise by the Optionee and
                  the Company,  which agreement must be in writing and signed by
                  the Optionee and the Company.  Earlier termination of the Plan
                  prior to the  Termination  Date shall not  affect the  Board's
                  ability to exercise the powers  granted to it  hereunder  with
                  respect to Options granted under the Plan prior to the date of
                  such earlier termination.

         14.2     The  Company  shall  obtain  the  approval  of  the  Company's
                  shareholders  for  any  amendment  to  this  Plan  and/or  the
                  Appendixes thereto if shareholders' approval is required under
                  any applicable law.

15.      CONTINUANCE OF EMPLOYMENT

         Neither the Plan nor any Option  Agreement  shall impose any obligation
         on the Company or a Subsidiary  to continue the  employment or services
         of any  Optionee  and  nothing  in the  Plan or in any  Option  granted
         pursuant hereto shall confer upon any Optionee any right to continue in

                                       11
<PAGE>

         the employ or service of the Company or a  Subsidiary  or restrict  the
         right of the Company or a Subsidiary  to terminate  such  employment or
         service at any time.

16.      GOVERNMENT REGULATIONS; GOVERNING LAW AND JURISDICTION

         16.1     The Plan, the grant and exercise of Options  hereunder and the
                  obligation  of the  Company to sell and deliver  Shares  under
                  such Options  shall be governed by,  subject to, and construed
                  and enforced in accordance with, all applicable  laws,  rules,
                  regulations,  approvals  and  consents  of (i)  the  State  of
                  Israel;  (ii) the United  States  (iii) any other state having
                  jurisdiction over the Company or the Optionee;  (iv) any stock
                  exchange or quotation system on which the Shares are listed or
                  quoted;  and (v) any  governmental  agencies.  Nothing  herein
                  shall be deemed to require the Company to register  the Shares
                  under any applicable securities law of any jurisdiction.

         16.2     The  competent  courts of New York,  New York  shall have sole
                  jurisdiction in any matters pertaining to the Plan.

17.      TAX CONSEQUENCES

         To the extent  permitted by applicable law, any tax consequences to any
         Optionee arising from the grant or exercise of any Option,  the payment
         for Shares  covered  thereby or any other  event or act (of the Company
         and/or its  Subsidiaries,  or the  Optionee)  hereunder  shall be borne
         solely by the Optionee.  The Company  and/or its  Subsidiaries,  as the
         case may be, shall withhold taxes according to the  requirements  under
         all applicable  laws,  rules, and  regulations,  including  withholding
         taxes at source. Furthermore, the Optionee shall agree to indemnify the
         Company  and/or  its  Subsidiaries,  as the case may be,  and hold them
         harmless  against  and from  any and all  liability  for any such  tax,
         interest or penalty thereon, including without limitation,  liabilities
         relating to any  requirement  to withhold or have withheld tax from any
         payment made to the Optionee.

         The Company shall not be required to furnish any Share  certificate  to
         an Optionee  until all  required  payments  have been fully made by the
         Optionee.

18.      NON-EXCLUSIVITY OF THE PLAN

         The  adoption  of the  Plan by the  Board  shall  not be  construed  as
         amending,  modifying or rescinding  any previously  approved  incentive
         arrangements  or as creating any  limitations on the power of the Board
         to adopt such other  incentive  arrangements  as it may deem desirable,
         including,  without limitation,  the granting of Options otherwise then
         under  the  Plan,  and  such  arrangements  may  be  either  applicable
         generally  or only  in  specific  cases.  Prior  grant  of  options  to
         Optionees of the Company under their  employment  agreements not in the
         framework of any  previous  option plan shall not be deemed an approved
         incentive arrangement for the purpose of this section.

                                       12
<PAGE>

19.      MULTIPLE AGREEMENTS

         The terms of each Option may differ from other  Options  granted  under
         the Plan at the same  time,  or at any other  time.  The Board may also
         grant more than one Option to an Optionee  during the term of the Plan,
         either in addition  to, or in  substitution  for,  one or more  Options
         previously granted to such Optionee.

20.     RULES PARTICULAR TO SPECIFIC COUNTRIES

         Notwithstanding   anything  herein  to  the  contrary,  the  terms  and
         conditions  of the Plan may be adjusted  with respect to Optionees  who
         are  residents of a  particular  country by means of an addendum to the
         Plan in the form of an  appendix  (the  "APPENDIX"),  and to the extent
         that the terms and conditions  set forth in the Appendix  conflict with
         any  provisions  of the Plan,  the  provisions  of the  Appendix  shall
         govern. Terms and conditions set forth in the Appendix shall apply only
         to Options issued to Optionees  under the  jurisdiction of the specific
         country  that is subject of the Appendix and shall not apply to Options
         issued to any other Optionee.

                                       13

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