Document:

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                                  EXHIBIT 10.12

THE SECURITIES  ISSUABLE UNDER THIS DOCUMENT HAVE NOT BEEN REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR QUALIFIED UNDER
ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED,  ASSIGNED
OR HYPOTHECATED  UNLESS THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE
SECURITIES  ACT COVERING  THIS  WARRANT  AND/OR SUCH  SECURITIES,  OR THE HOLDER
DELIVERS TO THE  COMPANY AN OPINION OF COUNSEL FOR THE HOLDER OF THE  SECURITIES
AND/OR  SUCH  SECURITIES  SATISFACTORY  TO THE COMPANY  STATING  THAT SUCH SALE,
TRANSFER,  ASSIGNMENT  OR  HYPOTHECATION  IS EXEMPT  FROM THE  REGISTRATION  AND
PROSPECTUS  DELIVERY  REQUIREMENTS  OF THE SECURITIES ACT AND THE  QUALIFICATION
REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW.

                            SHARE PURCHASE AGREEMENT

This agreement (the "AGREEMENT"), is made by and between Voice Diary Inc., a
company incorporated under the laws of the state of Delaware (the "COMPANY") and
Ofer Yonach (the "INVESTOR")

     WHEAREAS: the Investor wants to purchase 673,202 (six hundred seventy three
thousand two hundred and two) Class A Common Stocks of the Company, each bearing
a par value of $ 0.01 (the "Purchased  Shares")  allocated in  consideration  of
$33,333 (the "Purchase Price"); and

     WHEAREAS:  the  Company  wishes to  allocate  the  Purchased  Shares to the
Investor at the Purchase  price in accordance  with the terms and conditions set
forth herein.

     NOW THEREFOR,  the parties,  intending to be legally bound, hereby agree as
follows:

1.   PREAMBLE AND CAPTIONS

     1.1. The  preamble  to this  Agreement  shall be  deemed an  integral  part
          thereof.

     1.2. The  captions in this  Agreement  shall not be deemed a part hereof as
          they have been inserted for convenience and orientation only, and they
          shall not affect the interpretation of this Agreement.

2.   PURCHASE AND SALE OF SHARES
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                                       2

     2.1. Subject to and in  accordance  with the terms and  conditions  of this
          Agreement,  the  Investor  hereby buys the  Purchased  Shares from the
          Company,  and the Company  hereby  sells the  Purchased  Shares to the
          Investor.

     2.2. The parties  hereby agree that the Purchase Price shall be paid by Nir
          Or Israel Ltd ("Nir Or") by offsetting the Company's debt to Nir Or. A
          written  confirmation that part of the bridge loans that were provided
          by Nir Or to the Company,  equal to $33,333,  is to be  considered  as
          payment of the  Purchase  Price for the  Investor and that the Company
          has no  obligation  to pay Nir Or said sum,  shall be  considered as a
          full payment of the Purchase Price..

3.   REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE INVESTOR

     The  Investor hereby represents and warrants to the Company as follows:

     3.1. NO BREACH.  The execution and  performance  of this  Agreement and the
          consummation  of the  transactions  contemplated  hereunder  will  not
          result in a breach of, nor will they  constitute a default under,  any
          agreement to which the Investor is party.

     3.2. APPROVALS.  No approval or consent of any person,  authority or entity
          is required in  connection  with the  execution  and  delivery of this
          Agreement   or  the   performance   of  the   Investor's   obligations
          contemplated hereby.

     3.3. AUTHORIZATION.  If the Investor is a corporation, it is duly organized
          and validly  existing in the  jurisdiction of its organization and has
          full power and authority to enter into this Agreement.  All actions on
          its part  necessary  for the  authorization,  execution,  delivery and
          performance  by it of this Agreement have been duly taken to authorize
          the execution and delivery by it, and this Agreement  constitutes  its
          valid and legally binding  obligation,  enforceable in accordance with
          its terms except (a) as limited by applicable bankruptcy,  insolvency,
          reorganization,  moratorium  or  other  laws  of  general  application
          affecting enforcement of creditors' rights, and (b) general principles
          of equity that restrict the availability of equitable remedies.

     3.4. NO PUBLIC MARKET;  RULE 144. The Investor  understands  that no public
          market  now  exists  for any of the  Purchased  Stock  and  that it is
          uncertain  whether  a  public  market  will  ever  exist  for any such
          securities.   The  Investor  further  acknowledges  that  because  the
          Purchased Stock have not been  registered  under the Securities Act of
          1933, as amended (the  "SECURITIES  ACT"), the Purchased Stock must be
          held indefinitely unless subsequently  registered under the Securities
          Act or an exemption from such  registration is available.  It is aware

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                                       2

          of the provisions of Rule 144  promulgated  under the Securities  Act,
          which  permits  limited  resale  of  shares  purchased  in  a  private
          placement under certain circumstances.

     3.5. RESTRICTED STOCK. The Purchased Stock are characterized as "restricted
          securities"  under the federal  securities  laws  inasmuch as they are
          being  acquired  from the  Company in a  transaction  not  involving a
          public   offering  or  in  reliance   upon  a  safe  harbor  from  the
          registration requirements of the act under regulation S for offers and
          sales of securities that occur outside of the united states,  and such
          securities  may be resold without  registration  under the Act only in
          certain limited  circumstances.  It understands  that the certificates
          evidencing   the   Purchased   Stock  will  be  printed  with  legends
          restricting  transfer except in compliance with applicable  securities
          laws in the form of the following or similar legend:

          "THE SHARES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT") AND MAY NOT BE
          OFFERED  OR SOLD IN THE  UNITED  STATES OR TO U.S.  PERSONS OR FOR THE
          ACCOUNT  OR BENEFIT  OF A U.S.  PERSON  (OTHER  THAN  DISTRIBUTORS  AS
          DEFINED IN REGULATION S) DURING THE DISTRIBUTION  COMPLIANCE PERIOD AS
          DEFINED IN RULE 902 OF  REGULATION S UNLESS THE SHARES ARE  REGISTERED
          UNDER THE ACT OR AN EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS  IS
          AVAILABLE.".

          Investor understands that any transfer agent of the Company will issue
          stop-transfer  instructions with respect to the Purchased Stock unless
          any  transfer  thereof is  subsequently  registered  under the Act and
          applicable state and other securities laws or unless an exemption from
          such registration is available.

     3.6. The Investor's present intention is to acquire the Purchased Stock for
          its own account and further  represents  that the Purchased  Stock are
          being and will be acquired by it for the purpose of investment and not
          with a view to distribution or resale thereof.  The acquisition by the
          Investor of the  Purchased  Stock  acquired by it shall  constitute  a
          confirmation of this representation by such Investor.

     3.7. ACCESS TO INFORMATION.  The Investor  acknowledges that it, during the
          course  of  this  transaction  and  prior  to the  acquisition  of any
          Purchased  Stock  has  had the  opportunity  to ask  questions  of and
          receive  answers from  representatives  of the

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                                       4

          Company concerning the terms and conditions of this Agreement relating
          to  the  Purchased  Stock,  and  to  obtain  additional   information,
          documents,  records and books  relative to the Company,  its business,
          and an  investment  in Company.  The  Investor  acknowledges  that the
          Company or any agent thereof has made no representations or warranties
          except as explicitly set forth in this Agreement.

     3.8. PREVIOUS  INVESTMENTS.  By  reason  of the  Investor's  knowledge  and
          experience in business and financial matters, including investments in
          securities of companies in the  development  stage, it is able to fend
          for itself,  can bear the economic risk of its investment and has such
          knowledge and  experience in financial or business  matters that it is
          capable  of  evaluating  the  merits  and  risks  of the  transactions
          contemplated herein.

     3.9. RISKS.  The Investor  understands  that an  investment  in the Company
          involves a high degree of risk and is suitable  only for  shareholders
          who can afford a loss of their entire  investment and who have no need
          for liquidity from their investment.

     3.10.The Investor is either (i) an "accredited  investor",  as that term is
          defined in Rule 501 of Regulation D promulgated  under the  Securities
          Act, or (ii) not a "U.S. Person", as defined by Rule 902 of Regulation
          S  promulgated  under the  Securities  Act,  was not formed by a "U.S.
          Person"  as  defined by Rule 902 of  Regulation  S, was not  organized
          under the laws of any United States  jurisdiction,  is not holding the
          Purchased  Stock for the benefit of any US Person,  and was not formed
          for the purpose of investing in securities  not  registered  under the
          Securities  Act.  At the time the buy order for this  transaction  was
          originated, the Investor was outside the United States.

          All  subsequent  offers and sales of the Purchased  Stock will be made
          (i) outside the United States in compliance  with Rule 903 or Rule 904
          of Regulation S, (ii) pursuant to  registration of the Purchased Stock
          under the Securities  Act, or (iii) pursuant to an exemption from such
          registration. The Investor understands the conditions of the exemption
          from  registration  afforded by Section 4(1) of the Securities Act and
          acknowledges  that there can be no  assurance  that it will be able to
          rely on such  exemption.  The  Investor  will not  engage  in  hedging
          transactions   with  regard  to  the  Purchased  Stock  prior  to  the
          expiration of the distribution compliance period specified in Rule 903
          of Regulation S, unless in compliance with the Securities Act.

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                                       5

     3.11.The  Investor,  if not a  natural  person,  was  not  formed  for  the
          specific   purpose  of  acquiring  the  securities   offered  in  this
          Agreement.

4.   REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY

     The Company hereby represents and warrants to the Investor as follows:

     4.1. AUTHORIZATION  BY  COMPANY.  By  signing,  all  actions on the part of
          Company  necessary for the  authorization,  execution,  delivery,  and
          performance  by it of this  Agreement  have been duly taken,  and this
          Agreement   constitutes  a  legal,   valid  and  binding   obligation,
          enforceable against the Company in accordance with its terms.

     4.2. NO BREACH.  The execution and  performance  of this  Agreement and the
          consummation  of the  transactions  contemplated  hereunder  will  not
          result in a breach of, nor will they  constitute,  a default under any
          agreement to which the Company is party.

     4.3. NO  ADDITIONAL  REPRESENTATIONS.  The  Company  is  familiar  with the
          Company, its property, its obligations and its activities. Company is,
          thus,  purchasing the Purchased  Shares "AS IS", without having relied
          upon any  representations  and/or  warranties by the Investor,  except
          those representations and warrants specifically indicated herein.

     4.4. APPROVALS.  No  approval  or consent of any third party is required in
          connection  with the execution  and delivery of this  Agreement on the
          consummation of the transaction contemplated hereby.

5.   STAND-OFF AGREEMENT

     In  connection  with  any  offering  of the  Company's  equity  securities,
     pursuant  to an  effective  registration  statement,  for such  period (the
     "Lock-Up Period") as the Company may request (such period not to exceed 180
     days  following the date of the  applicable  offering),  the Investor shall
     not,   directly  or  indirectly,   sell  make  any  short  sale  of,  loan,
     hypothecate, pledge, offer, grant or sell any portion or other contract for
     the purchase of,  purchase any option or other contract for the sale of, or
     otherwise  dispose  of or  transfer,  or  agree  to  engage  in  any of the
     foregoing  transactions  with  respect  to, any  Purchased  Stock  acquired
     hereunder  without the prior written  consent of the Company.  The Investor
     agrees to (i) have any certificate or certificates representing his, her or
     its Purchased  Stock bear, in addition to any other  applicable  securities
     legends,  a legend stating that the shares  represented by that certificate
     may not be  transferred by any means  whatsoever,  without the agreement of
     the  Company,  during the  Lock-Up  Period;  and (ii)  execute  any and all
     agreements with underwriters

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                                       6

     representing  the Company to effect and perfect the foregoing.  The Company
     may impose stop transfer instructions with respect to the shares subject to
     the foregoing restrictions, until the end of the Lock-Up Period.

6.   WAIVER AND CONSENTS

     The  Investor  hereby  waives  any  right,  title,  interest  in and to any
     additional  shares or other securities of the Company,  whether pursuant to
     an option agreement,  warrant  agreement,  antidilution  right,  preemptive
     right or the like,  and hereby  waive any other right to receive  shares or
     other  securities  of the Company or the Company (to the extent such rights
     exist),  and  agrees  that the  Purchased  Shares  are the sum total of the
     shares  or other  securities  of the  Company  to  which  the  Investor  is
     entitled.  The Investor hereby waives any and all  registration  rights the
     Investor may have had in the Company, and acknowledges that the Investor is
     not  receiving  herein  any  registration  rights  in and to the  Company's
     equities.  The  Investor  hereby  agrees and  consents  to the  resolutions
     adopting the Voice Diary Inc. 2003 Stock Option Plan. The execution of this
     Agreement also serves as execution of the resolutions.

7.   TAXATION

     Each Party shall bear the payment of any tax or levy,  should such  payment
     apply to the Party,  pursuant to the provision of any law, in its status of
     transferor or transferee,  depending on the case.  Without  derogating from
     the foregoing,  Investor,  alone,  will be  responsible  for payment of any
     capital gains tax, if any,  which may apply as a result of (i) the transfer
     and sale of the Purchased Shares,  and (ii) the issuance of Purchased Stock
     by the Company, as contemplated herein.

8.   MISCELLANEOUS

     8.1. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
          the  provisions  hereof  shall inure to the benefit of, and be binding
          upon, the successors,  assigns, heirs, executors and administrators of
          the parties hereto.

     8.2. ENTIRE AGREEMENT.  This Agreement and the exhibits attached hereto and
          the other documents  delivered pursuant hereto constitute the full and
          entire  understanding and agreement between and among the parties with
          regard to the subjects hereof and thereof.

     8.3. AMENDMENTS.  Any and all  changes,  amendments  or  additions  to this
          Agreement shall require the prior written  consent of all Parties,  or
          else they shall be deemed null and void.

     8.4. NOTICES. Any notice,  payment,  report or other communication required
          or  permitted  to be given by one  party  to any  other  party by this
          Agreement  shall

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                                       7

          be in  writing  and  addressed  to the other  party at its  address as
          indicated  below, or to such other address as any addressee shall have
          theretofore  furnished to the other party by like notice.  All notices
          shall be deemed to have been given or  delivered  upon:  (i)  personal
          delivery;  or (ii) three (3) days after  deposit in the United  States
          mail by certified mail (return  receipt  requested);  or (iii) one (1)
          business day after  deposit with any return  receipt  express  courier
          (prepaid);  or  (iv)  one  (1)  business  day  after  transmission  by
          facsimile.

     8.5. COUNTERPARTS.  This  Agreement  may  be  executed  in  any  number  of
          counterparts,  each of which  shall be an  original,  but all of which
          together shall constitute one instrument.

     8.6. APPLICABLE  LAW. This Agreement shall be governed by, and construed in
          accordance  with,  the laws of the  State of New  York  applicable  to
          contracts  between New York residents entered into and to be performed
          entirely within the State of New York. The parties irrevocably consent
          to the exclusive  jurisdiction  of any competent  court located within
          the city of New York,  State of New York,  with respect to any and all
          disputed arising from this Agreement.

     8.7. The parties hereto agree to maintain the  confidentiality of the terms
          hereof.

IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of
the date first written above.

Investor's Name: Ofer Yonach                    Company: Voice Diary Inc.

Signature:                                      Signature:
           ----------------------------                   -------------------
Address:      13 Kiriati St., Ramat Gan         By: Arie Hinkis, CEO

              52223, Israel                     Address: 200 Robbins Lane

Date: May 9, 2003                               Jericho NY 11753

Date: May 9, 2003

<PAGE><PAGE>

                                   EXHIBIT 10.13
                                   --------------

                                VOICE DIARY INC.
                                -----------------
                             2003 STOCK OPTION PLAN
                             ----------------------

1.     PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are to
       attract and retain the best available personnel for positions of
       substantial responsibility, to provide additional incentive to Employees,
       Directors and Consultants and to promote the success of the Company's
       business. Options granted under the Plan may be Incentive Stock Options,
       Nonstatutory Stock Options, 102 Options, or 3(i) Options, as determined
       by the Administrator at the time of grant. Stock Purchase Rights may also
       be granted under the Plan.

2.     DEFINITIONS. As used herein, the following definitions shall apply:

      2.1.  "Administrator" means the Board or any of its Committees as shall be
            administering the Plan in accordance with Section y4 hereof.

      2.2.  "Applicable   Laws"   means  the   requirements   relating   to  the
            administration  of stock option plans under  Israeli and U.S.  state
            corporate laws,  Israeli and U.S. federal and state securities laws,
            the Code, the Ordinance,  any stock exchange or quotation  system on
            which the Common Stock is listed or quoted and the  applicable  laws
            of any other country or jurisdiction where Options or Stock Purchase
            Rights are granted under the Plan.

      2.3.  "Board" means the Board of Directors of the Company.

      2.4.  "Code" means the Internal Revenue Code of 1986, as amended.

      2.5.  "Committee" means a committee of Directors appointed by the Board in
            accordance with Section y4 hereof.

      2.6.  "Common Stock" means the Class A Common Stock of the Company.

      2.7.  "Company" means Voice Diary Inc., a Delaware corporation.

      2.8.  "Consultant"  means any person who is engaged by the  Company or any
            Parent or  Subsidiary to render  consulting or advisory  services to
            such entity, including any employees of such person.

      2.9.  "Director"  means a member of the Board of Directors of the Company,
            or any Parent or Subsidiary.
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                                       2

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

      2.11. "Employee"  means any  person,  including  Officers  and  Directors,
            employed by the Company or any Parent or  Subsidiary of the Company.
            Without  derogating  from Section y9.4 below,  an Optionee shall not
            cease  to be an  Employee  in the case of (i) any  leave of  absence
            approved by the Company (or by the Parent or Subsidiary that employs
            the person) or (ii) transfers  between  locations of the Company (or
            the Parent or  Subsidiary  that  employs  the person) or between the
            Company, its Parent, any Subsidiary,  or any successor. For purposes
            of Incentive  Stock  Options,  no such leave may exceed ninety days,
            unless  reemployment  upon expiration of such leave is guaranteed by
            statute or contract.  If reemployment  upon expiration of a leave of
            absence  approved by the Company is not so guaranteed,  on the 181st
            day of such leave any  Incentive  Stock  Option held by the Optionee
            shall cease to be treated as an Incentive  Stock Option and shall be
            treated for tax purposes as a  Nonstatutory  Stock  Option.  Neither
            service  as a Director  nor  payment  of a  director's  fee shall be
            sufficient to constitute "employment".

      2.12. "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
            amended.

      2.13. "Fair Market Value" means, as of any date, the value of Common Stock
            determined as follows:

          2.13.1. If  the  Common  Stock  is  listed  on any  established  stock
                  exchange  or  a  national  market  system,  including  without
                  limitation the Nasdaq  National  Market,  the Nasdaq  SmallCap
                  Market  of The  Nasdaq  Stock  Market,  or  Over  the  Counter
                  Bulletin  Board its Fair  Market  Value  shall be the  closing
                  sales  price for such stock (or the  closing  bid, if no sales
                  were  reported)  as quoted on such  exchange or system for the
                  last market trading day prior to the time of determination, as
                  reported  in The Wall Street  Journal or such other  source as
                  the  Administrator  deems reliable (and if the Common Stock is
                  listed or quoted on more than one  established  stock exchange
                  or national market system,  the Administrator  shall determine
                  the appropriate exchange or system.);

          2.13.2. If the  Common  Stock is   regularly   quoted by a  recognized
                  securities  dealer but selling  prices are not  reported,  its
                  Fair Market  Value shall be the mean  between the high bid and
                  low  asked  prices  for the  Common  Stock on the last  market
                  trading day prior to the day of determination; or
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                                       3

          2.13.3. In the absence of an established  market for the Common Stock,
                  the Fair Market  Value  thereof  shall be  determined  in good
                  faith by the Administrator.

      2.14. "Incentive  Stock Option" means an Option  intended to qualify as an
            incentive  stock  option  within the  meaning of Section  422 of the
            Code.

      2.15. "Nonstatutory  Stock Option" means an Option not intended to qualify
            as an Incentive Stock Option.

      2.16. "Officer" means a person who is an officer of the Company within the
            meaning  of  Section  16 of the  Exchange  Act  and  the  rules  and
            regulations promulgated thereunder.

      2.17. "Option" means a stock option granted pursuant to the Plan.

      2.18. "Option  Agreement" means a written or electronic  agreement between
            the Company and an Optionee  evidencing  the terms and conditions of
            an individual  Option grant.  The Option Agreement is subject to the
            terms and conditions of the Plan.

      2.19. "Option  Exchange  Program"  means  a  program  whereby  outstanding
            Options are exchanged for Options with a lower exercise price.

      2.20. "Optioned  Stock" means the Common  Stock  subject to an Option or a
            Stock Purchase Right.

      2.21. "Optionee"  means  the  holder of an  outstanding  Option or a Stock
            Purchase Right granted under the Plan.

      2.22. "Ordinance"  means the Israeli  Income Tax Ordinance  (New Version),
            1961, as amended,  the rules promulgated  thereunder,  or any law or
            regulations that shall replace the Ordinance or Sections 3(i) or 102
            promulgated thereunder.

      2.23. "Parent"  means a "parent  corporation,"  whether  now or  hereafter
            existing, as defined in Section 424(e) of the Code.

      2.24. "Plan" means this 2002 Stock Option Plan.

      2.25. "Restricted Stock" means shares of Common Stock acquired pursuant to
            a grant of a Stock Purchase Right under Section y11 below.

      2.26. "Section 16(b) " means Section 16(b) of the Securities  Exchange Act
            of 1934, as amended.

      2.27. "Service Provider" means a Director or a Consultant.

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                                       4

      2.28. "Share" means a share of the Common Stock, as adjusted in accordance
            with Section y12 below.

      2.29. "Stock  Purchase  Right"  means a right  to  purchase  Common  Stock
            pursuant to Section y11 below.

      2.30. "Subsidiary"  means  a  "subsidiary  corporation,"  whether  now  or
            hereafter existing, as defined in Section 424(f) of the Code.

      2.31. "Trustee" shall have the meaning set forth in Section y17.3 below.

      2.32. "102  Option" or "102  Stock  Purchase  Right"  means an Option or a
            Stock Purchase Rights (as applicable)  granted under the Section 102
            of the Ordinance, as amended, or any law or regulations, which shall
            replace the Section 102.

      2.33. "3(i)  Option" or "3(i) Stock  Purchase  Right" means an Option or a
            Stock Purchase Rights (as applicable) granted under the Section 3(i)
            of the Ordinance, as amended, or any law or regulations, which shall
            replace the Section 3(i).

3.    STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section y12 of the
      Plan, the maximum aggregate number of Shares that may be subject to option
      and sold under the Plan,  including  3(i) Options and 102 Options  granted
      pursuant to Section y17 below, is 1,000,000  Common Stock.  The Shares may
      be authorized but unissued, or reacquired Common Stock.

      If an Option or a Stock  Purchase  Right expires or becomes  unexercisable
      without having been  exercised in full, or is  surrendered  pursuant to an
      Option Exchange Program, the unpurchased Shares which were subject thereto
      shall become available for future grant or sale under the Plan (unless the
      Plan has terminated). However, Shares that have actually been issued under
      the Plan, upon exercise of an Option or Stock Purchase Right, shall not be
      returned  to  the  Plan  and  shall  not  become   available   for  future
      distribution under the Plan, except that if Shares of Restricted Stock are
      repurchased by the Company at their original  purchase price,  such Shares
      shall become available for future grant under the Plan.

4.    ADMINISTRATION OF THE PLAN.

      4.1.  ADMINISTRATOR.  The Plan  shall be  administered  by the  Board or a
            Committee   appointed  by  the  Board,   which  Committee  shall  be
            constituted to comply with Applicable Laws.

      4.2.  POWERS OF THE  ADMINISTRATOR.  Subject to the provisions of the Plan
            and, in the case of a Committee,  the specific  duties  delegated by
            the Board to such
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                                       5

            Committee,  and subject to the approval of any relevant authorities,
            the Administrator shall have the authority in its sole discretion:

      4.2.1.     to  determine  and/or  amend the exercise  price of the Options
                 and the purchase price Stock Purchase Rights;

      4.2.2.     to determine and/or amend the terms of payment for the Shares;

      4.2.3.     to select the Employees and Service  Providers to whom Options
                 and Stock  Purchase  Rights  may from time to time be  granted
                 hereunder;

      4.2.4.     to determine the number of Shares to be covered by each such
                 award granted hereunder;

      4.2.5.     to approve forms of agreement for use under the Plan;

      4.2.6.     to determine the terms and conditions,  of any Option or Stock
                 Purchase  Right granted  hereunder.  Such terms and conditions
                 include,  but are not limited to, the exercise price, the time
                 or  times  when  Options  or  Stock  Purchase  Rights  may  be
                 exercised  (which may be based on performance  criteria),  any
                 vesting acceleration or waiver of forfeiture restrictions, and
                 any  restriction  or limitation  regarding any Option or Stock
                 Purchase Right or the Common Stock relating thereto,  based in
                 each case on such  factors as the  Administrator,  in its sole
                 discretion, shall determine;

      4.2.7.     to determine whether and  under  what  circumstances an Option
                 may be settled in cash instead of Common Stock;

      4.2.8.     to prescribe, amend and rescind rules and regulations relating
                 to the Plan,  including  rules  and  regulations  relating  to
                 sub-plans  established  for  the  purpose  of  qualifying  for
                 preferred tax treatment under foreign tax laws;

      4.2.9.     to allow  Optionees to satisfy  withholding tax obligations by
                 electing  to have the Company  withhold  from the Shares to be
                 issued upon exercise of an Option or Stock Purchase Right that
                 number  of  Shares  having a Fair  Market  Value  equal to the
                 amount  required to be withheld.  The Fair Market Value of the
                 Shares to be withheld shall be determined on the date that the
                 amount  of  tax  to  be  withheld  is to  be  determined.  All
                 elections  by  Optionees  to have  Shares  withheld  for  this
                 purpose  shall be made in such form and under such  conditions
                 as the Administrator may deem necessary or advisable; and
<PAGE>
                                       6

      4.2.10.    to  construe  and  interpret  the terms of the Plan and awards
                 granted pursuant to the Plan.

      4.2.11.    to alter, revise or otherwise adjust the terms of the Plan and
                 the  Option  Agreement,  as may be  required  pursuant  to any
                 applicable laws of local or foreign jurisdictions.

      4.2.12.    In the event of a tie vote with respect to any matter  brought
                 before the  Administrator,  such matter  shall be presented to
                 the Board and the  decision  of the Board  shall be final with
                 respect to such matter.

      4.2.13.    Neither  the  Trustee  nor  any  member  of the  Board  or the
                 Committee  shall be liable to the Company or to any  Optionee,
                 for any action or determination taken or made in good faith as
                 a Committee member in the course of  administrating  the Plan.
                 Each member of the Board or the Committee shall be indemnified
                 and held  harmless by the Company or by any  Optionee  against
                 any  cost  or  expense  (including  counsel  fees)  reasonably
                 incurred by him, 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,  all to the extent  permitted by  applicable  law. Such
                 indemnification   shall  be  in  addition  to  any  rights  of
                 indemnification the member may have as a director or otherwise
                 under the Company's charter documents, any agreement, any vote
                 of shareholders or disinterested  directors,  insurance policy
                 or otherwise.

4.3.  EFFECT OF  ADMINISTRATOR'S  DECISION.  All decisions,  determinations  and
      interpretations  of the  Administrator  shall be final and  binding on all
      Optionees.

5.    ELIGIBILITY.

      5.1.  Nonstatutory  Stock Options and Stock Purchase Rights may be granted
            to Employees and Service  Providers.  Incentive Stock Options may be
            granted only to Employees.

      5.2.  Each Option shall be designated in the Option Agreement as either an
            Incentive  Stock Option or a  Nonstatutory  Stock  Option.  However,
            notwithstanding  such designation,  to the extent that the aggregate
            Fair  Market  Value of the Shares  with  respect to which  Incentive
            Stock  Options are  exercisable  for the first time by the  Optionee
            during any  calendar  year  (under all plans of the  Company and any
            Parent  or  Subsidiary)  exceeds  $100,000,

<PAGE>
                                       7

            such Options shall be treated as  Nonstatutory  Stock  Options.  For
            purposes of this Section  y5.2,  Incentive  Stock  Options  shall be
            taken into account in the order in which they were granted. The Fair
            Market  Value of the Shares shall be  determined  as of the time the
            Option with respect to such Shares is granted.

      5.3.  Neither the Plan nor any Option or Stock Purchase Right shall confer
            upon  any  Optionee  any  right  with  respect  to  continuing   the
            Optionee's relationship as an Employee or as a Service Provider with
            the Company, nor shall it interfere in any way with his or her right
            or the Company's  right to terminate such  relationship at any time,
            with or  without  Cause (as such term is  defined  in  Section  y9.4
            below).

6.    TERM OF PLAN.  The Plan shall  become  effective  upon its adoption by the
      Board.  It shall  continue  in effect for a term of ten (10) years  unless
      sooner terminated under Section y14 of the Plan.

7.    TERM OF  OPTION.  The term of each  Option  shall be stated in the  Option
      Agreement; provided, however, that the term shall be no more than ten (10)
      years from the date of grant thereof. Unless the Administrator  determines
      otherwise at any time, in the case of an Incentive Stock Option granted to
      an  Optionee  who,  at  the  time  the  Option  is  granted,   owns  stock
      representing  more  than  ten  percent  (10%) of the  voting  power of all
      classes of stock of the Company or any Parent or  Subsidiary,  the term of
      the Option  shall be five (5) years from the date of grant or such shorter
      term as may be provided in the Option Agreement.

8.    OPTION EXERCISE PRICE AND CONSIDERATION.

      8.1.  The per  share  exercise  price for the  Shares  to be  issued  upon
            exercise of an Option  shall be such price as is  determined  by the
            Administrator, subject to any Applicable Laws.

      8.2.  The  consideration  to be paid  for the  Shares  to be  issued  upon
            exercise of an Option,  including  the method of  payment,  shall be
            determined  by the  Administrator  (and, in the case of an Incentive
            Stock  Option,  shall  be  determined  at the  time of  grant).  The
            Administrator  may  determine,  in its sole  discretion,  that  such
            consideration  may consist of (1) cash,  (2) check,  (3)  promissory
            note, (4) other Shares which (x) in the case of Shares acquired upon
            exercise of an Option, have been owned by the Optionee for more than
            six  months  on the date of  surrender,  and (y) have a Fair  Market
            Value on the date of surrender equal to the aggregate exercise price
            of the  Shares  as to which  such  Option  shall be  exercised,  (5)
            consideration  received  by the  Company  under a cashless  exercise
            program  implemented by the Company in

<PAGE>
                                       8

            connection  with the Plan, or (6) any  combination  of the foregoing
            methods of payment.  In making its  determination  as to the type of
            consideration  to  accept,  the  Administrator   shall  consider  if
            acceptance  of such  consideration  may be  reasonably  expected  to
            benefit the Company.

9.    EXERCISE OF OPTION.

      9.1.  PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.  Any Option granted
            hereunder shall be exercisable according to the terms hereof at such
            times and under such  conditions as determined by the  Administrator
            and set forth in the Option Agreement.  In the event of any conflict
            between  the terms and  conditions  of an Option  Agreement  and the
            terms   hereof,   the  terms  hereof  shall   control.   Unless  the
            Administrator   provides  otherwise,   vesting  of  Options  granted
            hereunder  shall be tolled  during any unpaid  leave of absence.  An
            Option may not be exercised for a fraction of a Share.

            An Option shall be deemed exercised when the Company  receives:  (i)
            written notice of exercise (in accordance with the Option Agreement)
            from the person  entitled  to  exercise  the  Option,  and (ii) full
            payment  for  the  Shares  with  respect  to  which  the  Option  is
            exercised.  Full payment may consist of any consideration and method
            of payment  authorized  by the  Administrator  and  permitted by the
            Option  Agreement  and the Plan.  Shares  issued upon exercise of an
            Option (excluding Shares underlying a 102 Option, which Shares shall
            be issued in the name of the Trustee) shall be issued in the name of
            the Optionee or, if  requested by the  Optionee,  in the name of the
            Optionee  and his or her  spouse.  Until the  Shares  are issued (as
            evidenced by the appropriate entry on the books of the Company or of
            a duly authorized  transfer agent of the Company),  no right to vote
            or receive  dividends  or any other  rights as a  stockholder  shall
            exist with  respect to the Shares,  notwithstanding  the exercise of
            the  Option.  The Company  shall issue (or cause to be issued)  such
            Shares promptly after the Option is exercised. No adjustment will be
            made for a  dividend  or other  right for which the  record  date is
            prior to the date the  Shares  are  issued,  except as  provided  in
            Section y12 of the Plan.

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

      9.2.  DIVIDENDS.  All Shares  issued upon the exercise of Options  granted
            under the Plan  shall  entitle  the  Optionee  thereof,  subject  to
            Section  y17.6 below,  to receive  dividends  with respect  thereto,
            provided, however, that Optionee shall have no right to dividends or
            distribution  or other  right  with  respect to Shares

<PAGE>
                                       9

            for which the record date is prior to the date on which the Optionee
            shall have become the holder of record.

      9.3.  VOTING RIGHTS.  Each Optionee shall  irrevocably  appoint the person
            who holds the office of the Company's  Chairman of the Board, at any
            given time, as his or her attorney, agent and proxy, with full power
            of substitution,  and such person may in their name, place and stead
            vote all of the Shares held by them at any action by written consent
            or meeting of the  Shareholders  of the Company  held after the date
            hereof,  whether  annual or special,  and  whether or not  adjourned
            meeting or otherwise. The proxy holder shall vote such shares on any
            issue  brought  before the  shareholders  of the Company in the same
            proportion   as  the  other   shareholders   of  the  Company.   The
            aforementioned  proxies  shall expire upon the  consummation  of the
            initial offering of the Company's shares to the public on a domestic
            or foreign stock exchange.

      9.4.  TERMINATION OF RELATIONSHIP AS AN EMPLOYEE OR AS A SERVICE PROVIDER.
            If an Optionee ceases to be an Employee or a Service Provider,  such
            Optionee may  exercise his or her Option  within such period of time
            as is specified in the Option  Agreement to the extent,  and only to
            the  extent,  that the  Option is vested on the date of  termination
            (but in no event later than the expiration of the term of the Option
            as set forth in the Option Agreement). In the absence of a specified
            time in the Option Agreement and unless the Administrator determines
            otherwise,  the Option shall remain exercisable for three (3) months
            following   the   Optionee's   termination.   If,  on  the  date  of
            termination,  the  Optionee  is not  vested as to his or her  entire
            Option,  the Shares  covered by the  unvested  portion of the Option
            shall revert to the Plan. If, after  termination,  the Optionee does
            not  exercise  his or her Option  (to the extent  that the Option is
            vested on the date of termination)  within the time specified by the
            Administrator, the Option shall terminate, and the Shares covered by
            such Option shall revert to the Plan.

            Anything in this Plan to the contrary  notwithstanding,  but subject
            to the  provisions of section 102 of the  Ordinance,  if an Optionee
            ceases to be an Employee or a Service Provider of the Company or any
            Subsidiary thereof, but continues to provide services to the Company
            or any  Subsidiary  thereof,  such  Optionee  will be deemed to have
            continuously  remained a Service Provider of the Company during such
            term, and his Options shall vest pursuant to their original terms.

            Notwithstanding  the above, if an Optionee should be discharged from
            the employ of the Company for Cause, the entire  unexercised  Option
            (whether

<PAGE>
                                       10

            vested or not) shall ipso facto  terminate and the Shares covered by
            such Option shall revert to the Plan.

            For the purposes hereof, Cause shall mean any of the following:  (i)
            the Optionee's  theft,  dishonesty,  or falsification of any Company
            documents or records; (ii) the Optionee's improper use or disclosure
            of the Company's confidential or proprietary information;  (iii) any
            action  by  the  Optionee  which  has a  detrimental  effect  on the
            Company's  reputation or business;  (iv) the  Optionee's  failure or
            inability to perform any  reasonable  assigned  duties after written
            notice from the Company of, and a  reasonable  opportunity  to cure,
            such failure or inability;  (v) any material  breach of the Optionee
            of any  employment  agreement  between  the Option and the  Company,
            which  breach is not cured  within 30 days  pursuant to the terms of
            such  agreement;  or (vi) the Optionee's  conviction  (including any
            plea of guilty) of any  criminal  act which  impairs the  Optionee's
            ability to perform his or her duties with the Company.  For purposes
            of the definition of Cause,  with respect to an Optionee employed by
            or  providing  services to a Parent or  Subsidiary  of the  Company,
            "Company"  shall  include  the  Parent or  Subsidiary  employing  or
            engaging the services of the Optionee.

            In the event of  resignation  or  discharge  of a Optionee  from the
            employ of the Company or a Subsidiary thereof, his employment shall,
            for the purposes of this  paragraph  y9.4,  be deemed to have ceased
            upon the delivery to the employer of notice of resignation,  or upon
            the delivery to the employee of notice of discharge, as the case may
            be,  irrespective  of the  effective  date  of such  resignation  or
            discharge.  The  Administrator's  determination  as  to  whether  an
            authorized  leave of absence  on  military,  governmental  or public
            service or otherwise,  or  termination  of employment  under certain
            conditions,  shall  constitute  termination  of  employment  for the
            purposes hereof, shall be conclusive.

      9.5.  RETIREMENT.  If an Employee  Optionee should retire, he may, subject
            to the approval of the Administrator, continue to enjoy such rights,
            if any, under the Plan and on such terms and  conditions,  with such
            limitations and subject to such requirements as the committee in its
            sole  discretion may determine at the time of such  retirement or at
            any time theretofore.

      9.6.  DISABILITY OF OPTIONEE. If an Optionee ceases to be an Employee or a
            Service  Provider  as a result  of the  Optionee's  Disability,  the
            Optionee may  exercise his or her Option  within such period of time
            as is specified in the Option  Agreement to the extent the Option is
            vested on the date of  termination  (but in

<PAGE>

                                       11

            no event later than the expiration of the term of such Option as set
            forth in the Option  Agreement).  In the absence of a specified time
            in the Option  Agreement,  the Option, to the extent it is vested on
            the date of  termination,  shall remain  exercisable for twelve (12)
            months  following the Optionee's  termination (but in no event later
            than the  expiration  of the term of such Option as set forth in the
            Option Agreement).  If, on the date of termination,  the Optionee is
            not vested as to his or her entire Option, the Shares covered by the
            unvested  portion of the Option shall revert to the Plan.  If, after
            termination, the Optionee does not exercise his or her Option within
            the time  specified  herein,  the Option  shall  terminate,  and the
            Shares covered by such Option shall revert to the Plan.

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

      9.8.  BUYOUT PROVISIONS.  Without derogating from Section y12.4 below, the
            Administrator may at any time offer to buy out for a payment in cash
            or Shares,  an Option  previously  granted,  based on such terms and
            conditions as the  Administrator  shall establish and communicate to
            the  Optionee  at the time that such  offer is made.  No such  offer
            shall obligate Optionee to relinquish his or her Option.

10.   NON-TRANSFERABILITY  OF OPTIONS  AND STOCK  PURCHASE  RIGHTS.  Options and
      Stock  Purchase  may  not  be  sold,  pledged,   assigned,   hypothecated,
      transferred,  or  disposed  of in any manner  other than by will or by the
      laws of descent or distribution and may be exercised,  during the lifetime
      of the Optionee, only by the Optionee.

<PAGE>
                                       12

      Apart from the inherent power of the shareholders of the Company to alter
      or modify the rights of the Company's shares, the Administrator may impose
      on any Optionee such additional restrictions on the transfer of Shares as
      the Administrator may determine at the time that Options are granted to
      the Optionee or as may be agreed to by the Administrator and the Optionee
      following purchase of said Shares upon exercise of such Options under this
      Plan or upon termination of the Optionee's employment with the Company.
      Such additional rights and restrictions shall be included in the Option
      Agreement entered into between the Company and the Optionee, or, upon
      agreement of the Optionees, or in this Plan.

11.   STOCK PURCHASE RIGHTS.

      11.1. RIGHTS TO  PURCHASE.  Stock  Purchase  Rights  may be issued  either
            alone,  in addition to, or in tandem with other awards granted under
            the Plan  and/or cash  awards  made  outside of the Plan.  After the
            Administrator  determines  that it will offer Stock Purchase  Rights
            under  the  Plan,   it  shall  advise  the  offeree  in  writing  or
            electronically of the terms,  conditions and restrictions related to
            the offer,  including the number of Shares that such person shall be
            entitled  to  purchase,  the price to be paid,  and the time  within
            which such person  must  accept  such offer.  The terms of the offer
            shall comply in all respects  with all  Applicable  Laws.  The offer
            shall be  accepted  by  execution  of a  Restricted  Stock  purchase
            agreement in the form determined by the Administrator.

      11.2. REPURCHASE OPTION.  Unless the Administrator  determines  otherwise,
            the Restricted  Stock purchase  agreement  shall grant the Company a
            repurchase  option  exercisable  upon the  voluntary or  involuntary
            termination  of the  purchaser's  service  with the  Company for any
            reason  (including  death or  disability).  The  purchase  price for
            Shares  repurchased   pursuant  to  the  Restricted  Stock  purchase
            agreement  shall be the original price paid by the purchaser and may
            be paid by cancellation of any  indebtedness of the purchaser to the
            Company.  The  repurchase  option  shall  lapse at such  rate as the
            Administrator may determine. Except with respect to Shares purchased
            by Officers,  Directors and  Consultants,  to the extent required by
            Applicable  Laws, the repurchase  option shall in no case lapse at a
            rate of less  than 20% per year  over  five  years  from the date of
            purchase.

      11.3. OTHER  PROVISIONS.  The Restricted  Stock purchase  agreement  shall
            contain such other terms, provisions and conditions not inconsistent
            with the Plan as may be determined by the  Administrator in its sole
            discretion.

      11.4. RIGHTS AS A STOCKHOLDER. Once the Stock Purchase Right is exercised,
            the purchaser shall have rights equivalent to those of a stockholder
            and shall be a

<PAGE>
                                       13

            stockholder  when his or her purchase is entered upon the records of
            the duly  authorized  transfer  agent of the Company.  No adjustment
            shall be made for a  dividend  or other  right for which the  record
            date is prior to the date the  Stock  Purchase  Right is  exercised,
            except as provided in Section y12 of the Plan.

12.   Adjustments Upon Changes in Capitalization, Merger or Asset Sale.

      12.1. CHANGES IN  CAPITALIZATION.  Subject to any  required  action by the
            stockholders  of the  Company,  the number of shares of Common Stock
            covered by each outstanding  Option or Stock Purchase Right, and the
            number of shares of Common  Stock  which  have been  authorized  for
            issuance under the Plan but as to which no Options or Stock Purchase
            Rights have yet been granted or which have been returned to the Plan
            upon  cancellation  or  expiration  of an Option  or Stock  Purchase
            Right,  as well as the price per share of Common  Stock  covered  by
            each such  outstanding  Option  or Stock  Purchase  Right,  shall be
            proportionately  adjusted for any increase or decrease in the number
            of issued  shares  of Common  Stock  resulting  from a stock  split,
            reverse stock split, stock dividend, combination or reclassification
            of the Common Stock, or any other increase or decrease in the number
            of  issued  shares of  Common  Stock  effected  without  receipt  of
            consideration  by the Company.  The  conversion  of any  convertible
            securities of the Company shall not be deemed to have been "effected
            without receipt of consideration."  Such adjustment shall be made by
            the  Board,  whose  determination  in that  respect  shall be final,
            binding and  conclusive.  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 of Common Stock subject to
            an Option or Stock Purchase Right.

      12.2. DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution
            or liquidation of the Company,  to the extent that an Option has not
            been previously  exercised,  the  unexercised  Option will terminate
            immediately  prior to the consummation of such proposed action.  The
            Committee  may,  in the  exercise  of its  sole  discretion  in such
            instances,  declare  that any Option  shall  terminate  as of a date
            fixed by the  Committee and give each Optionee the right to exercise
            his Option as to all or any part of the Shares,  including Shares as
            to which the Option would not otherwise be exercisable.

      12.3. MERGER,  ACQUISITION, OR ASSET SALE. In the event of a merger of the
            Company with or into another  corporation,  an acquisition of all or
            substantially  all of the  shares  of  the

<PAGE>
                                       14

            Company,  or the  sale of  substantially  all of the  assets  of the
            Company (each such event, a "Transaction"),  each outstanding Option
            and Stock Purchase Right shall be assumed or an equivalent option or
            right  substituted  by the  successor  corporation  or a  Parent  or
            Subsidiary  of  the  successor   corporation.   Notwithstanding  the
            foregoing,  the  Administrator  may, in lieu of such  assumption  or
            substitution, provide for the Optionee to have the right to exercise
            his or her  Options,  as to all of the  Shares or any part  thereof,
            including  Options which would not otherwise be  exercisable,  under
            such terms and conditions as the Administrator  shall determine,  in
            its sole  discretion.  In addition,  in the event that the successor
            corporation  refuses to assume or substitute for the Option or Stock
            Purchase Right,  the Optionee shall fully vest in and have the right
            to  exercise  the  Option or Stock  Purchase  Right as to all of the
            Optioned Stock,  including Shares as to which it would not otherwise
            be vested or  exercisable.  If an  Option  or Stock  Purchase  Right
            becomes  fully  vested  and  exercisable  in lieu of  assumption  or
            substitution in the event of a Transaction,  the Administrator shall
            notify the Optionee in writing or electronically  that the Option or
            Stock  Purchase  Right  shall be fully  exercisable  for a period of
            fourteen  (14) days from the date of such notice,  and the Option or
            Stock  Purchase  Right shall  terminate  upon the expiration of such
            period.  For the  purposes  of this  paragraph,  the Option or Stock
            Purchase  Right  shall  be  considered   assumed  if,   following  a
            Transaction,  the option or right  confers  the right to purchase or
            receive,  for each Share of Optioned  Stock subject to the Option or
            Stock  Purchase  Right  immediately  prior to the  Transaction,  the
            consideration (whether stock, cash, or other securities or property)
            received  in the  Transaction  by holders  of Common  Stock for each
            Share held on the effective date of the Transaction  (and if 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 common stock of the successor  corporation
            or its  Parent,  the  Administrator  may,  with the  consent  of the
            successor corporation,  provide for the consideration to be received
            upon the exercise of the Option or Stock  Purchase  Right,  for each
            Share of  Optioned  Stock  subject to the  Option or Stock  Purchase
            Right, to be solely common stock of the successor corporation or its
            Parent  equal in fair  market  value to the per share  consideration
            received by holders of Common Stock in the Transaction.

      12.4. Anything  herein to the  contrary  notwithstanding,  if prior to the
            consummation of the initial  offering of the Company's shares to the
            public on a domestic or foreign stock exchange, all or substantially
            all of the shares of the Company

<PAGE>
                                       15

            are to be sold,  to any third  party,  whether or not  related to or
            affiliated with the Company or its shareholders  each Optionee shall
            be obliged  to sell the Shares  such  Optionee  purchased  under the
            Option Plan, in accordance with the instructions  then issued by the
            Administrator whose determination shall be final.

13.   TIME OF GRANTING OPTIONS AND STOCK PURCHASE  RIGHTS.  The date of grant of
      an Option or Stock Purchase Right shall, for all purposes,  be the date on
      which the Administrator  makes the  determination  granting such Option or
      Stock  Purchase  Right,  or  such  other  date  as is  determined  by  the
      Administrator. Notice of the determination shall be given to each Employee
      or  Service  Provider  to whom an  Option  or Stock  Purchase  Right is so
      granted within a reasonable time after the date of such grant.

14.   AMENDMENT AND TERMINATION OF THE PLAN.

      14.1. AMENDMENT AND TERMINATION.  The Board may at any time amend,  alter,
            suspend or terminate the Plan.

      14.2. STOCKHOLDER APPROVAL. The Board shall obtain stockholder approval of
            any Plan  amendment to the extent  necessary and desirable to comply
            with Applicable Laws.

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

15.   CONDITIONS UPON ISSUANCE OF SHARES.

      15.1. LEGAL  COMPLIANCE.  Shares  shall  not  be  issued  pursuant  to the
            exercise  of an Option  unless the  exercise  of such Option and the
            issuance and  delivery of such Shares  shall comply with  Applicable
            Laws and shall be further subject to the approval of counsel for the
            Company with respect to such compliance.

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

<PAGE>
                                       16

      15.3. MARKET  STAND-OFF.   In  connection  with  any  underwritten  public
            offering  of  the  Company's  equity  securities,   pursuant  to  an
            effective registration statement,  for such period as the Company or
            its  underwriters  may request  (such  period not to exceed 180 days
            following the date of the applicable  offering),  the Optionee shall
            not,  directly or  indirectly,  sell,  make any short sale of, loan,
            hypothecate,  pledge,  offer,  grant  or sell  any  option  or other
            contract for the purchase of,  purchase any option or other contract
            for the sale of, or otherwise  dispose of or  transfer,  or agree to
            engage in any of the  foregoing  transactions  with  respect to, any
            Shares acquired under this Plan without the prior written consent of
            the Company or its underwriters.

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

17.   SPECIAL PROVISIONS FOR PLAN PARTICIPANTS WHO ARE ISRAELI RESIDENTS.

      17.1. This Section y17 shall apply only to Optionees  who are residents of
            the State of Israel or those who are deemed to be  residents  of the
            State of Israel for the payment of tax.

      17.2. Notwithstanding  anything herein to the contrary,  the Plan may also
            be  administered  pursuant  to certain  provisions  of  Section  102
            ("Section  102") or Section 3(i) ("Section  3(i)") of the Ordinance,
            or any law or regulations  which shall replace Sections 3(i) or 102,
            and the Israeli  Companies  Law 1999,  with respect to Employees and
            Service  Providers  who are Israeli  residents  (or are deemed to be
            Israeli residents under Applicable Laws),  subject to the receipt of
            all necessary  approvals  ("Approvals")  that are required under any
            Applicable  Laws,  and subject to the terms and conditions set forth
            in such  Approvals.  Details  regarding the terms and  conditions of
            Options and Stock Purchase Rights granted pursuant to the applicable
            provisions  of Section 102 in  addition  to those set forth  herein,
            will be delivered to the participants who are Israeli residents.

      17.3. Notwithstanding  anything herein to the contrary,  in the event that
            Options or Stock Purchase Rights are granted under the Plan pursuant
            to the  provisions  of  Section  102 ("102  Options"  and "102 Stock
            Purchase Rights"), each 102 Option and 102 Stock Purchase Right, and
            each Share  acquired  pursuant to a 102 Option or 102 Stock Purchase
            Right,  shall be issued by the  Company  to,  and held in trust (the
            "Trust")  for  the  benefit  of  such  Optionee  by a  trustee

<PAGE>
                                       17

            (the "Trustee") designated by the Board or by the board of directors
            of a  Subsidiary  of the  Company.  Options  granted  under the Plan
            pursuant to the  provisions of Section 3(i) of the Tax Ordinance may
            be granted to a Trustee.  All certificates  representing  Options or
            Shares  issued to the Trustee  shall be deposited  with the Trustee,
            and shall be held by the  Trustee  until such time that such  Shares
            are released  from the Trust as herein  provided.  The Trustee shall
            comply with all  requirements  under  Applicable Laws and Approvals,
            and shall hold the same  pursuant to the  instructions  of the Board
            and/or the board of directors of the Subsidiary,  to the extent such
            instructions do not contradict any Applicable Law.

      17.4. Notwithstanding  anything herein to the contrary,  no 102 Options or
            102 Stock Purchase Rights granted,  or Shares purchased  pursuant to
            thereto ("102 Shares") (or, to the extent  applicable,  3(i) Options
            or 3(i) Stock  Purchase  Rights) shall be released from the Trust to
            the Optionee or to any third party until such Optionee has deposited
            with the Trustee an amount of money which, in the Trustee's opinion,
            is necessary to  discharge  such  Optionee's  tax  obligations  with
            respect to such 102 Options, 102 Stock Purchase Rights or 102 Shares
            (or, to the extent  applicable,  3(i) Options or 3(i) Stock Purchase
            Rights),  or the Company or Subsidiary  has made other  arrangements
            for the deduction of tax at source acceptable to the Trustee.

      17.5. Upon  sale by an  Optionee  of any  securities  held in  Trust,  the
            Trustee shall withhold from the proceeds of such sale all applicable
            taxes,  shall remit the amount withheld to the  appropriate  Israeli
            tax  authorities,  shall pay the  balance  thereof  directly to such
            Optionee,  and shall report to such  Optionee the amount so withheld
            and paid to said tax authorities.

      17.6. Subject to the  provisions of Section y9.2 above,  all Shares issued
            upon the exercise of Options or Stock Purchase  Rights granted under
            the Plan  shall  entitle  the  Optionee  to receive  dividends  with
            respect  thereto,  and,  subject to the  provisions  of Section y9.3
            above,  to vote the same at any meeting of the  shareholders  of the
            Company.  For as long as shares  issued to the  Trustee on behalf of
            the  Optionee  are  held in the  Trust,  and  unless  the  Committee
            determines  otherwise,  the cash dividends paid with respect thereto
            shall be remitted  to the Trustee for the benefit of such  Optionee,
            and the Trustee  shall vote all such Shares in  accordance  with the
            provisions of Section y9.3 above.

      17.7. At the Administrator's discretion, for purposes of simplicity and in
            order to  ensure  compliance  with  Israel's  tax  regulations,  the
            exercise of the Options and the purchases and sales of Shares issued
            upon the exercise of Stock

<PAGE>
                                       18

            Purchase Rights made under the Plan shall be executed by the Company
            or its Subsidiaries, as appropriate.

      17.8. With respect to the participants who are Israeli residents, the Plan
            and all  instruments  issued  thereunder or in connection  therewith
            shall be governed by, and  interpreted in accordance  with, the laws
            of the State of Israel.

18.   DEFAULT.  An  Optionee  shall be deemed to be in default  under this Plan,
      including the Option  Agreement,  in the event that the Optionee  fails to
      pay any sum or  perform  any  obligation  provided  for in the Plan,  in a
      timely  fashion or in a manner  required.  Any default under this Plan not
      cured within ten (10) days after the Company gives written  notice of such
      default to Optionee  shall  entitle  the  Company to exercise  any and all
      remedies and rights against the defaulting  Optionee  contained in any and
      all of the documents  comprising  this Plan or provided  under  applicable
      law.

19.   NOTICES.  All  notices  and  elections  sent to the Company by an Optionee
      shall be in writing and  delivered in person or by  certified  mail to the
      president  or  secretary  of the  Company at the  principal  office of the
      Company.

      All notices given by the Company to an Optionee under the Plan shall be in
      writing and  delivered  in person or by certified  mail to the  Optionee's
      address as reflected in the Company's records.

      All notices will be deemed  delivered  within 7 days of their  dispatch by
      certified mail, postage prepaid.

20.   RESERVATION OF SHARES. The Company, during the term of this Plan, shall at
      all times  reserve  and keep  available  such number of Shares as shall be
      sufficient to satisfy the requirements of the Plan.

21.   STOCKHOLDER  APPROVAL.  The  Plan  shall be  subject  to  approval  by the
      stockholders  of the Company  within twelve (12) months after the date the
      Plan is adopted. Such stockholder approval shall be obtained in the degree
      and manner required under Applicable Laws.

22.   GOVERNING LAW. Except as set forth in Section y17.8 above, this Plan shall
      be governed in all  respects by the internal  laws,  but not the choice of
      law rules, of the State of New York.

23.   MISCELLANEOUS.  Any tax consequences arising from the grant or exercise of
      any  Options or Stock  Purchase  Rights,  or from the  payment  for Shares
      covered thereby, or from any sale or disposition of the Optioned Stock, or
      from any other event or act (whether of the Optionee,  the Trustee, or the
      Company  or its  Subsidiaries)  hereunder,  shall be borne  solely  by the
      Optionee.  Furthermore, such Optionee shall agree to

<PAGE>

                                       19

      indemnify  the Company or  Subsidiary  that  employs the  Optionee and the
      Trustee,  if applicable,  and hold them harmless  against and from any and
      all liability for any such tax or interest or penalty  thereon,  including
      without limitation,  liabilities relating to the necessity to withhold, or
      to have  withheld,  any such tax from any  payment  made to the  Optionee.
      Except as otherwise required by law, the Company shall not be obligated to
      exercise  any  Options on behalf of an  Optionee,  or to release any share
      certificate,  until all tax consequences arising from the exercise of such
      Options are resolved in a manner reasonably acceptable to the Company, and
      all required payments in connection with the exercise of the Option or the
      Stock Purchase Right,  or the sale of the Shares,  have been fully paid by
      the Employee.

24.   MULTIPLE  AGREEMENTS.  The terms of each  Option  may  differ  from  other
      Options granted under this Plan at the same time, or at any other time.

<PAGE>

                                    EXHIBIT A

                          IRREVOCABLE POWER OF ATTORNEY

I, the undersigned,  __________________  hereby  irrevocably invest the Board of
Directors  of the Company  with the  authority  to  appoint,  for all Regular or
Extraordinary General Meetings of Shareholders of Voice Diary Inc., on my behalf
and in my  name,  as it  shall  consider  appropriate,  and  regarding  all  the
Company's  shares  registered in my name, any  representative,  to vote all such
shares as such  representative  deems  appropriate,  under its sole  discretion,
starting from the date of this power of attorney and until the  consummation  of
the initial  offering to the public of the Company's  shares on a stock exchange
in the United states or in any other jurisdiction.

------------------
The Optionee

Date:
     -------------

<PAGE>

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