Document:

Form of Incentive Stock Award Letter

    Exhibit
      10.5

    

    Employee
      and Employee Director Form

    

     

    2002
      STOCK INCENTIVE PLAN OF THE FINISH LINE, INC.

    (AS
      AMENDED AND RESTATED JULY 21, 2005)

    INCENTIVE
      STOCK AWARD LETTER

    Name
      of
      Grantee: ___________________________________

     

    _______________,
      20__

     

    I
      am
      pleased to inform you that the Compensation and Stock Option Committee of the
      Board of Directors of The Finish Line, Inc. (the “Committee”) has approved a
      grant to you of an award of Incentive Stock of The Finish Line, Inc. (the
“Company”) as described below and as described in the 2002 Stock Incentive Plan
      of The Finish Line, Inc. (As Amended and Restated July 21, 2005) (the “2002
      Plan”) and the Award Agreement between you and the Company dated as of
      __________________ (the “Award Agreement”). Capitalized terms used herein but
      not otherwise defined herein shall have the meaning ascribed to such terms
      in
      the 2002 Plan or the Award Agreement. This is an Award Letter referred to in
      the
      Award Agreement.

     

    1. Amount
      of Incentive Stock.
      The
      Company hereby grants you an award of Incentive Stock representing the
      conditional receipt of _________ shares of Class A Common Shares (the “Incentive
      Stock”) subject to the terms and conditions of this Award Letter, the 2002 Plan
      and the Award Agreement.

     

    2. Grant
      Date.
      The
      Grant Date is __________________ (the “Grant Date”).

     

    3. Restrictions.
      The
      grant of the Incentive Stock award is subject to the following terms and
      conditions:

     

    (a) You
      will
      not own the Incentive Stock free and clear of the restrictions imposed by this
      Award Letter until your Incentive Stock is “Vested,” which occurs on the Vesting
      Date. [The
      Vesting Date is [INSERT DATE].  [The
      Vesting Date is the date on which the Committee, in its sole discretion,
      determines that [INSERT PERFORMANCE GOALS]].

     

    (b) The
      effect Termination of Employment has on the Incentive Stock is described in
      the
      Award Agreement.

     

    (c) During
      the period the Incentive Stock is not Vested, you shall be entitled to receive
      dividends and/or other distributions declared on such Incentive Stock and you
      shall be entitled to vote such Incentive Stock but you shall not be deemed
      for
      any other purpose to be a holder of the shares of Incentive Stock and no
      Incentive Stock or any interest therein may be sold, assigned, conveyed, gifted,
      pledged, hypothecated, or otherwise transferred in any manner other than by
      the
      laws of descent and distribution.

     

    
       

      
        
        

        
          

        

      

       

    

    4. Stock
      Certificates.
      The
      stock certificate(s) evidencing the Incentive Stock shall be registered on
      the
      Company’s books in your name as of the Grant Date. The Company may issue stock
      certificates or otherwise evidence your interest by using a book entry account.
      Physical possession or custody of such stock certificates shall be retained
      by
      the Company until such time as the shares of Incentive Stock are Vested in
      accordance with paragraph 3. The Company reserves the right to place a legend
      on
      the stock certificate(s) restricting the transferability of such certificates
      and referring to the terms and conditions (including forfeiture) of this Award
      Letter, the 2002 Plan and the Award Agreement. You shall deliver to the Company
      such number of stock powers, endorsed in blank, as the Company shall require
      with respect to the Incentive Stock to be held by the Company during each
      restriction period. As soon as practicable after Vesting, the Secretary of
      the
      Company shall cause ownership of the appropriate number of Class A Common Shares
      to be transferred to you by having a certificate or certificates for those
      Class
      A Common Shares registered in your name.

     

    5. The
      2002 Plan and the Award Agreement.
      The
      Incentive Stock award described in this Award Letter is not effective until
      you
      have executed and delivered the Award Agreement to the Company. The Incentive
      Stock award and this Award Letter are subject to all the terms, provisions
      and
      conditions of the 2002 Plan and the Award Agreement, both of which are
      incorporated herein by reference, and to such regulations as may from time
      to
      time be adopted by the Committee. A copy of the 2002 Plan prospectus has been
      furnished to you and can be found on the Company’s intranet “SPIKE”. A paper
      copy of the 2002 Plan, the 2002 Plan prospectus and the Award Agreement will
      be
      provided upon your written request to the Company at 3308 North Mitthoeffer
      Road, Indianapolis, Indiana 46235 Attention: Secretary (or such other addresses
      as the Company may hereinafter designate in writing).

     

    
      	 	
              Very
                truly yours,

            
	 	 
	 	 
	 	 
	 	 
	 	
              Gary
                D. Cohen, Executive Vice President - General
                Counsel

            

    

    
 

     

     

    -2-EXHIBIT 10.1

                            DEVELOPMENT AGREEMENT(1)

This Development Agreement ("Agreement"), dated as of March 30, 2005 (the
"Agreement Date"), is between M-Systems Flash Disk Pioneers Ltd., an Israeli
company having its principal place of business at Central Park 2000, 7 Atir Yeda
St., Kfar Saba, 44425, Israel ("M-Systems"), and PowerHouse Technologies Group,
Inc., a Delaware corporation having its principal place of business at 2694
Bishop Drive, Suite 270, San Ramon CA 94583 ("PowerHouse"). M-Systems and
PowerHouse may be referred to individually as a "Party" or collectively as
"Parties".

1.     INTRODUCTION

       1.1.   PowerHouse is engaged in the development of mobile computing
              software;

       1.2.   M-Systems has developed and sells a "flash based" key chain
              storage device known as the DiskOnKey(R) ("DiskOnKey");

       1.3.   M-Systems desires PowerHouse to perform certain development work
              to modify technologies of PowerHouse to operate in and in
              conjunction with M-Systems USB Drives (as such term is defined
              below); and

       1.4.   M-Systems further desires to receive and PowerHouse desires to
              grant to M-Systems the right to use and distribute the Migo
              Products (as such term is defined below) to be used in, together
              and in conjunction with M-Systems USB Drives subject to the terms
              and conditions of this Agreement.

       ACCORDINGLY, in consideration of the mutual covenants and promises
       contained herein, the Parties agree as follows:

2.     DEFINITIONS

       As used in this Agreement, the following capitalized terms shall have the
       following meanings:

       2.1.   Associated Company means any corporation, company or other legal
              entity, where more than fifty percent (50%) of the voting power of
              which is, now or hereafter, owned or controlled, directly or
              indirectly by a Party hereto, or jointly by the Parties hereto;
              provided, however, that any corporation, company or other legal
              entity shall be an Associated Company of a Party only for as long
              as such ownership or control exists.

       2.2.   Intellectual Property Rights means rights in patents (including
              reissues, divisions, continuations, continuation-in-part, and
              extensions thereof), utility models, and registered and
              unregistered designs including copyrights, trade secrets and any
              other form of protection afforded by law to inventions, models,
              designs or other Information, and applications therefor including
              without limitation, patents, trademarks, copyrights and trade
              secrets relating to the Development Projects and that are: (i)
              owned or controlled by a Party or an Associated Company, and (ii)
              exist prior to the beginning of the Development hereunder or
              result from activities that are independent from said Development,
              and (iii) developed by each party pursuant to this Agreement in
              the course and as part of the Development Project. PowerHouse's
              Intellectual Property Rights includes without limitation all
              PowerHouse Technology. M-Systems' Intellectual Property Rights
              includes without limitation all M-Systems Technology.

(1) Legend: In this document, [*] connotes material that has been omitted
pursuant to a request for confidential treatment of the same. Such omitted
material has been filed with the Securities and Exchange Commission on a
confidential basis.

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       2.3.   Business Day means any day other than a Saturday, a Sunday or any
              day, which is otherwise an official bank holiday in the United
              States of America.

       2.4.   Confidential Information means all Information disclosed to one
              Party by the other Party that is marked or designated Confidential
              or Proprietary or, in the case of verbal disclosures, which are
              summarized in a writing, marked or designated Confidential or
              Proprietary and furnished within thirty days to the Party
              receiving such Confidential Information; provided that the lack of
              such summary in writing shall not derogate from the qualification
              of oral information as a Confidential Information hereunder.

       2.5.   Development Projects means the development work to be performed by
              each Party in accordance with the work allocation and time
              schedule as set forth in a Statement of Work, and any mutually
              agreed modifications or extensions thereof, with the aim to
              develop Software Applications, as defined below.

       2.6.   Escrow Agent shall mean such party as agreed upon between the
              parties.

       2.7.   Escrow Agreement shall mean a separate agreement to be executed by
              PowerHouse, M-Systems and the Escrow Agent in the form attached
              hereto as Exhibit E, which agreement shall embody the appropriate
              escrow terms for deposit of the Source Code.

       2.8.   Information means circuits, protocols, drawings, specifications,
              samples, models, processes, procedures, instructions, technology,
              applied development engineering data, reports, and all other
              technical or commercial information, data and documents excluding
              any Intellectual Property Rights related to such Information,
              which is (i) owned or controlled by a Party, and existing prior to
              the beginning of the Development under this Agreement, or (ii)
              resulting from activities of a Party that are independent from the
              Development under this Agreement or (iii) developed as part of and
              in the course of the Development Projects.

       2.9.   Migo Personal shall mean the Migo USB Drive software product
              offered by PowerHouse as of the Agreement Date for all currently
              supported platforms and all currently provided functionality, with
              the exception of the Outlook synchronization feature. The Migo
              Personal shall contain an upgrade mechanism which shall be defined
              by both parties and fully managed and operated by PowerHouse;
              provided, however, that the upgrade mechanism will permit upgrade
              only to the same Migo software and functionality as Migo
              Professional.

       2.10.  Migo Products shall mean the Migo Personal, the Migo Professional
              and/or the Migo Upgrade.

       2.11.  Migo Professional shall mean the Migo USB Drive software product
              offered by PowerHouse as of the Agreement Date for all currently
              supported software platforms and all currently provided
              functionality, including the Outlook synchronization feature.

       2.12.  Migo Upgrade shall have such meaning as described in Section 3.3.

       2.13.  M-Systems Customers shall mean purchasers or licensees of
              M-Systems USB Drives and/or technology, as relevant, whether
              labeled under M-System's name or under M-Systems partners',
              resellers' or OEM's names.

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       2.14.  M-Systems Technology shall mean, without limitation, DiskOnKey
              designs and technology (as more fully described in Exhibit A).

       2.15.  M-Systems USB Drives shall mean USB Drives manufactured by or on
              behalf of M-Systems or by its Associated Companies, partners,
              resellers or OEM's utilizing the M-Systems Technology.

       2.16.  PowerHouse Technology shall mean the technology described in
              Exhibit B.

       2.17.  Statement of Work means a plan for the Development Projects under
              this Agreement as set out in the Product Development Plan and
              includes product specifications, a development schedule,
              deliverables, acceptance criteria.

       2.18.  U3 shall mean U3 LLC, a Delaware limited liability company under
              authorization of the members of U3 Group, which includes M-Systems
              and SanDisk Corporation, and has developed a next generation USB
              flash drive technology.

       2.19.  U3 Drives shall mean a USB Drive which complies fully with the U3
              specifications.

       2.20.  U3 Software shall mean software products, solely to the extent
              such software products run on a U3 Drive, where such software
              products comply with all portions of the Software and U3 Related
              Products Agreement to be entered into by a software provider and
              U3.

       2.21.  USB Drive means any removable data storage products comprised of a
              non-detachable fixed USB connector (i.e., not connected via a
              cable of any length) and embedded flash, or other, memory for data
              storage, contained within a single integrated shell package.

       2.22.  Migo EULA means the End User License Agreement included with each
              Migo Product.

3.     BUSINESS COLLABORATION

       M-Systems shall promote the Migo Products in accordance with the
       following guidelines:

       3.1.   PowerHouse will develop the Migo Products and will adapt them to
              run as U3 Software in accordance with U3 guidelines and pursuant
              to the terms of the Software and U3 Related Products Agreement to
              be entered into by PowerHouse and U3.

       3.2.   PowerHouse hereby grants M-Systems and its Associated Companies a
              worldwide, transferable license to market, distribute, promote,
              offer for sale, offer for re-sale and sell the Migo Products as an
              integrated part of M-Systems USB Drives only, and to use and
              display the trademarks, names, service marks, and logos of
              PowerHouse related to the Migo Products or in connection with such
              M-Systems USB Drives only. [*]

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<PAGE>

       3.3.   [*]

       3.4.   M-Systems, to the extent commercially practicable, will promote
              the Migo Upgrade as the primary Migo Product to M-Systems
              Customers. Furthermore, M-Systems will actively promote
              PowerHouse's interests with M-Systems' Customers, aiming at
              allowing PowerHouse to market its Migo Product upgrades directly
              to M-Systems' Customers end-user base. PowerHouse will provide
              M-Systems with its recommended marketing messages in order to
              promote the bundling of the Migo Products with the M-Systems USB
              Drives.

       3.5.   PowerHouse will make such changes to the trademark labeling
              included in the Migo Products as an M-Systems Customer reasonably
              deems necessary for such M-Systems Customer to promote the Migo
              Products. M-Systems Customers' promotional and packaging materials
              which include the Migo brand name must be submitted to PowerHouse
              for approval, which approval shall not be unreasonably withheld.

       3.6.   PowerHouse will provide first level support for all Migo Products
              directly to M-Systems and M-Systems Customers and their end-users,
              for 30 days from the date of the first use of the software by the
              end user. With respect to any M-Systems Customer who chooses to
              provide first level support itself to its end-users, PowerHouse
              will provide training and second level support as may be required
              by such M-Systems Customer and accepted by PowerHouse. PowerHouse
              will provide training 3 times per year at PowerHouse's location.
              If the training is requested at other locations, there will be
              charges associated with the training in amounts determined by
              PowerHouse and which will be borne by the M-Systems Customer. In
              the case where PowerHouse is providing the level-1 support, if it
              is determined that the problem is not related to Migo Products,
              M-Systems will pay PowerHouse for providing such first line of
              support. A process and the fee structure will be established prior
              to the product launch. Without derogating from the preceding
              sentence, PowerHouse shall provide M-Systems and M-Systems
              Customers with such upgrades, features, technical support and
              maintenance services as it provides to its other customers
              generally and without special negotiation of terms and conditions.
              Upgrades for this purpose shall be considered fixes and
              enhancements to the existing product and will not include new
              features or functionality that may be marketed and sold by
              PowerHouse as value added products.

       3.7.   Exclusivity.

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                     3.7.1. Other than for those customers and with respect to
              those products listed next to their names in Exhibit F, during the
              Term of this Agreement, PowerHouse shall not provide any other
              party and any other party's customers with services or
              applications for USB Drives provided or similar to those provided
              to M-Systems Customers as set forth in this Agreement, and shall
              not bundle, or allow to be bundled. The Migo Products (or
              variations thereof) with any other USB Drive other than M-Systems'
              USB Drives. Exhibit F may be amended upon the mutual written
              agreement of the parties.

              Notwithstanding anything to the contrary contained elsewhere in
              this Agreement or any exhibit or schedule hereto, the exclusivity
              set forth above shall not be deemed to restrict or limit in any
              manner the full and complete right of PowerHouse to market, sell,
              license and distribute Migo Products:

                     (a)    for use in connection with (1) MP3 players, (2)
                            Cell/smart phones, (3) PDAs, (4) SIM cards, (5) USB
                            watches and/or (6) memory cards in devices marketed
                            by PowerHouse or others (other than standalone USB
                            Drives), if PowerHouse offers M-Systems a 30-day
                            right of first refusal to acquire the rights for any
                            such device on the terms offered to the first third
                            party acquiring rights for any such device from
                            PowerHouse and M-Systems does not exercise such
                            right; and

                     (b)    to PowerHouse customers who or which acquire Migo
                            Products (including USB Drives on which Migo
                            Products are installed) directly from PowerHouse.

                     3.7.2. For the avoidance of any doubt M-Systems shall be
              entitled in its sole and absolute discretion to market and sell
              the M-Systems USB Drives, either directly or indirectly, without
              the Migo Products, and, except as expressly provided herein,
              PowerHouse shall have no right or claim under this Agreement or
              otherwise for loss of profit, loss of revenues or the like.

       3.8.   Beginning on the date (the "English Language Start Date") which is
              two months after the Migo Products have been approved for English
              Language Gold Release pursuant to section 4.5, M-Systems shall
              bundle with M-Systems USB Drives [*].

              Beginning on the date (the "International Start Date") which is
              the date on which Migo Products have been approved for
              International Gold Release pursuant to section 4.5 (a) the
              schedule in the preceding sentence shall no longer be applicable
              and the following schedule shall apply:

              (a)    [*]

              (b)    [*]

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              (c)    [*]

              In the event the M-Systems fails to meet the commitment in this
              Section 3.9 and does not cure such failure after 30 days written
              notice, the exclusivity provisions in Section 3.8 shall cease
              until such time as M-Systems meets the commitment herein.

       3.9.   [*]

              Notwithstanding anything to the contrary contained elsewhere in
              this Agreement or any exhibit or schedule hereto, the restrictions
              and price adjustments set forth above shall not be deemed
              applicable to or with respect to any sales or licenses of Migo
              Products:

                     (a)    for use in connection with (1) MP3 players, (2)
                            Cell/smart phones, (3) PDAs, (4) SIM cards, (5) USB
                            watches and/or (6) memory cards in devices marketed
                            by PowerHouse or others (other than standalone USB
                            Drives), if PowerHouse offers M-Systems a 30-day
                            right of first refusal to acquire the rights for any
                            such device on the terms offered to the first third
                            party acquiring rights for any such device from
                            PowerHouse and M-Systems does not exercise such
                            right; and

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                     (b)    to PowerHouse customers who or which acquire Migo
                            Products (including USB Drives on which Migo
                            Products are installed) directly from PowerHouse.

4.     DEVELOPMENT

       4.1.   The parties will appoint technical representatives to coordinate
              technological cooperation between the parties (the "Technical
              Team"). The Technical Team will be responsible for discussing and
              overseeing the integration between Migo Products and M-Systems USB
              Drives.

       4.2.   PowerHouse and M-Systems will disclose to each other Information
              to the extent necessary for implementing Development Projects in
              accordance with a Product Development Plan. The Product
              Development Plan and any amendments thereof, once mutually agreed
              upon by the Parties will be incorporated by reference into this
              Agreement as an Addendum and shall constitute a part hereto. The
              initial Product Development Plans is attached as Exhibit C of this
              Agreement.

       4.3.   The specific goal of the Development Project is to develop
              software applications required to bundle the Migo Products with
              M-Systems USB Drives and to provide M-Systems Customers with the
              Migo Products as set forth herein (the "Software Applications").

       4.4.   In implementing Development Projects, PowerHouse and M-Systems
              will cooperate fully to accomplish the work allocated to each
              party within the time schedule as set forth in the Product
              Development Plan. The parties acknowledge that the time schedules
              of a Statement of Work in a Product Development Plan are best
              estimates as of the time of its preparation and, unless otherwise
              agreed in writing, neither Party shall be liable for any delays in
              accomplishing the development work therein. Each of PowerHouse and
              M-Systems will be responsible for their respective development
              responsibilities and bear its own development costs, in accordance
              with a Product Development Plan. Each Party will complete its
              development responsibilities and achieve its milestones in
              accordance with the schedule. For each day a Party is late in
              achieving a milestone, then the deadlines for the other Party's
              outstanding milestones will be extended one day. If for any reason
              the development does not proceed in accordance with the schedule,
              either Party may request a meeting to discuss the delay. If such a
              meeting is requested, the Parties shall meet and discuss in good
              faith mechanisms to expedite development and avoid further delays,
              and will make necessary adjustments to the Product Development
              schedule.

       4.5.   Without derogating from the preceding section, it is the intent of
              the parties that PowerHouse shall deliver a final (post QA) U3
              compliant version of each of the Migo Products by no later than 3
              weeks following release of final U3 LaunchPad software. M-Systems
              shall confirm to PowerHouse when each Migo Product has passed
              M-Systems' internal acceptance tests and is U3 compliant. Versions
              M-Systems approves for release shall be known as "Gold Releases".
              Initially, the Migo Products will be prepared for release in the
              English Language (the "English Language Gold Release"). The
              English Language Gold Release shall be completed by no later than
              3 weeks following release of final U3 LaunchPad software.
              Subsequently, a version

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              will be prepared for international release in English, French,
              German, Italian and Spanish Languages (the "International Gold
              Release").

       4.6.   Each Party shall be responsible for its respective expenses and
              liabilities arising in connection with the Development Project(s)
              including any travel or other expenses incurred by employees of
              that Party in connection therewith.

5.     REFERRAL FEE

       5.1.   [*]

6.     AUDIT RIGHTS

       6.1.   Exchange of Report; Audit Rights. Within no later than 30 days
              after the end of each month, each party shall provide the other
              with a written report in the form attached as Exhibit D of this
              Agreement and which will include the calculation of all Referral
              and License Fees due to the other, as applicable. PowerHouse's
              written report shall include a breakdown of upgrades per M-Systems
              Customer. Based on the report each party shall invoice the other
              for the Referral or License Fees, as applicable ("Invoice"). If
              the Parties do not agree with any of the reports, the Parties will
              use all reasonable efforts to settle disputes by mutual agreement.
              If any dispute is not so settled, the disputing party may exercise
              its right to audit as set forth in sub-section 6.5 below. In the
              event such audit verifies an underpayment error, the audited party
              shall promptly pay the auditing party for the full amount of any
              underpayment verified in the audit. Any such discrepancy
              discovered as a result of such audit, will be reflected in the
              following report and rectified and payment shall be made net
              within 30 days from receipt of audit report.

       6.2.   Payment of Referral and License Fees. Referral Fees based on
              upgrades through the Custom Landing Page shall accrue upon each
              successful download of the upgrade. Such Referral Fee shall be
              non-refundable regardless of the length of subscription to such
              upgrade. Payment of Referral and License Fees shall be made by the
              relevant party net within thirty (30) days of the Invoice. If
              there is any discrepancy in the report for any month, as described
              in Section 6.1, any required reconciliation in payments shall be
              made within 15 Business Days of the resolution of any disputes.

       6.3.   Late Payments. Payments not received in accordance with this
              Section 6 shall be subject to a late payment charge of one and
              one-half percent (1.5%) per month or the highest amount permitted
              by law, whichever is less, commencing on the date such payment
              became due.

       6.4.   Taxes. All fees payable by one party to the other under this
              Agreement are on an exclusive basis and do not include all current
              and future applicable taxes and duties, including, but not limited
              to, Value Added Tax, sales tax, if applicable to such payments,
              which shall be added to such fees, or paid directly by the party
              paying such fees, as applicable. Notwithstanding the aforesaid,
              any income or other tax which a party is required by law to pay or
              withhold on behalf of the other party with respect to any amounts
              payable to such other party under this Agreement may be deducted
              from the amount of

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              payments, provided, however, that in regard to any such deduction,
              the deducting party shall upon request furnish to the other party
              such certificates and other evidence of deduction and payment
              thereof as such other party may properly require. Stamp tax, if
              any, shall be borne equally by the parties.

       6.5.   Each party shall keep complete and accurate records pertaining to
              any license fee pursuant to Section 3.2 or upgrade purchased
              pursuant to Section 3.3, as relevant, which will be sufficient to
              verify full compliance with this Agreement. Each party shall be
              entitled to have the books and records of the other party audited
              by one of the "nationally recognized independent public
              accountants qualified under PCAOB guidelines". Any such audit
              shall be conducted during normal business hours and shall include
              the right to review and copy all records that contain information
              bearing upon the audited party's compliance with the terms of this
              Agreement. Such records shall be maintained for at least five
              years after their date of creation. The cost of such audit shall
              be paid by the auditing party provided that if the audit shows an
              underpayment of more than 5% by the audited party, the audited
              party shall bear the costs of such audit.

7.     INTELLECTUAL PROPERTY RIGHTS

       7.1.   Ownership. PowerHouse owns the PowerHouse Technology and the
              PowerHouse Intellectual Party Rights. M-Systems owns the M-Systems
              Technology and the M-Systems Intellectual Property Rights. Without
              derogating from the preceding sentences, to the extent that any
              improvements are made in the course of development of the Software
              Applications to either M-Systems Technology or PowerHouse
              Technology, such improvements shall be owned solely by the party
              who owns the relevant Technology.

       7.2.   No Implied Licenses. No license or right is granted by either
              Party to the other, by implication or by estoppel, or otherwise to
              any patents, inventions, or other property right, other than the
              licenses and rights expressly granted in this Section.

8.     CONFIDENTIAL INFORMATION

       8.1.   Each Party agrees not to use Confidential Information disclosed to
              it by the other Party for its own use or for any purpose except
              the Development Projects as set forth in this Agreement.
              Confidential Information shall not be disclosed to third parties
              or to either Party's employees or consultants except employees or
              consultants who are required to have the Confidential Information
              in order to carry out the Development Projects, management
              associated with the employees carrying out the Development
              Projects, attorneys and accountants, and senior management of the
              Parties, provided that such parties are subject to written
              confidentiality obligations. Each Party agrees that it will take
              all reasonable steps which are customary in the industry in which
              the Parties operate to protect the secrecy of and avoid disclosure
              or use of Confidential Information in order to prevent the
              Confidential Information from falling into the public domain or
              the possession of unauthorized persons. Each Party agrees to
              notify the other

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              Party in writing of any misuse or misappropriation of Confidential
              Information which may come to the Party's attention.

       8.2.   The confidentiality obligations imposed under Section 8.1 shall
              not apply to Information which:

              8.2.1. is generally available to the public prior to disclosure
                     under this Agreement; or

              8.2.2. is generally known to the receiving Party prior to the
                     disclosure under this Agreement as evidenced by written and
                     dated material; or

              8.2.3. through no fault of the receiving Party becomes part of the
                     public domain after disclosure under this Agreement; or

              8.2.4. is disclosed to the receiving Party by any third party
                     having a bona fide right to do so; or

              8.2.5. is approved for release by the written authorization of the
                     disclosing Party; or

              8.2.6. is disclosed pursuant to the requirement of a government
                     agency or by operation of law after the disclosing Party
                     has been given at least thirty (30) days notice and an
                     opportunity to object to such disclosures.

              8.2.7. is independently developed by the receiving Party without
                     use of the disclosing Party's Confidential Information.

       8.3.   Each Party shall immediately notify the other Party of any private
              or governmental request for the Confidential Information or any
              other information or documents relating to this Agreement.

       8.4.   Each Party shall have the right to participate in any other
              Party's response to any such request. In the event that a Party
              receives any subpoena or other legal process requiring the
              production of information, documents, data, work papers, reports,
              or other materials relating to Confidential Information or to this
              Agreement, then the Party shall:

              8.4.1. give the other Party, if possible, the opportunity to
                     participate in quashing, modifying, or otherwise responding
                     to any compulsory process in an appropriate and timely
                     manner; and

              8.4.2. cooperate fully with the other Party's efforts to narrow
                     the scope of any such compulsory process, to obtain a
                     protective order limiting the use or disclosure of the
                     information sought, or in any other lawful way to obtain
                     continued protection of the Confidential Information.

       8.5.   If either Party becomes aware of the loss, theft, or
              misappropriation of the other Party's Confidential Information
              which is in its possession, such Party shall notify the other
              Party in writing within ten (10) Business Days of its discovery of
              the loss, theft, or misappropriation of such Confidential
              Information.

9.     TERM AND TERMINATION

                                                                         Page 10
<PAGE>

       9.1.   This Agreement shall have a term [*] and may not be terminated for
              the convenience of either Party. However, either Party may
              terminate this Agreement in the event of a breach or default by
              the other Party (the "breaching Party"). The Party alleging a
              breach or default (the "non-breaching Party") shall provide a
              written notice of termination to the breaching Party specifying
              the facts and circumstances relating to the alleged breach or
              default as set forth above; provided; however, that this Agreement
              shall not be terminated if the specified breach or default is
              remedied or cured within thirty (30) days after notice of breach
              or default is provided. If such specified breach or default is not
              remedied or cured within thirty (30) days after notice of breach
              or default is provided, and the breaching Party does not dispute
              that it has breached or defaulted and that the breach or default
              is material, then termination shall take effect upon expiration of
              the thirty-day period. Notwithstanding anything to the contrary in
              this Section 9.1, breaches for non-payment of any fees due and
              payable must be cured within 10 days of notice of such breach.

       9.2.   If at any time during the term of this Agreement, (i) a Party
              becomes insolvent; or (ii) a Party admits in writing its
              insolvency or inability to pay its debts or perform its
              obligations as they mature; or (iii) a party becomes subject to
              any voluntary or involuntary proceedings in bankruptcy,
              liquidation, dissolution, receivership, attachment or composition
              or general attachment for the benefit of creditors, provided that
              if such condition is assumed involuntarily it has not been
              dismissed with prejudice within thirty (30) days after it begins;
              the other Party may terminate this Agreement upon thirty days
              advanced written notice.

       9.3.   In the event of termination of this Agreement by either Party,
              each Party shall immediately discontinue use of the Confidential
              Information received from the other Party, and within five (5)
              days after termination, each Party shall provide to the other
              Party a certification that the originals and all copies of such
              Confidential Information, regardless of form, have been returned
              to the disclosing Party or else destroyed.

       9.4.   Sections 5, 6, 7, 8, 9.4, 10, 11, 12 and 13 shall survive the
              termination of this Agreement for any reason whatsoever.

10.    LIABILITY AND INDEMNITY

       10.1.  Each party shall, at its own expense, indemnify, defend and hold
              the other party and its Associated Companies ("Indemnified
              Parties") harmless from any and all claims, allegations, demands,
              liabilities, losses, damages, awards, judgments or settlements,
              including all reasonable costs and expenses related thereto
              including attorney's fees ("Claims"), that may be asserted,
              granted, imposed or brought against any Indemnified Party directly
              arising from or in connection with any Claims that the
              indemnifying party's technology or products infringe any
              copyright, patent, trade mark, trade secret or other intellectual
              property right.

       10.2.  As between M-Systems, PowerHouse and each M-Systems Customer,
              M-Systems will not be responsible for anything related to the Migo
              Products or of any losses, damages or expenses incurred by
              M-Systems Customers in

                                                                         Page 11
<PAGE>

              connection with the use of the Migo Products. PowerHouse shall be
              the sole party responsible for such losses damages or expenses.

       10.3.  As between M-Systems, PowerHouse and each M-Systems Customer,
              PowerHouse will not be responsible for anything related to the
              products or technology of M-Systems or of any losses, damages or
              expenses incurred by M-Systems Customers in connection with the
              use of the M-Systems products or technology. M-Systems shall be
              the sole party responsible for such losses damages or expenses.

       10.4.  PowerHouse shall, at its own expense, indemnify, defend and hold
              M-Systems and its Associated Companies harmless from any and all
              Claims, that may be asserted, granted, imposed or brought against
              M-Systems and its Associated Companies arising from or in
              connection with any Claims brought by M-Systems Customers in
              connection with the Migo Products, excluding claims for loss of
              data or loss of profits.

       10.5.  M-Systems shall, at its own expense, indemnify, defend and hold
              PowerHouse and its Associated Companies harmless from any and all
              Claims, that may be asserted, granted, imposed or brought against
              PowerHouse and its Associated Companies arising from or in
              connection with any Claims brought by third parties in connection
              with the M-Systems products, excluding claims for loss of data or
              loss of profits.

11.    REPRESENTATIONS AND WARRANTIES

       11.1.  PowerHouse represents and warrants that it has all the rights
              necessary to enter into this Agreement and to perform its
              obligations hereunder.

       11.2.  PowerHouse represents and warrants that to the best of its
              knowledge it has all necessary rights in, and to, all copyrights,
              patents and other proprietary rights associated with the
              PowerHouse Technology.

       11.3.  M-Systems represents and warrants that it has all the rights
              necessary to enter into this Agreement and to perform its
              obligations hereunder.

       11.4.  M-Systems represents and warrants that to the best of its
              knowledge it has all necessary rights in, and to, all copyrights,
              patents and other proprietary rights associated with the M-Systems
              Technology.

       11.5.  Warranty Disclaimers. EXCEPT AS EXPRESSLY WARRANTED IN THIS
              AGREEMENT, THE PARTIES DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR
              IMPLIED, ORAL OR WRITTEN, INCLUDING, WITHOUT LIMITATION, (A) ANY
              WARRANTY THAT THE ANY TECHNOLOGY IS ERROR-FREE, WILL OPERATE
              WITHOUT INTERRUPTION, OR IS COMPATIBLE WITH ALL EQUIPMENT AND
              SOFTWARE CONFIGURATIONS; (B) ANY WARRANTY OF MERCHANTABILITY; AND,
              (C) ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. NEITHER
              PARTY IS LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL,
              SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING THE LOSS OF PROFITS,
              REVENUE, DATA, OR USE OR COST OF PROCUREMENT OF SUBSTITUTE GOODS
              INCURRED BY ANY PARTY OR ANY THIRD PARTY, WHETHER IN AN ACTION IN
              CONTRACT OR TORT OR BASED ON A WARRANTY, EVEN IF ANY

                                                                         Page 12
<PAGE>

              PARTY OR THIRD PARTY HAS ADVISED OF THE POSSIBILITY OF SUCH
              DAMAGES.

       11.6.  LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY
              HEREIN, IN NO EVENT SHALL EITHER PARTY'S LIABILITY TOWARDS THE
              OTHER PARTY CAUSED BY ANY BREACH OF ANY WARRANTY IN THIS AGREEMENT
              EXCEED THE GREATER OF (i) THE AGGREGATE CONSIDERATION PAYABLE BY
              M-SYSTEMS TO POWERHOUSE HEREUNDER; OR (ii) US$ 1,000,000.

12.    SOURCE CODE ESCROW

       12.1.  The Parties agree to appoint within sixty (60) days of the date
              the software applications are delivered pursuant to the Statement
              of Work an Escrow Agent or such other escrow agent as is a
              mutually acceptable and to execute the Escrow Agreement.

       12.2.  The parties agree that the Escrow Agent must be independent and
              located outside of the USA and Israel.

       12.3.  M-Systems and PowerHouse acknowledge and accept the terms of the
              Escrow Agreement and agree on behalf of themselves to be bound by
              the provisions therein.

       12.4.  Any breach of this Section 12 by the Parties shall be considered a
              material breach of this Agreement.

       12.5.  If the Deposit Materials, as defined in the Escrow Agreement, are
              not deposited with the Escrow Agent according to the terms of the
              Escrow Agreement within ten (10) days from the Agreement Date
              (provided that the Escrow Agreement was signed during such
              period), M-Systems shall have the right to terminate this
              Agreement forthwith without any liability and without limitation
              to any other rights M-Systems may have.

       12.6.  Without limitation to any terms of the Escrow Agreement,
              PowerHouse shall, within thirty (30) days of the date of signature
              of the Escrow Agreement, provide to the Escrow Agent one copy of
              the Deposit Materials and shall thereafter during the term of this
              Agreement, simultaneously with the delivery of Updates to
              M-Systems, also provide to the Escrow Agent in source code format
              (1) copy of such Update.

       12.7.  The Escrow Agent will deliver the Deposit Materials to M-Systems
              only under the circumstances defined in the Escrow Agreement.

       12.8.  The costs of the Escrow Agent shall be borne by M-Systems.

       12.9.  The provisions of the Escrow Agreement shall survive the
              termination or expiration of this Agreement regardless of the
              reasons therefor, and shall terminate upon termination of the
              Escrow Agreement according to its terms.

13.    GENERAL PROVISIONS

       13.1.  Choice of Law. This Agreement shall be construed under, and
              interpreted in accordance with, the laws of the State of
              California and of the United States of America without giving
              effect to the principles of conflicts laws. In the event of any
              lawsuit or other proceeding to enforce the provisions of this
              Agreement, the prevailing Party shall be entitled to recover its
              reasonable

                                                                         Page 13
<PAGE>

              attorney's fees and expenses. Whenever possible, each provision of
              this Agreement will be interpreted so as to be effective and valid
              under applicable law, but if any provision is held to be invalid
              under applicable law, either in whole or in part, the provision
              will be ineffective only to the extent of such invalidity, and the
              remaining provision of this Agreement shall remain in full force
              and effect. The failure by either Party to enforce any of the
              terms and conditions of this Agreement shall not constitute a
              waiver of such Party's right thereafter to enforce that or any
              other terms and conditions of this Agreement.

       13.2.  Limitation on Liability. Neither Party shall be liable to each
              other in contract, tort or otherwise, whatever the cause thereof,
              for any loss of profit, business or goodwill or any indirect,
              special, consequential, incidental or punitive cost, damages or
              expense of any kind, howsoever arising under or in connection with
              this Agreement.

       13.3.  Assignment. Neither M-Systems nor PowerHouse shall assign any of
              its rights or privileges hereunder without the prior written
              consent of the other party, such consent not to be unreasonably
              withheld.

       13.4.  Independent Contractors. The relationship of M-Systems and
              PowerHouse shall be that of independent contractors. There is no
              relationship of agency, partnership, joint venture, employment or
              franchise between the Parties. Neither Party has the authority to
              bind the other or to incur any obligation on behalf of the other
              Party or to represent itself as the other's agent or in any way
              that might result in confusion as to the fact that the Parties are
              separate and distinct entities.

       13.5.  Non-Solicitation. Each of PowerHouse and M-Systems agree that
              during the term of this Agreement, and for a period of 12 months
              thereafter, it shall not induce or solicit any employee of the
              other or its Associated Companies to leave his or her employment
              therewith.

       13.6.  Notices. All communications relating to and notices required under
              this Agreement shall be directed as:

              Communications and Notices to PowerHouse:

                  PowerHouse Technologies Group, Inc.
                  555 Twin Dolphin Drive, Suite 650, Redwood City, CA 94065 USA
                  Attn: General Counsel
                  Fax: 1-650-232-2699

              Communications and Notices to M-Systems:

                  M-Systems Flash Disk Pioneers Ltd.
                  Central Park 2000, 7 Atir Yeda St., Kfar Saba, 44425, Israel
                  Attention:  General Counsel
                  Fax: 011-972-3-548-0575

              Unless specifically set forth otherwise, all notices or
              communications of any kind made or required to be given pursuant
              to this Agreement shall be in writing and delivered to the other
              Party at the address set forth above, unless either Party gives
              notice to the other party of a change of address. All notices or
              communications shall be made by hand delivery, established
              overnight courier service, facsimile or prepaid certified mail
              return receipt

                                                                         Page 14
<PAGE>

              requested. Notices shall be deemed delivered upon receipt if
              delivered by hand, overnight courier service or facsimile, or five
              Business Days after dispatch if by certified mail.

       13.7.  Integration. This Agreement contains the entire agreement of the
              Parties. No promise, inducement, representation or agreement,
              other than as expressly set forth herein, has been made to or by
              the Parties hereto. All prior agreements and understandings
              related to the subject matter hereof, whether written or oral,
              including without limitation the LOI, are expressly superseded
              hereby and are of no further force or effect.

       13.8.  Binding Agreement. This Agreement shall be binding upon and inure
              to the benefit of PowerHouse and M-Systems, and their respective
              Associated Companies.

       13.9.  Publicity. Neither party shall issue any press release relating to
              this Agreement or the transactions contemplated hereby without
              prior notice to, consultation with, and the consent of the other
              party. Concurrently with the execution of this Agreement, the
              Parties shall issue a joint press release to be mutually agreed
              upon.

       13.10. Amendment. This Agreement cannot be altered, amended or modified
              in any respect, except by a writing duly signed by both Parties.

       13.11. No Strict Construction. The normal rule of construction to the
              effect that any ambiguities are to be resolved against the
              drafting Party shall not be employed in the interpretation of this
              Agreement. The headings contained in this Agreement are intended
              solely for ease of reference and shall be given no effect in the
              construction of interpretation of this Agreement.

       13.12. Execution. This Agreement may be executed in counterparts by the
              Parties, each of which shall be deemed an original, and which
              together shall constitute one and the same instrument, having the
              same force and effect as if a single original had been executed by
              all the Parties.

       13.13. Currency. All payments required under this Agreement shall be made
              in the currency of the United States of America.

       13.14. Jurisdiction. Any litigation arising out of or relating to this
              Agreement shall be conducted in the Superior Court of the State of
              California in and for San Mateo County or the United States
              District Court for the Northern District of California. Each of
              the parties consents to the exclusive jurisdiction of such courts
              and to venue in such courts.

       13.15. Export Restrictions. M-Systems will not export or re-export the
              Migo Products, any part thereof, or any process or service that is
              the direct product of the Migo Products (the foregoing
              collectively referred to as the "Restricted Components") to any
              country, person or entity subject to U.S. export restrictions.
              M-Systems specifically agrees not to export or re-export any of
              the Restricted Components (i) to any country to which the U.S. has
              embargoed or restricted the export of goods or services, which
              currently include, but are not necessarily limited to Cuba, Iran,
              Iraq, Libya, North Korea, Sudan and Syria, or to any national of
              any such country, wherever located, who intends to transmit or
              transport the Restricted Components back to such country; (ii) to
              any person or entity who you know or have reason to

                                                                         Page 15
<PAGE>

              know will utilize the Restricted Components in the design,
              development or production of nuclear, chemical or biological
              weapons; or (iii) to any person or entity who has been prohibited
              from participating in U.S. export transactions by any federal
              agency of the U.S. government. M-Systems warrants and represents
              that neither the U.S. Bureau of Export Administration nor any
              other U.S. federal agency has suspended, revoked or denied its
              export privileges.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
duly authorized representatives as of the Agreement Date.

M-Systems Flash Disk Pioneers Ltd.      PowerHouse Technologies Group, Inc.
By:__________________                   By:__________________
Its:_________________                   Its:_________________
Date:________________                   Date:________________

EXHIBITS

Exhibit A - M-Systems Technology
Exhibit B - PowerHouse Technology
Exhibit C - Product Development Plan
Exhibit D - License/Referral Fee Report
Exhibit E - Escrow Agreement
Exhibit F - Exclusivity Exceptions

                                                                         Page 16
<PAGE>

                        EXHIBIT A - M-SYSTEMS TECHNOLOGY

                        EXHIBIT B - POWERHOUSE TECHNOLOGY

--------------------------------------------------------------------------------
                                  TRADEMARKS
--------------------------------------------------------------------------------
Trademark         Reg. Date                                   Reg. No.
--------------------------------------------------------------------------------
MIGO              Filed on August 18, 2003                    Application No.
                                                              78/288,619
                                                              (applicant:
                                                              Forward
                                                              Solutions, Inc.)
--------------------------------------------------------------------------------
POCKETLOGIN       September 17, 2003                          78/219,213
                                                              (applicant:
                                                              First Person
                                                              Software, Inc.)
--------------------------------------------------------------------------------
                                    PATENTS
--------------------------------------------------------------------------------
Title             Date Issued                                 Patent No.
--------------------------------------------------------------------------------
System and        Filed May 8, 2003 by David Brett Levine     Serial No.
method for        and Christopher Jason Neumann               10/435,070
transferring
personalization
information
among computer
systems.
--------------------------------------------------------------------------------
                                  COPYRIGHTS
--------------------------------------------------------------------------------
None.
--------------------------------------------------------------------------------

                                                                       EXHIBIT B
                                                                         Page 1
<PAGE>

                      EXHIBIT C - PRODUCT DEVELOPMENT PLAN

                                     SEE MRD

                                                                       EXHIBIT C
                                                                          Page 1
<PAGE>

                     EXHIBIT D - LICENSE/REFERRAL FEE REPORT

                                                                       EXHIBIT D
                                                                          Page 1
<PAGE>

                          EXHIBIT E - ESCROW AGREEMENT

                                                                       EXHIBIT E
                                                                          Page 1
<PAGE>

                       EXHIBIT F - EXCLUSIVITY EXCEPTIONS

[*]

                                                                       EXHIBIT E
                                                                          Page 2

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