Document:

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                                                                   EXHIBIT 10.17

                            STOCK PURCHASE AGREEMENT

         This STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into
this 30th day of June, 2000, by and among LanguageWare.net (Company) Ltd., an
Israeli corporation (the "Company") and the investors listed on the signature
page to this Agreement (individually referred to as "Purchaser" and collectively
as the "Purchasers").

                                    RECITALS

         A. The Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States Securities and Exchange Commission the "SEC") under the Securities Act of
1933, as amended (the "Act").

         B. The Purchasers desire to purchase, upon the terms and conditions set
forth in this Agreement, a number of shares ("Shares") of the Company's Ordinary
Shares, nominal value NIS .01 per share (the "Common Stock").

         IN CONSIDERATION OF the mutual promises, representations, warranties
and covenants contained herein, the parties hereto agree as follows:

                     ARTICLE I. PURCHASE AND SALE OF SHARES

         Subject to the terms and conditions set forth in this Agreement, the
Purchasers will purchase Common Stock in the names and amounts as set forth on
Exhibit A hereto. The price per share of Common Stock shall 40 cents per share
($0.40) ("Purchase Price").

                               ARTICLE II. CLOSING

         Immediately upon the execution of this Agreement, or at such other time
as the parties may agree (the "Closing Date"), the Company shall deliver to
Purchasers certificates for the Shares being purchased by each Purchaser on the
Closing Date as set forth on Exhibit A, registered in the name of each such
Purchaser, and each Purchaser shall pay to the Company the respective Purchase
Price for the Shares as set forth on Exhibit A by wire transfer, certified check
or other method acceptable to the Company. The closing of the sale and purchase
of the Shares under this Agreement shall take place at the offices of the
Company at 102 South Tejon, Suite 320, Colorado Springs, Colorado.

                   ARTICLE III. REPRESENTATIONS OF THE COMPANY

         The following are representations, warranties and agreements made by
the Company as of the Closing Date.

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         3.1 Organization and Standing. The Company and each of its subsidiaries
is a corporation duly organized and validly existing under the laws of the
jurisdiction in which it is incorporated, and has full corporate power and
authority to conduct its business as presently conducted and as proposed to be
conducted by it and to enter into and perform this Agreement and to carry out
the transactions contemplated herein. The Company is duly qualified to do
business as a foreign corporation and is in good standing under the laws of the
State of Colorado and under the laws of any other state in which qualification
by the Company to do business is required and where failure to do so would have
a Material Adverse Effect. "Material Adverse Effect" means any material adverse
effect on (i) the Shares; (ii) the ability of the Company to perform its
obligations hereunder, or (iii) the business, operations, properties, prospects
or financial condition of the Company and its subsidiaries, taken as a whole.

         3.2 Issuance of Shares. The issuance, sale and delivery of the Shares
in accordance with this Agreement, has been duly authorized and reserved for
issuance, as the case may be, by all necessary corporate action on the part of
the Company, and the Shares when so issued, sold and delivered against payment
therefor in accordance with the provisions of this Agreement, will be duly and
validly issued, fully paid and nonassessable.

         3.3 Authority for Agreement. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all necessary
corporate action, including actions of the Board of Directors of the Company,
and this Agreement has been duly executed and delivered by the Company. This
Agreement constitutes a valid and binding obligation of the Company enforceable
in accordance with its terms, subject as to enforcement of remedies to
applicable bankruptcy, insolvency, reorganization or similar laws affecting
generally the enforcement of creditors' rights and subject to a court's
discretionary authority with respect to the granting of a decree ordering
specific performance or other equitable remedies. The execution of, and the
Company's performance of the transactions contemplated by, this Agreement and
compliance with its provisions by the Company will not violate any provision of
law and will not conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under the Company's
Memorandum of Association or Articles of Association ("Organizational
Documents"), or any indenture, lease, agreement or other instrument to which the
Company is a party or by which it or any of its properties is bound, or any
decree, judgment, order, statute, rule or regulation applicable to the Company
and will not constitute an event which with the lapse of time or notice by a
third party could result in any default under any of the foregoing or result in
the creation of any lien, charge or encumbrance upon the assets or properties of
the Company or upon its stock.

         3.4 Governmental Consents. Based on the representations made by the
Purchasers in Article IV of this Agreement, the offer and sale of the Shares to
the Purchasers will be in compliance with applicable federal and state
securities laws. All consents, approvals, orders or authorizations of, or
registrations, qualifications, designations, declarations or filings with, any
governmental authority required on the part of the Company in connection with
the execution and delivery of this Agreement, the offer, issue, sale and
delivery of the Shares, or the other transactions to be consummated at the
Closing, as contemplated by this Agreement have been, or will by the Closing be,
obtained.

         3.5 Litigation. Except as disclosed in SEC Documents (as defined
below), there is no action, suit, proceeding or investigation pending, or, to
the best of the Company's knowledge, any basis therefor or threat thereof,
against the Company, which questions the validity of this Agreement or the right
of the Company to enter into it, or which might result, either individually or
in the aggregate, in any material adverse change in the assets, condition
(financial or otherwise), business or prospects of the Company, nor is there any
litigation pending or, to the best of the Company's knowledge, any basis
therefor or threat thereof, against the Company by reason of the past employment
relationships of any of the Company's officers, directors, employees or
consultants,

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the proposed activities of the Company, or negotiations by the Company with
possible investors in the Company.

         3.6 Absence of Liabilities. To the knowledge of the Company, the
Company does not have any material liabilities of any type, whether absolute or
contingent, other than those reflected in the financial statements (the
"Financial Statements") included in the Company's most recent periodic reports
filed with the U.S. Securities and Exchange Commission (the "SEC") or
liabilities incurred in the ordinary course of business since the date of the
Financial Statements.

         3.7 Absence of Changes. Since the dates of the Financial Statements,
there has been no material adverse change in the condition, financial or
otherwise, net worth or operations of the Company, other than changes occurring
in the ordinary course of business.

         3.8 SEC Documents, Financial Statements. The Common Stock of the
Company is registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the Company has filed on a timely
basis, during the twelve calendar months and any portion of the month
immediately preceding the date hereof, all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act, including material filed pursuant to
Section 13(a) or 15(d), in addition to one or more registration statements and
amendments thereto heretofore filed by the Company with the SEC under the Act
(all of the foregoing including filings incorporated by reference therein being
referred to herein as the "SEC Documents"). The Company has not provided to the
Purchasers any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company but which has not
been so disclosed, other than with respect to the transactions contemplated by
this Agreement.

         As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Act or the Exchange Act as the
case may be and the rules and regulations of the SEC promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
SEC Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC or other applicable rules and regulations with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).

         3.9 Disclosures. As of the date of this Agreement, neither this
Agreement nor any report, other written statement or certificate delivered or to
be furnished to Purchasers in connection with the transactions contemplated by
this Agreement, when read together, contains or will contain any material
misstatement of fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein not misleading.

         3.10 Registration and Listing. For a period of five (5) years after the
Closing Date, the Company will cause its Common Stock to continue to be
registered under Sections 12(b) or 12(g) of the Exchange Act, will

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comply in all respects with its reporting and filing obligations under such
Exchange Act, will comply with all requirements related to any registration
statement filed pursuant to this Agreement and will not take any action or file
any document (whether or not permitted by the Act or the Exchange Act or the
rules thereunder) to terminate or suspend such registration or to terminate or
suspend its reporting and filing obligations under said Acts, except as
permitted herein. For a period of five (5) years after the Closing Date, the
Company will take all action within its power to continue the listing or trading
of its Common Stock on the Nasdaq Over-the-Counter Bulletin Board or on a
principal market including the New York Stock Exchange, American Stock Exchange,
Nasdaq NMS or Nasdaq SmallCap Market, and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
such principal market. The covenants set forth in this Section 3.10 shall not be
deemed to prohibit a merger, sale of all assets or other corporate
reorganization if the entity surviving or succeeding to the Company is bound by
this Agreement with respect to its securities issued in exchange for or in
replacement of the Common Stock or the consideration received for or in
replacement of the Common Stock is cash.

                  ARTICLE IV. REPRESENTATIONS OF THE PURCHASER

         Each Purchaser, severally and not jointly, represents and warrants to
the Company as follows:

         4.1 Investment. Each Purchaser is acquiring the Shares, for their own
account, for investment and not with a view to, or for sale in connection with,
any public distribution thereof and, except as contemplated by this Agreement,
each Purchasers has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof.

         4.2 Authority. Each Purchaser has full power and authority to enter
into and to perform this Agreement in accordance with its terms. No Purchaser
has been organized, reorganized or recapitalized specifically for the purpose of
investing in the Company.

         4.3 Experience. Each Purchaser has reviewed the representations
concerning the Company contained in this Agreement, and has had the opportunity
to make inquiry concerning the Company, its business and its personnel; each
Purchaser has received any and all written information which it has requested
and all questions and inquiries have been answered to each Purchaser's
satisfaction; and each Purchaser has sufficient business and financial
experience to be able to evaluate the merits and risks of an investment in the
Company.

         4.4 Accredited Investor. Each Purchaser is an "accredited investor"
within the definition set forth in Securities Act Rule 501 (a) and has executed
and delivered to the Company an "Accredited Investor Questionnaire" in the form
attached hereto as EXHIBIT B.

         4.5 Binding Effect. This Agreement has been duly executed and delivered
by each Purchaser, constitutes a valid and binding obligation of each Purchaser,
and is enforceable in accordance with its terms, subject as to enforcement of
remedies to applicable bankruptcy, insolvency, reorganization or similar laws
affecting generally the enforcement of creditors' rights and subject to a
court's discretionary authority with respect to the granting of a decree
ordering specific performance or other equitable remedies.

         4.6 Restricted Securities. Each Purchaser understands that (i) except
as provided herein, the Shares have not been and are not being registered under
the Securities Act or any state securities laws, and may not be transferred
unless (a) subsequently registered thereunder, or (b) an exemption from such
registration is available, or (c) a Purchaser shall have delivered to the
Company an opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that the Shares

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to be sold or transferred may be sold or transferred pursuant to an exemption
from such registration, or (d) sold pursuant to Rule 144 promulgated under the
Securities Act (or a successor rule) ("Rule 144") or (e) sold or transferred to
an affiliate of a Purchaser; (ii) any sale of such Shares made in reliance on
Rule 144 may be made only in accordance with the terms of said Rule and further,
if said Rule is not applicable, any resale of such Shares under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Shares under the Securities Act
or any state securities laws or to comply with the terms and conditions of any
exemption thereunder (in each case, other than pursuant to this Agreement).

         4.7 Legends. Each Purchaser understands that until such time as the
Shares have been registered under the Securities Act as contemplated herein, or
otherwise may be sold by a Purchaser pursuant to Rule 144, the certificates for
the Shares shall bear a restrictive legend in substantially the following form:

                  The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended or the
                  securities laws of any state of the United States. The
                  securities represented hereby may not be offered or sold, in
                  the absence of an effective registration statement for the
                  securities under applicable securities laws or unless offered,
                  sold or transferred pursuant to an available exemption from
                  the registration requirements of those laws.

         The Company shall promptly (within three (3) business days) instruct
its stock transfer agent to issue a certificate without such legend to the
holder of any Shares if (a) the sale of such Shares are registered under the
Securities Act, or (b) such holder provides the Company with an opinion of
counsel, in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or transfer of such
Shares may be made without registration under the Securities Act or (c) such
holder provides the Company with reasonable assurances that such Shares can be
sold pursuant to Rule 144.

         4.8 Solicitation. Each Purchaser acknowledges that the Shares are not
being purchased as a result of any form of general solicitation or general
advertising including advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or broadcast over radio,
or television or any seminar or meeting whose attendees have been invited by
general solicitation or general advertising.

              ARTICLE V. CONDITIONS TO THE OBLIGATIONS OF PURCHASER

         The obligation of Purchasers to purchase the Shares on Closing Date is
subject to the fulfillment, or the waiver by Purchasers, of the following
conditions on or before each of the Closing Date:

         5.1 Accuracy of Representations and Warranties. Each representation and
warranty contained in Article III shall be true on and as of each of the Closing
Date with the same effect as though such representation and warranty had been
made on and as of that date.

         5.2 Performance. The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by the Company prior to or on the Closing Date.

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         5.3 Compliance Certificate of the Company. The Company shall have
delivered to the Purchasers certificates, executed by the President of the
Company, dated on the Closing Date, certifying to the fulfillment of the
conditions specified in Sections 5.1 and 5.2 of this Agreement.

         5.4 Regulatory Matters. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

         5.5 Consents. The Company shall have received all consents,
authorizations, approvals and orders necessary to enter into this Agreement and
consummate the transactions contemplated hereby.

         5.6 Other Matters. All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to Purchasers and Purchasers shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.

            ARTICLE VI. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

         The obligations of the Company to sell the Shares at the Closing are
subject to fulfillment, on or before the Closing Date, of each of the following
conditions:

         6.1 Accuracy of Representations and Warranties. The representations and
warranties of each of the Purchasers contained in Article IV shall be true on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of that date.

         6.2 Investment. Purchasers shall have tendered, in the manner specified
in Article II hereof, the Purchase Price for the Shares on the Closing Date.

         6.3 Regulatory Matters. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

         6.4 Consents. The Company shall have received all consents,
authorizations, approvals and orders necessary to enter into this Agreement and
consummate the transactions contemplated hereby.

         6.5 Minimum Investment. The Purchasers shall have committed hereunder
to purchase, in the aggregate, a minimum of $3,000,000 worth of Common Stock at
the Purchase Price.

              ARTICLE VII. COVENANTS OF THE COMPANY AND PURCHASERS

         7.1 Registration of Shares. The Company is in the process of
undertaking procedures to redomesticate its current domicile as an Israeli
corporation to a new domicile as a Delaware, United States corporation
("Redomestication"). The target date for completing the Redomestication is June
2000. As part of the Redomestication, the Shares shall be registered under the
Securities Act of 1933, as amended (the "Act") pursuant to a registration
statement on Form S-4 to be filed with the SEC ("Registration Statement").
Company will use its best commercial efforts to file the Registration Statement
with the SEC within thirty (30) days

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following the completion of the fiscal year 1999 audits of the Company and its
subsidiaries. The Company will include the Shares purchased hereunder in the
Registration Statement and will use its best commercial efforts to cause the
Registration Statement to be effective under the Act as soon as is reasonably
practicable after filing. The Company represents and warrants that except for
any "affiliate" restrictions as may be applicable to the Purchaser or the Shares
pursuant to Rule 144 promulgated under the Act, the shares issued to Purchaser
under the Redomestication in exchange for the Shares purchased hereunder and
registered on the Registration Statement will be freely tradable by the
Purchaser.

         7.2 Demand Registration. In the event the Registration Statement is not
declared effective by the six (6) month anniversary of the Closing Date
("Registration Deadline") or does not include all Shares purchased hereunder
("Registrable Securities"), a holder of Registrable Securities shall have the
right to require by notice in writing that the Company register all or any part
of the Registrable Securities held by such holder (a "Demand Registration") and
the Company shall thereupon effect such registration in accordance herewith
(which may include adding such shares to an existing shelf registration). The
parties agree that if the holder of Registrable Securities demands registration
of less than all of the Registrable Securities, the Company, at its option, may
nevertheless file a registration statement covering all of the Registrable
Securities. If such registration statement is declared effective with respect to
all Registrable Securities and the Company is in compliance with its obligations
under this Agreement, the demand registration rights granted pursuant to this
Section shall cease. If such registration statement is not declared effective
with respect to all Registrable Securities or if the Company is not in
compliance with such obligations, the demand registration rights described
herein shall remain in effect. The Company shall not be obligated to effect a
Demand Registration as described above: (i) if all of the Registrable Securities
held by the holder of Registrable Securities which are demanded to be covered by
the Demand Registration are, at the time of such demand, included in an
effective registration statement and the Company is in compliance with its
obligations under this Agreement; (ii) if all of the Registrable Securities may
be sold under Rule 144(k) of the Act and the Company's transfer agent has
accepted an instruction from the Company to such effect; or (iii) at any time
after two (2) years from the Closing Date.

         7.3 Obligations of the Company. In connection with any registration of
the Registrable Securities, the Company shall have the following obligations:

                  (a) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by the Registration
Statement until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in the Registration Statement.

                  (b) The Company shall furnish to each Purchaser whose
Registrable Securities are included in the Registration Statement and its legal
counsel (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one copy of the Registration Statement
and any amendment thereto, each preliminary prospectus and prospectus and each
amendment or supplement thereto and each letter written by or on behalf of the
Company to the SEC or the staff of the SEC (including, without limitation, any
request to accelerate the effectiveness of any Registration Statement or
amendment thereto), and each item of correspondence from the SEC or the staff of
the SEC, in each case relating to such Registration Statement (other than any
portion, if any, thereof which contains information for which the Company has
sought confidential treatment), (ii) on the date of effectiveness of the
Registration Statement or any amendment thereto, a notice stating that the
Registration Statement or amendment has been declared effective, and (iii) such
number of copies

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of a prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Purchaser may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Purchaser.

                  (c) The Company shall, at its expense, use its best efforts to
(i) register and qualify the Registrable Securities covered by the Registration
Statement under such other securities or "blue sky" laws of such jurisdictions
in the United States as each Purchaser who holds Registrable Securities being
offered reasonably requests, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (a) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 7.2, (b) subject itself to general taxation in any such
jurisdiction, (c) file a general consent to service of process in any such
jurisdiction, (d) provide any undertakings that cause the Company undue expense
or burden, or (e) make any change in its organizational documents, which in each
case the Board of Directors of the Company determines to be contrary to the best
interests of the Company and its stockholders.

                  (d) In the event the Purchasers who hold a majority in
interest of the Registrable Securities being offered in an offering select
underwriters for the offering, the Company shall enter into and perform its
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering.

                  (e) As promptly as practicable after becoming aware of such
event, the Company shall notify each Purchaser of the happening of any event, of
which the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and use its best
efforts promptly to prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Purchaser as such Purchaser
may reasonably request.

                  (f) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued to obtain the withdrawal
of such order at the earliest practicable moment (including in each case by
amending or supplementing such Registration Statement) and to notify each
Purchaser who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of such order
and the resolution thereof (and if such Registration Statement is supplemented
or amended, deliver such number of copies of such supplement or amendment to
each Purchaser as such Purchaser may reasonably request).

                  (g) The Company shall make available for inspection by (i) any
Purchaser, (ii) any underwriter participating in any disposition pursuant to the
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Purchasers, and (iv) one firm of attorneys
retained by all such underwriters (collectively, the "Inspectors") all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers, directors and
employees to supply all information which any Inspector may reasonably request
for purposes of such due diligence; provided, however, that each Inspector shall
hold in confidence and shall not

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make any disclosure (except to a Purchaser) of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (b) the release of such Records is ordered pursuant to a
subpoena or other order from a court or government body of competent
jurisdiction, or (c) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such Inspector
shall have entered into confidentiality agreements (in form and substance
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 7.3(g). Each Purchaser agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein shall be deemed to limit
the Purchasers' ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations.

                  (h) At the request of any Purchaser, the Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary in order to change the plan
of distribution set forth in such Registration Statement.

                  (i) The Company shall comply with all applicable laws related
to a Registration Statement and offering and sale of securities and all
applicable rules and regulations of governmental authorities in connection
therewith (including without limitation the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the SEC.)

                  (k) The Company shall take all such other actions as any
Purchaser or the underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities.

         7.3 Reporting Status. So long as the Purchasers beneficially own any of
the Shares, the Company shall timely file all reports required to be filed with
the SEC pursuant to the Exchange Act, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination.

         7.4 Corporate Existence. So long as the Purchasers beneficially own any
of the Shares, the Company shall maintain its corporate existence, and in the
event of a merger, consolidation or sale of all or substantially all of the
Company's assets, the Corporation shall ensure that the surviving or successor
entity in such transaction (i) assumes the Company's obligations hereunder and
the agreements and instruments entered into in connection herewith and (ii) is a
publicly traded corporation whose common stock is listed for trading on the
NASDAQ, NYSE or AMEX.

         7.5 Lock-Up Period. Each of the Purchasers agrees that for a period of
three (3) months beginning on the Closing Date, no Purchaser will transfer,
conduct any offering or sale or enter into an agreement to transfer or sell any
of the Shares purchased on the Closing Date without the prior written consent of
the Company.

<PAGE>   10

                          ARTICLE VIII. INDEMNIFICATION

         8.1 Indemnification by the Company. Subject to the conditions set forth
below, in connection with any registration of Registrable Securities pursuant to
Article 7 above, the Company agrees to indemnify and hold harmless Purchasers,
each person, if any, who controls any Purchaser within the meaning of Section 15
of the Securities Act and Purchasers' officers, directors and agents, if any, as
follows:

         (a)      Against any and all loss, claim, damage and expense whatsoever
                  arising out of or based upon (including but not limited to,
                  any and all expense whatsoever reasonably incurred in
                  investigating, preparing or defending any litigation,
                  commenced or threatened, or any claim whatsoever based upon)
                  any untrue or alleged material fact contained in any
                  preliminary prospectus (if used prior to the effective date of
                  the Registration Statement), the Registration Statement or the
                  prospectus (as from time to time amended and supplemented), or
                  in any application or other document executed by the Company
                  or based upon written information furnished by the Company
                  filed in any jurisdiction in order to qualify the Company's
                  securities under the securities laws thereof; or the omission
                  or alleged omission therefrom of a material fact required to
                  be stated therein or necessary to make the statements therein
                  not misleading; or any other violation of applicable federal
                  or state statutory or regulatory requirements or limitations
                  relating to action or inaction by the Company in the course of
                  preparing, filing, or implementing the Registration Statement;
                  provided however, that the indemnity contained in this
                  subsection (a) shall not apply to a holder of Registrable
                  Securities with respect to any loss, claim, damage, liability
                  or action arising out of or based upon any untrue or alleged
                  untrue statement or omission made in reliance upon and in
                  conformity with any information furnished in writing to the
                  Company by or on behalf of such holder expressly for use in
                  connection therewith or arising out of any action or inaction
                  of any such holder;

         (b)      Subject to the provision contained in subsection (a) above,
                  against any and all loss, liability, claim, damage and expense
                  whatsoever to the extent of the aggregate amount paid in
                  settlement of any litigation, commenced or threatened or of
                  any claim whatsoever based upon any such untrue statement or
                  omission or any such alleged untrue statement or omission
                  (including but not limited to, any and all expense whatsoever
                  reasonably incurred in investigating, preparing or defending
                  against any such litigation or claim) if such settlement is
                  effected with the written consent of the Company.

         (c)      The Company shall be entitled to participate at its own
                  expense in the defense of any suit brought to enforce any such
                  claim, but if the Company elects to assume the defense, such
                  defense shall be conducted by counsel chosen by it, provided
                  that such counsel is reasonably satisfactory to the Purchasers
                  and any other holders of Registrable Securities or controlling
                  persons who are defendants in any suit so brought. In the
                  event the Company elects to assume the defense of any such
                  suit and retain such counsel, such holders or controlling
                  persons shall, after the date they are notified of such
                  election, bear the fees and expenses of any counsel thereafter
                  retained by them as well as any other expenses thereafter
                  incurred by them in connection with the defense thereof
                  unless, in the reasonable opinion of such holders or
                  controlling persons, separate representation is advisable
                  because of conflict in the interests of the parties, in which
                  case the Company shall continue to pay the fees of such
                  counsel.

         8.2 Indemnification of Company. Each Purchaser, severally and not
jointly, agrees to indemnify and hold harmless the Company and its officers,
directors and agents against any and all such losses, liabilities, claims,
damages and expenses arising out of information furnished in writing to the
Company by or on behalf of

<PAGE>   11

such Purchaser expressly for use in connection with any preliminary prospectus,
the Registration Statement or prospectus or any amendment or supplement
thereof.. In case any action shall be brought against the Company or any other
person so indemnified, in respect of which indemnity may be sought against a
Purchaser, the Purchasers shall have the rights and duties given to the Company,
and each other person so indemnified shall have the rights and duties given to
Purchasers by the provisions of Section 8(c). Any indemnification under this
Section 8.2 shall be limited to net proceeds received by the Purchaser for
shares sold under the Registration Statement.

                            ARTICLE IX MISCELLANEOUS

         9.1 Survival of Representations, Warranties and Covenants. All
agreements, representations, warranties and covenants contained herein shall
survive the execution and delivery of this Agreement and the closing of the
transactions contemplated hereby.

         9.2 Expenses. Each party shall pay its own expenses in connection with
the investment contemplated herein.

         9.3 Notices. All notices, requests, consents and other communications
when deemed given under this Agreement shall be in writing and shall be
delivered by hand, which shall include delivery by express courier service, or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid, and notice shall be deemed given when actually received by the
intended recipient:

         If to the Company:

                           LangaugeWare.net (Company) Ltd.
                           102 South Tejon, Suite 320
                           Colorado Springs, CO 80903
                           Attention: President

         With a copy to:

                           Herbert H. Davis III
                           Rothgerber, Johnson & Lyons LLP
                           1200 17th Street, Suite 3000
                           Denver, Colorado 80202-5839

         If to Purchasers:

or at such other address or addresses as may have been furnished in writing
pursuant to the provision of this Section 9.3.

<PAGE>   12

         9.4 Entire Agreement. This Agreement together with the other agreements
referred to herein embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter.

         9.5 Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) with the written consent of
the Company as to any provision that is for the benefit of the Company and by
the Purchasers.

         9.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         9.7 Headings. The headings of the sections, articles and paragraphs of
this Agreement have been added for convenience only and shall not be deemed to
be a part of this Agreement.

         9.8 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision.

         9.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.

         9.10 Successors and Assigns. The provisions of this Agreement shall be
binding upon, and inure to the benefit of, the respective successors, assigns,
heirs, executors and administrators of the parties hereto.

         9.11 Specific Enforcement, Consent to Jurisdiction. The Company and the
Purchasers acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which either of them may be entitled by law or equity.

         The Company and the Purchasers each (i) hereby irrevocably submits to
the jurisdiction of the United States District Court and other courts of the
United States sitting in Colorado for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement and (ii) hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company and the Purchasers each
consent to process being served in any such suit action or proceeding by mailing
a copy thereof to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.

<PAGE>   13

IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the day
and year first above written.

THE COMPANY:

LANGUAGEWARE.NET (COMPANY) LTD.

By:      /s/ Todd Oseth
   ------------------------------------------------
Name:    Todd Oseth
     ------------------------------------------
Title:   President, CEO
      -----------------------------------------

THE PURCHASERS:

By:      /s/ Thomas Ng
   ------------------------------------------------
Name:    Thomas Ng
     ------------------------------------------
Title:   Director, Technology Fund II Pte. Ltd.
      -----------------------------------------

<PAGE>   14

                                    EXHIBIT A

<TABLE>
<CAPTION>
PURCHASER                     SHARES                    PURCHASE PRICE

<S>                           <C>                       <C>
Technology Fund II Pte Ltd    2,500,000                 US $1,000,000

TOTALS                        2,500,000                 US $1,000,000
</TABLE>

<PAGE>   15

                                    EXHIBIT B

                        ACCREDITED INVESTOR QUESTIONNAIRE

         The undersigned, as a purchaser of Ordinary Shares, nominal value NIS
 .01 per share (the "Securities") of LanguageWare.net (Company) Ltd., an Israeli
corporation (the "Company"), has represented that the undersigned in an
"Accredited investor" as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933, as amended (the "U.S. Securities Act"). The
undersigned has indicated below the categories which it, he or she satisfied, or
if it, he or she is purchasing for the account of another accredited investor,
which such accredited investor satisfies.

         The undersigned understands that the Company is relying on this
information in determining to sell securities to the undersigned in a manner
exempt from the registration requirements of the U.S. Securities Act and
applicable state securities laws.

ACCREDITED INVESTOR STATUS

         The undersigned represents and warrants that it, he or she is (CIRCLE
EACH APPLICABLE ITEM):

         (1)      A bank, as defined in Section 3(a)(2) of the U.S. Securities
                  Act, or savings and loan association or other institution as
                  defined in Section 3(a)(5)(A) of the U.S. Securities Act,
                  whether acting in its individual or fiduciary capacity.

         (2)      A broker or dealer registered pursuant to Section 15 of the
                  United States Securities Exchange Act of 1934, as amended.

         (3)      An insurance company (as defined in Section 2(13) of the U.S.
                  Securities Act).

         (4)      An investment company registered under the United States
                  Investment Company Act of 1940 (the "1940 Act").

         (5)      A business development company (as defined in Section 2(a)(48)
                  of the 1940 Act).

         (6)      A Small Business Investment Company licensed by the U.S. Small
                  Business Administration under Section 301(c) or (d) of the
                  United States Small Business Investment Act of 1958.

         (7)      A plan established and maintained by a state, its political
                  subdivisions, or any agency or instrumentality of a state or
                  its political subdivisions, for the benefit of its employees,
                  if such plan has total assets in excess of U.S. $5,000,000.

         (8)      An employee benefit plan within the meaning of the United
                  States Employee Retirement Income Security Act of 1974
                  ("ERISA") (1) whose investment decision is made by a plan
                  fiduciary as defined in Section 3(21) of ERISA, which is
                  either a bank, savings and loan association, insurance company
                  or registered investment advisor, or (2) having total assets
                  in excess of U.S. $5,000,000, or (3) if a self-directed plan,
                  with investment decisions made solely by persons that are
                  accredited investors.

<PAGE>   16

         (9)      A private business development company (as defined in Section
                  202(a)(22) of the 1940 Act.

         (10)     An organization described in Section 501(c)(3) of the Internal
                  Revenue Code, corporation, Massachusetts or similar business
                  trust, or partnership, not formed for the specific purpose of
                  acquiring the securities offered, having total assets in
                  excess of U.S. $5,000,000.

         (11)     A director or executive officer of the Company.

         (12)     A natural person with individual net worth, or joint net worth
                  with his or her spouse, at the time of purchase in excess of
                  U.S. $1,000,000.

         (13)     A natural person with an individual income in excess of U.S.
                  $200,000 in each of the last two years or joint income with
                  his or her spouse in excess of U.S. $300,000 in each of those
                  years, and who reasonably expects to reach the same income
                  level in the current year.

         (14)     A trust with total assets in excess of U.S. $5,000,000 not
                  formed for the specific purpose of acquiring the securities
                  offered, whose purchase is directed by a sophisticated person
                  as described in Rule 506(b)(2)(ii) of the U.S. Securities Act.

         (15)     An entity in which all of the equity owners are accredited
                  investors.

         As used in this questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the above
purpose, the principal residence of the investor must be valued at cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, an investor should add to adjusted gross income any amount attributable
to tax exempt income received, losses claimed as a limited partner in any
limited partnership, deductions claimed for depletion, contributions to an IRA
or Keogh retirement plan, alimony payments, and any amount by which income from
long-term capital gains has been reduced in arriving at adjusted gross income.

<PAGE>   17

         IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as
of the ______ day of March, 2000.

If a Corporation, Partnership or Other Entity:    If an Individual:

                                                  ------------------------------
Name of Entity                                    Signature

                                                  ------------------------------
Type of Entity                                    Printed or Typed Name

                                                  ------------------------------
Signature of Person Signing                       Social Security or Taxpayer ID
                                                  Number<PAGE>   1
                                                                   EXHIBIT 10.18

THIS CONVERTIBLE NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THE
SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR ANY SUCH OFFER, SALE OR TRANSFER IS MADE PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

                       SECURED CONVERTIBLE PROMISSORY NOTE

September 22, 2000                                                 $3,000,000.00

         FOR VALUE RECEIVED, LANGUAGEWARE.NET (Company) LTD., an Israeli
corporation (hereinafter called the "Borrower" or "Company") hereby promises to
pay to the order Technology Fund II Pte Ltd., a company organized under the laws
of Singapore (the "Lender") the sum of THREE MILLION and no/100 dollars
($3,000,000.00) or so much thereof as may be advanced pursuant to paragraph 1 of
this Promissory Note ("Note"), on March 22, 2001 (the "Maturity Date"), and to
pay interest on the unpaid principal balance hereof at the prime rate of
interest as determined by the Wall Street Journal on the date hereof (the "Issue
Date") plus two hundred (200) basis points until the same becomes due and
payable whether at maturity or upon acceleration or otherwise. Interest on any
outstanding principal balance shall commence accruing on the Issue Date and, to
the extent not converted in accordance with the provisions of paragraph 3 below,
shall be payable on the Maturity Date. All payments of interest (to the extent
not converted in accordance with the terms hereof) shall be made in lawful money
of the United States of America. All payments shall be made at such address as
the Lender shall hereafter give to the Borrower by written notice made in
accordance with the provisions of this Note.

         1. Disbursements. Disbursements of principal shall be made from time to
time as requested by the Borrower. Borrower shall give Lender written notice of
any requested disbursements under this Note ("Disbursement Request"). Such
Disbursement Request shall include the amount of the requested disbursement, the
required date of receipt of the disbursement (which shall not be less than three
(3) business days from the date of the Disbursement Request) and wire transfer
instructions for receipt of such disbursement. Lender shall not be required to
disburse more than $500,000 per month unless otherwise agreed to by Lender.
Borrower shall have no obligation to request disbursement of any principal
hereunder.

         Upon determination by Lender that Borrower has met all requirements
under this Agreement, Lender shall disburse to the Borrower the amount set forth
in the Disbursement Request via wire transfer of immediately available funds
within the time set forth in the applicable Disbursement Request.

         2. Prepayment Borrower shall have no right to prepay the outstanding
principal on this Note unless such prepayment is approved by Lender in its
absolute and sole discretion.

         3. Conversion. At any time after the Issue Date, if the principal
amount of this Note has not been paid in full, Lender shall have the right to
convert all or any portion of the outstanding principal amount of this Note and

<PAGE>   2

any accrued but unpaid interest on this Note into ordinary shares of the
Borrower, par value NIS 0.01 ("Common Stock"). Lender may exercise its
conversion right by delivering to the Borrower a written notice stating that
Lender elects to convert into Common Stock all or a portion of the principal of
and interest on the Note as provided herein. Conversion shall be effective as of
the close of business on the date of delivery of such notice. As promptly as
practicable thereafter, the Borrower shall issue and deliver to Lender a
certificate for the shares of Common Stock issuable upon such conversion. Any
person in whose name the certificate for Common Stock is to be issued shall be
considered to have become a Lender of record of such Common Stock as of the
close of business on the date of the conversion ("Conversion Date"). The
Borrower shall not be required to issue fractional shares of Common Stock on the
conversion of the Note. If any fraction of a share would be issuable on the
conversion of the Note, such fractional share shall be disregarded and the
number of shares of Common Stock issuable upon conversion shall be the next
higher whole number of shares.

         4. Conversion Price. The number of shares of Common Stock issuable upon
conversion of the Note pursuant to paragraph 3 hereof shall be the number of
shares equal in value to the amount of the principal and interest to be
converted. The per share value of the Common Stock ("Conversion Price") shall be
the lesser of (a) $0.20; or (b) the lowest price per share received by the
Borrower between the Issue Date and the Maturity Date from the sale of its
Common Stock in an aggregate amount of not less than $6,000,000 to third parties
not related to the Lender ("Next Financing").

         5. Warrants. Borrower will issue to Lender warrants to purchase a
number of shares of Common Stock equal to one hundred percent (100%) of the
number of shares issuable to Lender upon conversion of any outstanding principal
drawn by Borrower pursuant to paragraph 1 and any accrued but unpaid interest on
such principal converted by Lender hereunder. The exercise price of the warrants
shall be the lesser of (a) $0.20; or (b) the price per share received by the
Borrower in the Next Financing. Such warrants shall be issued upon request by
Lender, will be exercisable upon issuance and will expire December 31, 2001. The
warrants issuable hereunder for amounts of principal drawn by Borrower shall be
granted irrespective of whether such outstanding principal is converted, repaid
or prepaid. Warrants issuable hereunder for accrued but unpaid interest on any
principal drawn by Borrower shall only be issued upon conversion of such
interest by Lender.

         6. Merger or Acquisition. In the event of a merger or acquisition of
the Company or a sale of all or substantially all of the Company's assets on or
before the Maturity Date, Lender shall have the option of (i) converting the
outstanding principal and accrued but unpaid interest into Common Stock of the
Company at the lesser of (x) $0.20 per share or (y) or the per-share merger,
acquisition or sales price or (ii) having the outstanding principal and all
accrued but unpaid interest fully repaid upon the closing of the merger,
acquisition or sale.

         In the event of a merger or acquisition of the Company or a sale of all
or substantially all of the Company's assets on or before the Maturity Date, the
exercise price of any unexercised warrants shall be the lesser of (i) $0.20 per
share or (ii) or the per-share merger, acquisition or sales price.

         7. Reservation of Shares. On the Issue Date, the Borrower shall have
authorized and reserved and shall thereafter keep available for issuance from
its authorized but unissued shares of Common Stock not less than 30,000,000
shares of Common Stock solely for the purpose of issuance upon conversion of
this Note and any warrants to be issued hereunder. Such number of authorized but
unissued shares of Common Stock so reserved shall not be decreased, except in
the case of reverse stock splits and similar transactions.

            8. REGISTRATION RIGHTS. WHENEVER THE BORROWER PROPOSES TO FILE A
REGISTRATION STATEMENT WITH THE UNITED STATES SECURITIES EXCHANGE COMMISSION
INVOLVING AN OFFERING OF BORROWER'S COMMON STOCK

<PAGE>   3

BY BORROWER OR ANY SHAREHOLDERS OF BORROWER, BORROWER WILL, PRIOR TO SUCH
FILING, GIVE WRITTEN NOTICE TO ALL HOLDERS OF THE SHARES OF COMMON STOCK ISSUED
OR ISSUABLE UPON CONVERSION OF THIS NOTE AND THE SHARES UNDERLYING THE WARRANTS
GRANTED HEREIN (COLLECTIVELY, THE "CONVERSION SHARES") OF ITS INTENTION TO DO
SO. UPON THE WRITTEN REQUEST OF THE HOLDER OF THIS NOTE OR THE CONVERSION
SHARES, GIVEN WITHIN 20 DAYS AFTER THE BORROWER PROVIDES SUCH NOTICE, THE
BORROWER SHALL USE ITS BEST EFFORTS TO CAUSE ALL CONVERSION SHARES TO BE
INCLUDED IN SUCH REGISTRATION STATEMENT. SO LONG AS LENDER IS AN "AFFILIATE" OF
THE COMPANY, LENDER SHALL AT ANY TIME AFTER SIX (6) MONTHS AFTER THE DATE OF
THIS NOTE HAVE THE RIGHT TO DEMAND THE COMPANY TO REGISTER ALL OF THE SHARES
ISSUED UPON CONVERSION OF THE NOTE AND SHARES UNDERLYING THE WARRANTS ON A SEC
FORM S-3 REGISTRATION STATEMENT, AND IF THE COMPANY IS NOT ELIGIBLE TO USE FORM
S-3, SUCH OTHER FORM AS MAY BE ACCEPTABLE TO THE LENDER.

         9. Stock Splits, Stock Dividends, Etc. If at any time on or after the
Issue, the number of outstanding shares of Common Stock is increased by a stock
split, stock dividend, combination, reclassification or other similar event, the
Conversion Price shall be proportionately reduced, or if the number of
outstanding shares of Common Stock is decreased by a reverse stock split,
combination or reclassification of shares, or other similar event, the
Conversion Price shall be proportionately increased. In such event, the Borrower
shall notify the Borrower's transfer agent of such change on or before the
effective date thereof.

         10. Restrictions on Shares. The shares of Common Stock issuable upon
conversion of this Note and any warrants issued hereunder may not be sold or
transferred unless (i) they first shall have been registered under the
Securities Act and applicable state securities laws, (ii) the Borrower shall
have been furnished with an opinion of legal counsel (in form, substance and
scope reasonably satisfactory to the Borrower) to the effect that such sale or
transfer is exempt from the registration requirements of the Securities Act or
(iii) they are sold pursuant to Rule 144 under the Securities Act. Each
certificate for shares of Common Stock issuable upon conversion of this Note or
any warrants issued hereunder that have not been so registered and that have not
been sold pursuant to an exemption that permits removal of the legend, shall
bear a legend substantially in the following form, as appropriate:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN
         ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN
         THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL
         IN FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE BORROWER
         THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD
         PURSUANT TO RULE 144 UNDER SAID ACT. ANY SUCH SALE, ASSIGNMENT OR
         TRANSFER MUST ALSO COMPLY WITH APPLICABLE STATE SECURITIES LAWS.

         11. Events of Default. If any of the following events of default (each,
an "Event of Default") shall occur:

              a. the Borrower fails (i) to pay the principal hereof when due,
whether at maturity, upon acceleration or otherwise or (ii) to pay any
installment of interest hereon when due and such failure continues for a period
of five (5) business days after the due date thereof,

<PAGE>   4

              b. the Borrower provides notice to the Lender, including by way of
public announcement, at any time, of its intention not to issue shares of Common
Stock to the Lender upon conversion in accordance with the terms of the Notes,

              c. the Borrower shall:

                  (i) sell, convey or dispose of all or substantially all of its
assets; or

                  (ii) merge, consolidate or engage in any other business
combination with any other entity (other than pursuant to a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation of
the Borrower); or

              d. the Borrower or any subsidiary of the Borrower shall make an
assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed; or

              e. bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower;

then, upon the occurrence and during the continuation of any Event of Default,
all outstanding principal amount of this Note and accrued and unpaid interest
thereon, together with all other ancillary amounts payable hereunder shall
immediately become due and payable, all without demand, presentment or notice,
all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses of collection, and the Lender shall
be entitled to exercise all other rights and remedies available at law or in
equity.

         12. Representations and Warranties of Borrower. The Borrower hereby
represents and warrants to the Lender as follows, subject to its disclosures in
its most recent Forms 10-K and 10-Q.

              a. Legal Status. The Borrower is a corporation, duly incorporated
and validly existing under Israeli Law, and has the power and authority to own
its property, to conduct its business as currently conducted and to consummate
the transactions contemplated in this Note.

              b. Power and Authority The Borrower has taken all necessary action
to authorize the execution of this Note to which it is a party, the performance
of its obligations hereunder and thereunder and the consummation. of the
transactions contemplated herein and therein. All governmental and regulatory
authorizations and consents of any kind necessary to authorize the Loans or
required for the validity or enforceability of this Note have been obtained or
performed and are valid and in full force and effect.

              c. Validity. This Note has been duly executed by the Borrower and
constitute legal, valid and binding obligations of the Borrower enforceable
against it in accordance with its terms.

              d. No Defaults. No event has occurred and is continuing that
constitutes or would constitute an Event of Default hereunder.

              e. Business and Management. The Company shall in good faith
implement the new business plan approved by the Board of Directors on September
11, 2000. A failure to do so or any change or adjustment by the Company of any
senior management personnel without

<PAGE>   5

the prior written consent of the Lender shall each constitute an event of
default under the Note, if not cured within ten (10) business days of notice of
such default by Lender. The Company shall use its best commercial efforts to cap
its operating expenses to no more than $600K per month for the first two months
and no more than $500K per month thereafter.

              f. Additional Debt. Unless agreed upon by Lender, Borrower shall
not incur any indebtedness in addition to the amounts available under this Note
unless such additional indebtedness is expressly subordinated to this Note in
all respects.

              g. Repetition of Representations and Warranties. Each of the
representations and warranties set forth in this paragraph 11 shall be deemed to
be repeated at all times during the term of this Note.

         13. Application of Payments. All payments received by the Lender from
the Borrower shall, regardless of any appropriation of all or part of that
amount by the Borrower be applied, first, in or towards payment of any interest
(including late payment interest) then due and payable hereunder, second, to
payment of any principal then due and payable hereunder and third, in or towards
payment of arty other sum then due and payable hereunder.

         14. Costs of Collection. If this Note is placed in the hands of an
attorney for collection through the institution of a judicial proceeding, and
Lender is successful in such proceeding, then Maker agrees to pay, in addition
to all other amounts owing hereunder, the reasonable attorneys' fees and
collection costs of Lender arising specifically out of the collection of this
Note.

         15. Grant of Security Interest. To secure the due payment of this Note
and performance of Borrower's obligations, Borrower hereby assigns as collateral
security, pledges, hypothecates, transfers and sets over to Lender and grants to
Lender a lien on and security interest in all assets in which Borrower has a
present or future interest, now or hereafter existing or acquired, and wherever
located, tangible or intangible, including but not limited to all intellectual
property of the Borrower. Borrower agrees to execute all such documents as may
reasonably be requested by Lender in order to perfect the security interests
granted herein.

         16. Notices. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier and shall be
deemed to have been given upon receipt (which shall include telephone line
facsimile transmission). The addresses for such communications shall be:

If to the Borrower:
                       LanguageWare.net (Company) Ltd.
                       102 South Tejon, Suite 320
                       Colorado Springs, CO 80903
                       Attn: Tom Foster, CFO

If to the Lender:
                       Technology Fund II Pte Ltd.
                       9 Scotts Road,  #06-01 Pacific Plaza
                       Singapore 228210
                       Attn: Thomas Ng

<PAGE>   6

         17. Remedies and Waivers. No failure or delay on the part of the Lender
in exercising any right hereunder shall operate as a waiver of, or impair, any
such tight. No single or partial exercise of any such right shall preclude any
other or further exercise thereof or the exercise of arty other right. No waiver
of any such right shall be effective unless given in writing. No waiver of any
such right shall be deemed a waiver of any other right hereunder.

         18. Assignability. This Note shall be binding upon and inure to the
benefit of the Borrower and the Lender and their respective successors and
assigns; provided, however, that the neither the Borrower nor Lender shall
assign any of its rights or obligations under this Note without the prior
written consent of the other party, such consent not to be unreasonably
withheld.

<PAGE>   7

         IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its
name by its duly authorized officer this 27th day of September, 2000.

                                         LANGUAGEWARE.NET (COMPANY) LTD.

                                         By:   /s/ Thomas B. Foster
                                            --------------------------------
                                              Name: Thomas B. Foster
                                              Title: Chief Financial Officer

                                         TECHNOLOGY FUND II PTE LTD.

                                         By:   /s/ Glenn Chin-Yuen Chao
                                            --------------------------------
                                              Name: Glenn Chin-Yuen Chao
                                              Title: Director

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