Document:

Exhibit 4.6

                              AMERICA ONLINE, INC.
                                 1999 STOCK PLAN

1.       PURPOSES OF THE PLAN.

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

2.       DEFINITIONS.

         Unless otherwise  specified or unless the context  otherwise  requires,
         the following  terms, as used in this America  Online,  Inc. 1999 Stock
         Plan, have the following meanings:

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

               Affiliate,  with respect to ISOs, means a corporation  which, for
               purposes of Section 424 of the Code, is a parent or subsidiary of
               the   Company,   direct  or  indirect,   and,   with  respect  to
               Non-Qualified  Options,  means any corporation,  company or other
               entity whose financial results are consolidated with those of the
               Company in accordance  with U.S.  generally  accepted  accounting
               principles, all as determined by the Administrator.

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

               Change in Control means either a Corporate Change in Control or a
               Transactional Change in Control.

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

               Committee  means  the  Compensation  and  Management  Development
               Committee of the Board of Directors,  or its  successor,  or such
               other  committee  of the Board of Directors to which the Board of
               Directors  has  delegated  power to act under or  pursuant to the
               provisions of the Plan.

               Common Stock means shares of the Company's common stock, $.01 par
               value per share.

               Company means America Online, Inc., a Delaware corporation.

               Corporate  Change in Control  means the  happening  of any of the
               following events:

                  (1) the  acquisition  by any  individual,  entity or group (an
                  "Entity"),  including  any  "person"  within  the  meaning  of
                  Section   13(d)(3)  or  14(d)(2)  of  the  Exchange   Act,  of
                  beneficial   ownership  (within  the  meaning  of  Rule  13d-3
                  promulgated  under the Exchange  Act) of 30% or more of either
                  (i) the then outstanding shares of common stock of the Company
                  (the "Outstanding  Company Common Stock") or (ii) the combined
                  voting power of the then outstanding securities of the Company
                  entitled to vote  generally in the election of directors  (the
                  "Outstanding Company Voting Securities");  excluding, however,
                  the following:  (A) any acquisition  directly from the Company
                  (excluding  any  acquisition  by virtue of the  exercise of an
                  exercise, conversion or exchange privilege unless the security
                  being so exercised, converted or exchanged was itself acquired
                  directly  from  the  Company),  (B)  any  acquisition  by  the
                  Company,  or (C) any  acquisition by an employee  benefit plan
                  (or related  trust)  sponsored or maintained by the Company or
                  by any corporation controlled by the Company; or

                  (2) a change in the composition of the Board since October 28,
                  1999,  such  that  the  individuals  who,  as  of  such  date,
                  constituted  the Board of Directors  (the  "Incumbent  Board")
                  cease for any reason to constitute at least a majority of such
                  Board;  provided that any individual who becomes a director of
                  the Company subsequent to October 28, 1999 whose election,  or
                  nomination  for election by the  Company's  stockholders,  was
                  approved by the vote of at least a majority  of the  directors
                  then  comprising the Incumbent  Board shall be deemed a member
                  of  the  Incumbent  Board;  and  provided  further,  that  any
                  individual  who was  initially  elected as a  director  of the
                  Company  as a  result  of an  actual  or  threatened  election
                  contest,  as such terms are used in Rule 14a-11 of  Regulation
                  14A promulgated under the Exchange Act, or any other actual or
                  threatened solicitation of proxies or consents by or on behalf
                  of any  person or  Entity  other  than the Board  shall not be
                  deemed a member of the Incumbent Board.

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

               Fair Market Value of a Share of Common Stock means:

                  (1) If the  Common  Stock is listed on a  national  securities
                  exchange  or traded in the  over-the-counter  market and sales
                  prices  are  regularly  reported  for the  Common  Stock,  the
                  closing  or last price of the  Common  Stock on the  Composite
                  Tape or other  comparable  reporting system for the applicable
                  date,  or if the  applicable  date is not a trading  day,  the
                  trading day immediately preceding the applicable date;

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

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

               Involuntary  Employment Action shall mean any change in the terms
               and conditions of the  Participant's  employment with the Company
               or any  successor,  without  cause (as defined  herein),  to such
               extent that:

                  (1) the  Participant  shall  fail  to be  vested  with  power,
                  authority and resources  analogous to the Participant's  title
                  and/or office prior to the Change in Control, or

                  (2) the  Participant  shall  lose any  significant  duties  or
                  responsibilities attending such office, or

                  (3) there shall occur a reduction  in the  Participant's  base
                  compensation, or

                  (4) the  Participant's  employment  with the  Company,  or its
                  successor, is terminated without cause (as defined herein).

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

               Key Employee  means an employee of the Company or of an Affiliate
               (including,  without limitation,  an employee who is also serving
               as an officer or  director  of the  Company or of an  Affiliate),
               designated by the  Administrator to be eligible to be granted one
               or more Options or Stock Purchase Rights under the Plan; provided
               however,  that Key Employee shall not include any person who: (i)
               is  not on  the  payroll  of the  Company  or an  Affiliate  as a
               full-time or part-time  employee or (ii)  directly or  indirectly
               provides  services to the Company or an  Affiliate  pursuant to a
               contractual or other  arrangement,  written or otherwise  between
               the  Company or an  Affiliate  and either  that person or a third
               party,  which  does not  designate  such  person  as an  employee
               (regardless of whether a government agency, court or other entity
               subsequently  determines  that such  person is an employee of the
               Company or an Affiliate for purposes of  employment  taxes or for
               any  other  purpose).  Anything  in  the  prior  sentence  to the
               contrary  notwithstanding,  a person  who is  providing  services
               pursuant to a contractual  or other  arrangement  may be eligible
               for  participation  in the Plan as a consultant who is designated
               by the Administrator in accordance with Paragraph 5 of the Plan.

 .

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

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

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

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

               Plan means this America Online, Inc. 1999 Stock Plan.

               Restricted  Stock means shares of Common Stock acquired  pursuant
               to a grant of Stock Purchase Rights under Paragraph 14 below.

               Restricted  Stock Purchase  Agreement  means a written  agreement
               between the Company and a  Participant  evidencing  the terms and
               restrictions  applying to stock  purchased under a Stock Purchase
               Right, in such form as the Administrator shall approve.

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

               Stock  Purchase  Right means the right to purchase  Common  Stock
               pursuant  to  Paragraph  14  of  the  Plan,  as  evidenced  by  a
               Restricted Stock Purchase Agreement.

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

               Transactional  Change in Control  shall mean any of the following
               transactions to which the Company is a party:

                  (1)   a    reorganization,    recapitalization,    merger   or
                  consolidation  (a  "Corporate  Transaction")  of the  Company,
                  unless  securities  representing  60% or  more of  either  the
                  outstanding  shares of  common  stock or the  combined  voting
                  power of the then outstanding  voting  securities  entitled to
                  vote  generally in the election of directors of the Company or
                  the corporation  resulting from such Corporate Transaction (or
                  the parent of such  corporation)  are held  subsequent to such
                  transaction  by the person or persons who were the  beneficial
                  holders  of  the   Outstanding   Company   Common   Stock  and
                  Outstanding  Company Voting  Securities  immediately  prior to
                  such  Corporate   Transaction,   in  substantially   the  same
                  proportions  as  their  ownership  immediately  prior  to such
                  Corporate Transaction; or

                  (2)  the  sale,  transfer  or  other  disposition  of  all  or
                  substantially all of the assets of the Company.

               To Vest  means  that  you have  obtained  a  contingent  right to
               exercise or purchase a defined number of your stock  options,  as
               defined by and subject to the terms and  conditions  set forth in
               the pertinent  Option  Agreement and this Plan.  Unless and until
               your stock  options Vest  pursuant to the terms of the  pertinent
               Option  Agreement and this Plan, as well as the vesting  schedule
               included in your notice of grant,  you have not obtained any such
               right to exercise or purchase any of your unvested  stock options
               (except as may be provided in  Paragraphs  12 and 13 of this Plan
               and  in  the   pertinent   Option   Agreement  in  the  event  of
               Participant's Disability or death, respectively).

3.       SHARES SUBJECT TO THE PLAN.

         The number of Shares which may be issued from time to time  pursuant to
this Plan shall be 50,000,000  or the  equivalent of such number of Shares after
the effect of any stock split, stock dividend, combination,  recapitalization or
similar transaction in accordance with Paragraph 17 of the Plan. No more than 5%
of such  number of  Shares  may be issued  in  connection  with  grants of Stock
Purchase Rights.

         If an  Option  ceases  to be  "outstanding",  in whole or in part,  the
Shares which were subject to such Option shall be available  for the granting of
other Options under the Plan. Any Option shall be treated as "outstanding" until
such Option is exercised in full, or terminates or expires under the  provisions
of the Plan, or by agreement of the parties to the pertinent  Option  Agreement.
Shares that have  actually  been issued under the Plan upon  exercise of a Stock
Purchase Right shall not be returned to the Plan and shall not become  available
for the granting of other Options or Stock Purchase Rights under the Plan.

4.       ADMINISTRATION OF THE PLAN.

         Subject to the provisions of the Plan, the  Administrator is authorized
to:

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

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

          c.   Determine  the number of Shares  for which an Option,  Options or
               Stock Purchase Rights shall be granted,  provided,  however, that
               in no event shall  Options or Stock  Purchase  Rights to purchase
               more than 2,000,000  Shares be granted to any  Participant in any
               fiscal year;

          d.   Specify the terms and conditions upon which an Option, Options or
               Stock Purchase Rights may be granted; and

          e.   Award Options or Stock Purchase  Rights to  Participants  who are
               foreign  nationals  or  employed  or located  outside  the United
               States, or both, on such terms and conditions, including imposing
               conditions  on the  exercise  or  Vesting  of  Options  or  Stock
               Purchase  Rights,  different from those  applicable to Options or
               Stock Purchase Rights granted to Participants employed or located
               in  the  United   States  as  may,   in  the   judgment   of  the
               Administrator,  be  necessary  or desirable in order to recognize
               differences in local law, tax policy or customs;

provided, however, that all such interpretations,  rules, determinations,  terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those  Options  which are  designated as
ISOs.  Subject to the foregoing,  the  interpretation  and  construction  by the
Administrator  of any  provisions of the Plan or of any Option or Stock Purchase
Right granted under it shall be final, unless otherwise  determined by the Board
of  Directors,  if the  Administrator  is  the  Committee.  The  Administrator's
determinations  under  the  Plan  need  not be  uniform  and  may be  made by it
selectively  among persons who receive,  or are eligible to receive,  Options or
Stock Purchase  Rights under the Plan (whether or not such persons are similarly
situated).  Without limiting the generality of the foregoing,  the Administrator
shall be  entitled,  among  other  things,  to make  non-uniform  and  selective
determinations, and to enter into non-uniform and selective Option Agreements or
Restricted Stock Purchase Agreements as to (a) the persons to receive Options or
Stock Purchase Rights under the Plan, (b) the terms and provisions of Options or
Stock  Purchase  Rights under the Plan, and (c) whether a termination of service
with the Company and any Affiliate has occurred.

         No member  of the  Board of  Directors  or the  Administrator  shall be
liable for any action or  determination  made in good faith with  respect to the
Plan or any Option.

5.       ELIGIBILITY FOR PARTICIPATION.

         The Administrator  will, in its sole discretion,  name the Participants
in the Plan,  provided,  however,  that each Participant must be a Key Employee,
director or  consultant  of the Company or of an Affiliate at the time an Option
or Stock Purchase Right is granted.  Members of the Company's Board of Directors
who are not employees of the Company or of an Affiliate  may receive  Options or
Stock  Purchase  Rights  pursuant to Paragraph 6,  Subparagraph  A (f), but only
pursuant  thereto.   Notwithstanding  any  of  the  foregoing  provisions,   the
Administrator  may authorize the grant of an Option or Stock Purchase Right to a
person not then a Key  Employee,  director or consultant of the Company or of an
Affiliate.  The actual grant of such Option or Stock  Purchase  Right,  however,
shall be conditioned upon such person becoming  eligible to become a Participant
at or prior to the time of the  execution of the Option  Agreement or Restricted
Stock Purchase  Agreement  evidencing  such Option or Stock Purchase  Right,  as
applicable. ISOs may be granted only to Key Employees. Non-Qualified Options may
be granted to any Key  Employee,  director  or  consultant  of the Company or an
Affiliate.  Stock Purchase  Rights shall be granted only in connection  with the
hiring or  retention  of a Key  Employee.  The  granting  of any Option or Stock
Purchase Right to any individual  shall neither  entitle that individual to, nor
disqualify him or her from, participation in any other grant of Options or Stock
Purchase Rights.

6.       TERMS AND CONDITIONS OF OPTIONS.

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

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

                    a.   Option  Price:  The  option  price  (per  share) of the
                         Shares  covered by each Option shall be  determined  by
                         the  Administrator  but  shall  not be  less  than  one
                         hundred  percent  (100%) of the Fair Market  Value (per
                         share)  of the  Shares  on the  date  of  grant  of the
                         Option.

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

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

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

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

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

                    e.   Limitation  on  Grant  of  Non-Qualified   Options:  No
                         Non-Qualified  Option  shall be granted  after the date
                         provided in Paragraph 23 of this Plan.

                    f.   Directors' Options: Each director of the Company who is
                         not an employee of the Company or any  Affiliate,  upon
                         first  being  elected  or  appointed  to the  Board  of
                         Directors,  shall be granted a Non-Qualified  Option to
                         purchase  20,000 Shares;  provided,  however,  that the
                         Administrator  shall be entitled to grant an Option for
                         such higher number of Shares as may be appropriate  (as
                         determined  by  the   Administrator)   for  recruitment
                         purposes.  On the date  following the annual meeting of
                         stockholders of the Company each year, giving effect to
                         the  election  of any  director  or  directors  at such
                         annual  meeting of  stockholders,  each director who is
                         not an employee of the Company or any Affiliate and who
                         has served at least six  months as a director  shall be
                         granted  a  Non-Qualified  Option  to  purchase  20,000
                         Shares.  In addition,  on the date following the annual
                         meeting  of  stockholders  of the  Company  each  year,
                         giving  effect  to  the  election  of any  director  or
                         directors at such annual meeting of stockholders,  each
                         director  who is not an  employee of the Company or any
                         Affiliate  and  who  serves  on  the  Compensation  and
                         Management Development Committee or the Audit Committee
                         of  the  Board  of   Directors   (or  other   committee
                         designated  by the Board of Directors to be entitled to
                         receive options under this sentence) shall be granted a
                         Non-Qualified   Option  to  purchase   10,000   Shares;
                         provided,   further,  that  on  such  date,  each  such
                         director  who  serves  as the  Chair of such  committee
                         shall be  granted  an  additional  Option  to  purchase
                         10,000  Shares.  The grants for  service as a committee
                         member or Chair  shall  cover  service on all  eligible
                         committees  and shall not be cumulative  for service on
                         more than one committee.  Each Option granted  pursuant
                         to this  Section  6(A)(f)  shall  (i) have an  exercise
                         price equal to the Fair Market Value (per share) of the
                         Shares on the date of grant of the Option,  (ii) have a
                         term  of ten  (10)  years,  and  (iii)  be  immediately
                         exercisable  (subject  to Section 16 of the  Securities
                         Exchange Act of 1934, as amended (the "1934 Act")). The
                         Board of Directors  may amend this  Section  6(A)(f) to
                         increase, reduce, eliminate, or institute option grants
                         for Board, Committee, or other individual or collective
                         service under this Plan.

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

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

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

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

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

                    c.   Term of Option: For Participants who own

                         i.   Ten  percent  (10%) or less of the total  combined
                              voting  power  of  all  classes  of  stock  of the
                              Company  or  an   Affiliate,   each  Option  shall
                              terminate  ten  (10)  years  from  the date of the
                              grant  or at  such  earlier  time  as  the  Option
                              Agreement may provide.

                         ii.  More than ten percent (10%) of the total  combined
                              voting  power  of  all  classes  of  stock  of the
                              Company  or  an   Affiliate,   each  Option  shall
                              terminate  five  (5)  years  from  the date of the
                              grant  or at  such  earlier  time  as  the  Option
                              Agreement may provide.

                    d.   Limitation on Yearly  Exercise:  The Option  Agreements
                         shall  restrict  the  amount  of  Options  which may be
                         exercisable  in any  calendar  year  (under this or any
                         other ISO plan of the Company or an  Affiliate) so that
                         the aggregate Fair Market Value (determined at the time
                         each ISO is granted) of the stock with respect to which
                         ISOs  are   exercisable  for  the  first  time  by  the
                         Participant  in any  calendar  year does not exceed one
                         hundred thousand dollars ($100,000), provided that this
                         subparagraph  (d) shall  have no force or effect if its
                         inclusion  in the  Plan is not  necessary  for  Options
                         issued as ISOs to qualify as ISOs  pursuant  to Section
                         422(d) of the Code.

                    e.   Limitation  on Grant of ISOs:  No ISOs shall be granted
                         after the date provided in Paragraph 23 of this Plan.

                    f.   To the extent that an Option which is intended to be an
                         ISO  fails to so  qualify,  it shall  be  treated  as a
                         Non-Qualified Option.

7.       EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.

         An Option (or any part or  installment  thereof)  shall be exercised in
accordance with  procedures  established by the Company by giving written notice
to  the  Company  at its  principal  executive  office  address,  together  with
provision  for  payment  of the full  purchase  price in  accordance  with  this
Paragraph  for the  Shares as to which the Option is being  exercised,  and upon
compliance with any other  condition(s) set forth in the Option Agreement.  Such
written notice shall be signed by the person exercising the Option,  shall state
the number of Shares  with  respect to which the Option is being  exercised  and
shall contain any  representation  required by the Plan or the Option Agreement.
Payment of the  purchase  price for the Shares as to which such  Option is being
exercised shall be made (a) in United States dollars in cash or by check, or (b)
at the  discretion of the  Administrator,  through  delivery of shares of Common
Stock  having a Fair Market  Value  equal as of the date of the  exercise to the
cash  exercise   price  of  the  Option,   or  (c)  at  the  discretion  of  the
Administrator,  by delivery of the  grantee's  personal  recourse  note  bearing
interest  payable not less than annually at no less than 100% of the  applicable
Federal  rate,  as  defined  in  Section  1274(d)  of  the  Code,  or (d) at the
discretion of the Administrator,  in accordance with a cashless exercise program
established with a securities brokerage firm, and approved by the Administrator,
or (e) at the  discretion  of the  Administrator,  through  such other method of
payment  approved  by  the  Administrator,  or  (f)  at  the  discretion  of the
Administrator,  by any  combination  of  (a),  (b),  (c),  (d)  and  (e)  above.
Notwithstanding the foregoing,  the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.

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

         The  Administrator  shall  have  the  right to  accelerate  the date of
exercise of any installment of any Option; provided that the Administrator shall
not accelerate the exercise date of any installment of any Option granted to any
Key Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 20) if such acceleration  would violate the annual vesting
limitation  contained in Section  422(d) of the Code,  as described in Paragraph
6(B)(d).

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

8.       RIGHTS AS A STOCKHOLDER.

        No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option,  except after due
exercise  of the  Option and  tender of the full  purchase  price for the Shares
being  purchased  pursuant  to such  exercise  (and  satisfaction  of such other
conditions for the transfer of Shares as may be required pursuant to the Option)
and  registration  of the Shares in the Company's  share register in the name of
the Participant.  No Participant to whom a Stock Purchase Right has been granted
shall have rights as a  stockholder  with respect to any Shares  covered by such
Stock  Purchase  Right,  except after tender of the full purchase  price for the
Shares  being  purchased  (and  satisfaction  of such other  conditions  for the
transfer of Shares as may be required  pursuant to the Stock Purchase Right) and
registration  of the Shares in the Company's  share  register in the name of the
purchaser.  Once the Stock Purchase Right is exercised, the purchaser shall have
the rights equivalent to those of a stockholder, and shall be a stockholder when
his or her purchase is entered upon the records of the duly authorized  transfer
agent of the Company.  No adjustment  will be made for a dividend or other right
for  which the  record  date is prior to the date the  Stock  Purchase  Right is
exercised, except as provided in Section 17 of the Plan.

9.       ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS.

         By  its  terms,  an  Option  or  Stock  Purchase  Right  granted  to  a
Participant  shall not be transferable by the Participant other than (i) by will
or by the laws of descent and distribution,  or (ii) as otherwise  determined by
the Administrator and set forth in the applicable Option Agreement or Restricted
Stock  Purchase  Agreement.  The  designation of a beneficiary of an Option by a
Participant shall not be deemed a transfer prohibited by this Paragraph.  Except
as provided  above,  an Option or Stock  Purchase  Right  shall be  exercisable,
during the  Participant's  lifetime,  only by such Participant (or by his or her
legal representative) and shall not be assigned,  pledged or hypothecated in any
way  (whether  by  operation  of law or  otherwise)  and shall not be subject to
execution,  attachment or similar process.  Any attempted transfer,  assignment,
pledge, hypothecation or other disposition of any Option or Stock Purchase Right
or of any rights granted thereunder  contrary to the provisions of this Plan, or
the levy of any  attachment or similar  process upon an Option or Stock Purchase
Right, shall be null and void.

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

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

          a.   A  Participant  who  ceases  to  be  an  employee,   director  or
               consultant  of the  Company  or of an  Affiliate  (for any reason
               other than  termination  "for  cause",  Disability,  or death for
               which events there are special  rules in  Paragraphs  11, 12, and
               13, respectively),  may exercise any Option granted to him or her
               to the extent that the Option is  exercisable on the date of such
               termination  of  service,  but  only  within  such  term  as  the
               Administrator  has designated in the pertinent Option  Agreement.
               An Option that is not  exercisable  on the date of termination of
               service is  canceled  on such date and may not be  exercised.  An
               Option that is exercisable on the date of termination of service,
               but  not  exercised  within  the  term as the  Administrator  has
               designated in the pertinent  Option Agreement is canceled and may
               not be exercised thereafter.

          b.   Except as  provided  in  Paragraph  12, in no event may an Option
               Agreement  provide,  if the Option is intended to be an ISO, that
               the time for  exercise  be later than three (3) months  after the
               Participant's termination of employment.

          c.   The  provisions  of this  Paragraph,  and not the  provisions  of
               Paragraph 12 or 13, shall apply to a Participant who subsequently
               becomes  Disabled or dies after the  termination  of  employment,
               director status or consultancy, provided, however, in the case of
               a Participant's Disability or death within three (3) months after
               the  termination of employment,  director  status or consultancy,
               the Participant or the  Participant's  Survivors may exercise the
               Option  within one (1) year  after the date of the  Participant's
               termination  of  employment,  but in no event  after  the date of
               expiration of the term of the Option.

          d.   Notwithstanding anything herein to the contrary, if subsequent to
               a  Participant's   termination  of  employment,   termination  of
               director status or termination of  consultancy,  but prior to the
               exercise of an Option,  the Board of Directors  determines  that,
               either prior or subsequent to the Participant's termination,  the
               Participant engaged in conduct which would constitute "cause" (as
               defined in  Paragraph  11  below),  then such  Participant  shall
               forthwith cease to have any right to exercise any Option, whether
               or not such Option was previously exercisable.

          e.   A  Participant  to whom an Option has been granted under the Plan
               who is absent  from work with the  Company  or with an  Affiliate
               because of  temporary  disability  (any  disability  other than a
               permanent and total Disability as defined in Paragraph 2 hereof),
               or who is on leave of absence for any purpose,  shall not, during
               the  period of any such  absence,  be  deemed,  by virtue of such
               absence alone, to have terminated such Participant's  employment,
               director  status  or  consultancy  with  the  Company  or with an
               Affiliate,  except  to  the  extent  that  the  Administrator  so
               determines  as Company  policy or to the  extent  that the Option
               Agreement may otherwise expressly provide.

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

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

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

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

          b.   For purposes of this Plan,  except as  otherwise  provided in the
               pertinent   Option   Agreement  or  Restricted   Stock   Purchase
               Agreement,   "cause"  shall  include  (and  is  not  limited  to)
               dishonesty   with  respect  to  the  Company  or  any  Affiliate,
               insubordination, substantial malfeasance or non-feasance of duty,
               unauthorized disclosure of confidential information,  and conduct
               substantially  prejudicial  to the business of the Company or any
               Affiliate.  The  determination  of  the  Administrator  as to the
               existence of "cause" will be  conclusive on the  Participant  and
               the Company.

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

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

12.      EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.

         Except as  otherwise  provided in the  pertinent  Option  Agreement,  a
Participant  who terminates his or her  employment,  directorship or consultancy
with the Company or an Affiliate by reason of Disability may exercise any Option
granted to such Participant:

          a.   To the extent  exercisable  but not exercised on the date of such
               cessation; and

          b.   In the event rights to exercise the Option Vest periodically,  to
               the  extent of a pro rata  portion  of any  additional  rights as
               would have Vested had the  Participant  not terminated his or her
               employement,  directorship  or  consultancy  by  reason  of  such
               Disability,  prior to the end of the  Vesting  period  which next
               ends following the date of such termination.  The proration shall
               be based upon the number of days of such Vesting  period prior to
               the date of such termination.

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

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

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

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

          a.   To the extent exercisable but not exercised on the date of death;
               and

          b.   In the event rights to exercise the Option Vest periodically,  to
               the extent of a pro rata portion of any  additional  rights which
               would have Vested had the  Participant  not died prior to the end
               of the  Vesting  period  which  next ends  following  the date of
               death.  The  proration  shall be based upon the number of days of
               such Vesting period prior to the Participant's death.

         Except as otherwise provided in the pertinent Option Agreement,  if the
Participant's  Survivors  wish to  exercise  the  Option,  they  must  take  all
necessary  steps to  exercise  the Option  within one (1) year after the date of
Participant's  termination of employment,  directorship or  consultancy,  as the
case may be,  notwithstanding that the decedent might have been able to exercise
the  Option as to some or all of the Shares on a later date if he or she had not
died and had continued to be an employee, director or consultant or, if earlier,
within the originally prescribed term of the Option.

14.      STOCK PURCHASE RIGHTS.

        a. Rights to Purchase. Stock Purchase Rights may be issued either alone,
in addition to, or in tandem with other awards granted under the Plan. After the
Administrator  determines  that it will offer Stock  Purchase  Rights  under the
Plan, it shall advise the offeree in writing,  by means of an Agreement,  of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree  shall be  entitled  to  purchase,  the price to be paid
(which shall not be less than the par value of the Shares),  and the time within
which the offeree must accept such offer, which shall in no event exceed six (6)
months  from the date upon which the  Administrator  made the  determination  to
grant the Stock  Purchase  Right.  The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.

        b. Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase  Agreement shall grant the Company a repurchase option
exercisable  upon the voluntary or involuntary  termination  of the  purchaser's
employment with the Company for any reason (including death or Disability).  The
purchase price for Shares repurchased  pursuant to the Restricted Stock Purchase
Agreement  shall be the original  price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at a rate determined by the Administrator.

        c. Other  Provisions.  The  Restricted  Stock Purchase  Agreement  shall
contain such other terms,  provisions and conditions not  inconsistent  with the
Plan as may be  determined  by the  Administrator  in its  sole  discretion.  In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.

15.      PURCHASE FOR INVESTMENT.

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

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

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

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

         The Company may delay  issuance of the Shares until  completion  of any
action or obtaining of any consent which the Company deems  necessary  under any
applicable law (including,  without  limitation,  state securities or "blue sky"
laws.)

16.      DISSOLUTION OR LIQUIDATION OF THE COMPANY.

         Upon the  dissolution  or  liquidation  of the Company,  all Options or
Stock  Purchase  Rights  granted under this Plan which as of such date shall not
have been exercised will terminate and become null and void; provided,  however,
that if the  rights  of a  Participant  or a  Participant's  Survivors  have not
otherwise  terminated  and expired,  (i) the  Participant  or the  Participant's
Survivors  will  have  the  right  immediately  prior  to  such  dissolution  or
liquidation  to exercise any Option or Stock  Purchase  Right to the extent that
the Option or Stock Purchase  Right is  exercisable  as of the date  immediately
prior to such dissolution or liquidation;  and (ii) if a Change in Control shall
have  occurred  within the twelve months  immediately  prior to the date of such
dissolution or liquidation,  such  Participant or such  Participant's  Survivors
will have the right  immediately  prior to such  dissolution  or  liquidation to
exercise any Option or Stock Purchase Right then outstanding whether or not such
Option or Stock Purchase Right is exercisable as of such date.

17.       ADJUSTMENTS.

          Upon the occurrence of any of the following events, the adjustments as
hereinafter provided shall be made, unless otherwise  specifically provided in a
pertinent Option Agreement or Restricted Stock Purchase Agreement:

               A. Stock Dividends and Stock Splits.  If (i) the shares of Common
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock  dividend on
its  outstanding  Common Stock,  or (ii)  additional  shares or new or different
shares  or  other  securities  of the  Company  or  other  non-cash  assets  are
distributed with respect to such shares of Common Stock, the number of shares of
Common Stock  deliverable upon the exercise of an Option or Stock Purchase Right
may be  appropriately  increased or decreased  proportionately,  and appropriate
adjustments  may be made  in the  purchase  price  per  share  to  reflect  such
subdivision,  combination  or stock  dividend.  The number of Shares  subject to
options to be granted (i) pursuant to  Paragraph 3 or to  directors  pursuant to
Paragraph 6(A)(f) shall also be proportionately  adjusted upon the occurrence of
such events,  except as the Administrator  shall otherwise determine in its sole
discretion  or (ii)  pursuant to  Paragraph  4(c) shall also be  proportionately
adjusted upon the occurrence of such events.

               B.  Corporate  Changes in  Control.  In the event of a  Corporate
Change in Control,

         (i) Each Option or Stock Purchase Right outstanding as of the date such
Corporate  Change in Control is  determined to have  occurred,  and which is not
then  exercisable  by  reason  of  Vesting  requirements,   shall  automatically
accelerate  the Vesting so that the Option or Stock  Purchase Right shall become
fully exercisable and Vested on the first to occur of (x) the date the Option or
Stock  Purchase Right becomes  Vested and  exercisable  under its original terms
(with respect only to such Options or Stock Purchase  Rights as otherwise  would
Vest during such one-year period under their terms),  (y) the first  anniversary
of the date such Corporate Change in Control is determined to have occurred, and
(z) the occurrence of an Involuntary Employment Action; and

         (ii) The Options or Stock Purchase  Rights so accelerated  shall remain
so exercisable  until the earlier of the original  expiration date of the Option
or Stock  Purchase  Right and the  earlier  termination  of the  Option or Stock
Purchase Right in accordance with the Plan and the Agreement.

               C.  Transactional   Changes  in  Control.   In  the  event  of  a
Transactional Change in Control,

               (i) Each Option or Stock  Purchase  Right  outstanding  as of the
date such  Transactional  Change in Control is determined to have occurred shall
be either: (a) assumed by the successor  corporation (or its parent) or replaced
with a  comparable  option or stock  purchase  right to  purchase  shares of the
capital  stock of the  successor  corporation  (or its  parent) on an  equitable
basis, (b) terminated upon written notice to the  Participants  stating that all
Options or Stock Purchase Rights (for purposes of this  Subparagraph all Options
or Stock Purchase  Rights then  outstanding  shall be deemed to be  exercisable)
must be  exercised  within a specified  number of days (which  shall not be less
than 15 days) from the date such notice is given, at the end of which period the
Options or Stock Purchase Rights shall terminate,  or (c) terminated in exchange
for a cash  payment  equal to the excess of the Fair Market  Value of the shares
subject  to  such  Options  or  Stock  Purchase  Rights  (for  purposes  of this
Subparagraph  all Options then  outstanding  shall be deemed to be  exercisable)
over  the  exercise  price  thereof;  provided,  however,  that  if  any  of the
treatments of Options or Stock Purchase  Rights  pursuant to this Plan set forth
in clauses  (a), (b) or (c) above would make a  Transactional  Change in Control
transaction ineligible for pooling-of-interest  accounting under APB No. 16 such
that but for the nature of such treatment such  transaction  would  otherwise be
eligible for such accounting  treatment,  the Committee (or the Administrator if
no Committee has been  appointed)  shall have the ability to substitute  for any
cash or other consideration  payable under such treatment shares of Common Stock
with a Fair Market Value or other  consideration with value equal to the cash or
other  consideration that would otherwise be payable pursuant to such treatment.
The  determination  of which of the treatments set forth in clauses (a), (b) and
(c) above to provide and of  comparability  under clause (a) above shall be made
by the  Administrator  and  its  determinations  shall  be  final,  binding  and
conclusive.

               (ii) Each  Option or Stock  Purchase  Right  that is  assumed  or
replaced  in   connection   with  a   Transactional   Change  in  Control  shall
automatically accelerate so that the Option or Stock Purchase Right shall become
fully  exercisable  and  Vested on the first to occur of (x) the date the Option
becomes  Vested and  exercisable  under its original terms (with respect only to
such  Options or Stock  Purchase  Rights as  otherwise  would Vest  during  such
one-year period under their terms),  (y) the first  anniversary of the date such
Transactional  Change in Control is  determined  to have  occurred,  and (z) the
occurrence of an Involuntary  Employment  Action.  The Options or Stock Purchase
Rights so  accelerated  shall  remain so  exercisable  until the  earlier of the
original expiration date of the Option and the earlier termination of the Option
in accordance with the Plan and the Agreement.

               D. Corporate Transaction. In the event of a Corporate Transaction
that does not constitute a Transactional  Change in Control or in the event of a
similar  event,  pursuant  to which  securities  of the  Company  or of  another
corporation  or entity are issued  with  respect  to the  outstanding  shares of
Common Stock,  a Participant  upon  exercising an Option or Stock Purchase Right
shall be entitled to receive for the purchase  price paid upon such exercise the
securities which would have been received if such Option or Stock Purchase Right
had been exercised prior to such Corporate Transaction.

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

18.      ISSUANCES OF SECURITIES.

         Except as  expressly  provided  herein,  no  issuance by the Company of
shares of stock of any class, or securities  convertible into shares of stock of
any class,  shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares  subject to Options or Stock  Purchase
Rights.  Except as expressly  provided herein,  no adjustments shall be made for
dividends paid in cash or in property (including without limitation, securities)
of the Company.

19.      FRACTIONAL SHARES.

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

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

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

21.      WITHHOLDING.

         In the event that any federal, state, or local income taxes, employment
taxes,  Federal Insurance  Contributions Act ("F.I.C.A.")  withholdings or other
amounts are required by  applicable  law or  regulation  to be withheld from the
Participant's  salary,  wages  or  other  remuneration  in  connection  with the
exercise of an Option or a  Disqualifying  Disposition  (as defined in Paragraph
22) or the Vesting of Shares  issued  pursuant  to Stock  Purchase  Rights,  the
Company may deduct from any amounts due to the Participant, such as compensation
or  reimbursements,  or may require that the Participant  advance in cash to the
Company,  or to any  Affiliate  of the Company  which  employs or  employed  the
Participant,  the amount of such  withholdings  unless a  different  withholding
arrangement,  including  the use of shares of the  Company's  Common  Stock or a
promissory  note,  is authorized by the  Administrator  (and  permitted by law),
provided,  however,  that with  respect to persons  subject to Section 16 of the
1934 Act,  any such  withholding  arrangement  shall be in  compliance  with any
applicable  provisions  of Rule 16b-3  promulgated  under Section 16 of the 1934
Act.  For  purposes  hereof,  the fair market  value of the shares  withheld for
purposes of payroll  withholding  shall be determined in the manner  provided in
Paragraph 2 above, as of the most recent  practicable  date prior to the date of
exercise.  If the fair  market  value of the  shares  withheld  is less than the
amount of payroll  withholdings  required,  the  Participant  may be required to
advance the  difference  in cash to the Company or the Affiliate  employer.  The
Administrator in its discretion may condition the exercise of an Option for less
than the then Fair Market Value on the Participant's  payment of such additional
withholding.

22.      NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

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

23.      TERMINATION OF THE PLAN.

         Unless  sooner  terminated  by the Board of  Directors,  the Plan shall
terminate on October 28,  2009,  and no Options or Stock  Purchase  Rights shall
thereafter  be granted  under the Plan.  All  Options or Stock  Purchase  Rights
granted  under the Plan  prior to that date  shall  remain in effect  until such
Options or Stock  Purchase  Rights shall have been  exercised or  terminated  in
accordance  with the terms and provisions of the Plan and the applicable  Option
Agreements or Restricted Stock Purchase  Agreements.  The Board of Directors may
terminate the Plan at any time;  provided,  however,  that any such  termination
will not  materially  impair any rights under any Option or Stock Purchase Right
theretofore made under the Plan without the consent of the Participant.

24.      AMENDMENT OF THE PLAN AND AGREEMENTS.

         The Plan may be amended by the  stockholders  of the Company.  The Plan
may also be amended by the Board of Directors or the  Administrator,  including,
without  limitation,  to the extent  necessary to qualify any or all outstanding
Options  granted  under the Plan or  Options  to be  granted  under the Plan for
favorable  federal  income tax  treatment  (including  deferral of taxation upon
exercise) as may be afforded  incentive  stock  options under Section 422 of the
Code,  for as long as the  Company has a class of stock  registered  pursuant to
Section 12 of the 1934 Act and to the  extent  necessary  to qualify  the shares
issuable  upon exercise of any  outstanding  Options  granted,  or Options to be
granted,  under the Plan for  listing on any  national  securities  exchange  or
quotation in any national automated quotation system of securities dealers.  Any
amendment approved by the Administrator which the Administrator determines is of
a scope that requires  stockholder  approval  shall be subject to obtaining such
stockholder  approval.  Any  modification  or  amendment  of the Plan shall not,
without the consent of a  Participant,  materially  adversely  affect his or her
rights under an Option or Stock Purchase Right previously granted to him or her.
With the  consent  of the  Participant  affected,  the  Administrator  may amend
outstanding  Option  Agreements or  Restricted  Stock  Purchase  Agreements in a
manner  which may be  materially  adverse  to the  Participant  but which is not
inconsistent with the Plan. In the discretion of the Administrator,  outstanding
Option Agreements or Restricted Stock Purchase  Agreements may be amended by the
Administrator in a manner which is not materially adverse to the Participant.

25.      EMPLOYMENT OR OTHER RELATIONSHIP.

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

         All  Options  and Stock  Purchase  Rights  shall  constitute  a special
incentive  payment to the  Participant  and shall not be taken  into  account in
computing  the  amount of  salary or  compensation  of the  Participant  for the
purpose  of   determining   any   benefits   under  any   pension,   retirement,
profit-sharing,  bonus,  life  insurance or other benefit plan of the Company or
under any agreement between the Company and the Participant, unless such plan or
agreement specifically provides otherwise.

26.      GOVERNING LAW.

         This Plan shall be governed by and  construed  in  accordance  with the
laws of the State of Delaware,  the Company's state of incorporation.  Except as
otherwise  provided  in the  pertinent  Option  Agreement  or  Restricted  Stock
Purchase Agreement, the United States District Court for the Eastern District of
Virginia shall have exclusive  jurisdiction  over any and all disputes between a
Participant  and the Company  related to or arising out of Options or Restricted
Stock Purchase Rights granted under this Plan.

Notice Of Grant Of Stock Options

1999 Stock Plan, Version ___

America Online, Inc. Post 11/22/99 Split

ID: 54-1322110
22110 Pacific Blvd.
Dulles, VA 20166

I, _______________________, am the Participant.

ID: ______________________

I understand that by clicking on each of the boxes below and typing in "I Agree"
at the bottom,  I am giving  America  Online,  Inc.  or its parent or  successor
("AOL") the equivalent of my written signature for all legal purposes.

Participant  has been  granted  options  to buy AOL  Common  Stock  (the  "Stock
Options") as follows:

Non-Qualified Stock Option Grant Number:  ____________
Date of Grant:  ____________
Purchase Price per Share:  ____________*
Total Number of Shares Granted: ____________*

AOL and I agree that these  options are granted  under and governed by the terms
and  conditions  of the AOL 1999 Stock Plan (the  "Plan") and the  Non-Qualified
Stock  Option  Agreement,  Version  1  (the  "Agreement"),   all  of  which  are
incorporated by reference  into, and made a part of, this document,  and which I
can access and review through the HR website at  http://anvil.office.aol.com.  I
am also  advised  to refer  to the  Plan  Description  of the  Plan  (the  "Plan
Summary"),  which also may be accessed through the HR Website.  I hereby consent
to receive the Plan, the Agreement and the Plan Summary  electronically  via the
HR Website, and I agree that I have had an opportunity to review these records.

I understand that my Stock Options shall become vested and  exercisable  only in
accordance  with  the  following  vesting  schedule,  subject  to the  Plan  and
Agreement terms:

Shares                       Vesting Date                   Expiration Date

I  understand  that  the  vesting  of my Stock  Options  will  cease in  certain
circumstances,  including  but not limited to,  termination  of  employment,  as
provided in the Plan and Agreement.

I understand that in general,  any vested and exercisable  Stock Options will be
canceled no later than 90 calendar days  following a termination  of employment,
and that if vested and exercisable  Stock Options are not exercised  within this
90 day period,  they will be canceled and cannot ever be exercised,  as provided
in the Plan and Agreement.

I understand  that my unvested Stock Options will be canceled upon a termination
of employment and cannot ever be exercised.

I  understand  that  termination  of my  employment  for  "cause"  may result in
forfeiture of all vested but unexercised Stock Options.

I further agree that I have read and will comply with AOL's  Securities  Trading
Policy (also  accessible on the HR Website),  which I understand  may be updated
from time to time.

I understand that I may be entitled now and from time to time to receive certain
other  documents,  including  AOL's  annual  report  to  stockholders  and proxy
statements  (which become available each year  approximately  three months after
AOL's  fiscal  year  end),  and I  hereby  consent  to  receive  such  documents
electronically on the Web or as AOL otherwise directs.

*Purchase  price and  number of shares are  expressed  in this  document  are in
post--11/22/99 terms.

Signed Online By __________________ On __________ At ________ PM

                      NON-QUALIFIED STOCK OPTION AGREEMENT

                              AMERICA ONLINE, INC.

         THIS  AGREEMENT is made as of the Date of Grant set forth on the Notice
of Grant of Stock Options attached hereto (the "Notice") between America Online,
Inc.  (the  "Company"),  a  Delaware  corporation  having a  principal  place of
business in Dulles, Virginia, and the Participant.

         WHEREAS,  the Company  desires to grant to the Participant an Option to
purchase  shares of its common stock,  $.01 par value per share (the  "Shares"),
under and for the  purposes  set forth in the  Company's  1999  Stock  Plan (the
"Plan");

         WHEREAS, the Company and the Participant  understand and agree that any
terms used and not defined herein have the same meanings as in the Plan; and

         WHEREAS,  the Company and the  Participant  each intend that the Option
granted herein shall be a Non-Qualified Option.

         NOW,  THEREFORE,  in consideration of the mutual covenants  hereinafter
set forth and for other good and  valuable  consideration,  the  parties  hereto
agree as follows:

         1.       GRANT OF OPTION.

         The Company  hereby grants to the  Participant  the right and option to
purchase  all or any part of an  aggregate  of such  number  of Shares as is set
forth  in the  Notice,  on the  terms  and  conditions  and  subject  to all the
limitations set forth herein and in the Plan,  which is  incorporated  herein by
reference.

         2.       PURCHASE PRICE.

         The purchase  price of the Shares covered by the Option shall be as set
forth in the Notice,  subject to  adjustment,  as  provided in the Plan,  in the
event of a stock  split,  reverse  stock  split or other  events  affecting  the
holders of Shares.  Payment shall be made in accordance  with Paragraph 7 of the
Plan.

         3.       EXERCISE OF OPTION.

         Subject to the terms and conditions set forth in this Agreement and the
Plan, the Option  granted  hereby shall be exercisable  according to the Vesting
Schedule set forth on the Notice.

         The foregoing  rights are cumulative and are subject to the other terms
and conditions of this Agreement and the Plan.

         4.       TERM OF OPTION.

         Unless earlier terminated  pursuant to the provisions of this Agreement
or the Plan, the unexercised  portion of the Option shall expire and cease to be
exercisable  at 5:00 p.m.  Eastern Time on the tenth  anniversary of the date of
this Agreement.

         If the Participant ceases to be an employee,  director or consultant of
the  Company  or of an  Affiliate  (for  any  reason  other  than  the  death or
Disability of the  Participant or termination of the Participant for "cause" (as
defined in the Plan)),  the Option may be  exercised,  if it has not  previously
terminated,  within ninety (90) days after the date the Participant ceases to be
an employee,  director or consultant  of the Company or an Affiliate,  or within
the originally prescribed term of the Option,  whichever is earlier, but may not
be exercised thereafter.  In such event, the Option shall be exercisable only to
the extent that the Option has become  exercisable  and is in effect at the date
of such  cessation of employment,  directorship  or  consultancy.  As authorized
pursuant  to  Paragraph  10(f)  of the  Plan,  a  change  in the  status  of the
Participant  within or among the Company and its Affiliate  shall not affect the
Option, except that a change in status of the Participant from a Key Employee of
the Company or an Affiliate to a consultant of the Company or an Affiliate shall
be treated  and have the same effect as if the  Participant  had ceased to be an
employee,  director or consultant of the Company, unless the Administrator shall
determine otherwise.

         Notwithstanding  the  foregoing  paragraph,  in the event of any of the
following,  the Option may be exercised as provided in the Plan, but in no event
after the date of expiration of the term of the Option:

(a)       the  Participant's  Disability  or death within three (3) months after
          the termination of employment, directorship or consultancy;
(b)       Participant's  termination of employment,  directorship or consultancy
          by reason of  Participant's  Disability,  as  determined in accordance
          with the Plan; and
(c)       the death of the Participant while an employee, director or consultant
          of the Company or of an Affiliate.

         In the event the Participant's employment,  directorship or consultancy
is  terminated  by the  Company or an  Affiliate  for "cause" (as defined in the
Plan),  the  Participant's  right to exercise  any  unexercised  portion of this
Option  shall  cease as of such  termination,  and this Option  shall  thereupon
terminate. Notwithstanding anything herein to the contrary, if subsequent to the
Participant's termination, but prior to the exercise of the Option, the Board of
Directors of the Company  determines  that,  either prior or  subsequent  to the
Participant's  termination,  the  Participant  engaged  in conduct  which  would
constitute  "cause," then the Participant  shall  immediately  cease to have any
right to exercise the Option and this Option shall thereupon terminate,  whether
or not this Option was previously exercisable.

         5.       METHOD OF EXERCISING OPTION.

         Subject to the terms and conditions of this  Agreement,  the Option may
be exercised by written notice to the Company in such form as is provided by the
Company or pursuant to other procedures  established by the Company. Such notice
shall  state the  number of Shares  with  respect  to which the  Option is being
exercised and shall be signed (whether or not in electronic  form) by the person
exercising  the Option.  Payment of the purchase  price for such Shares shall be
made in  accordance  with  Paragraph 7 of the Plan.  The Company shall deliver a
certificate  or  certificates  representing  such Shares as soon as  practicable
after the notice  shall be  received,  provided,  however,  that the Company may
delay issuance of such Shares until completion of any action or obtaining of any
consent,  which the Company deems necessary or appropriate  under any applicable
law  (including,  without  limitation,  state  securities or "blue sky" laws and
satisfaction of applicable tax withholding  requirements)  and such Shares shall
be subject to the  restrictions set forth in Section 7 of the Agreement and such
other  restrictions  as the  Administrator  may determine in accordance with the
Plan.  The  certificate  or  certificates  for the Shares as to which the Option
shall have been so exercised  shall be  registered  in the name of the person or
persons so  exercising  the Option (or, if the Option  shall be exercised by the
Participant and if the Participant shall so request in the notice exercising the
Option,  shall be registered in the name of the  Participant  and another person
jointly, with right of survivorship) and shall be delivered as provided above to
or upon the written order of the person or persons exercising the Option. In the
event the Option shall be exercised, pursuant to Section 4 hereof, by any person
or persons  other than the  Participant,  such notice  shall be  accompanied  by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be  purchased  upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.

         6.       PARTIAL EXERCISE.

         Exercise of this Option to the extent  above stated may be made in part
at any time and from  time to time  within  the  above  limits,  except  that no
fractional share shall be issued pursuant to this Option.

         7.       NON-ASSIGNABILITY.

         The Option shall not be transferable by the Participant  otherwise than
by will or by the laws of descent and  distribution or as may be permitted under
policies that may be adopted from time to time by the  Administrator in its sole
discretion. The Option shall be exercisable,  during the Participant's lifetime,
only by the Participant  (or, in the event of legal  incapacity or incompetency,
by the  Participant's  guardian or  representative)  and shall not be  assigned,
pledged or  hypothecated  in any way (whether by operation of law or  otherwise)
and shall not be subject  to  execution,  attachment  or  similar  process.  Any
attempted transfer,  assignment,  pledge,  hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of this
Section 7, or the levy of any  attachment or similar  process upon the Option or
such rights shall be null and void.

         8.       NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

         The Participant  shall have no rights as a stockholder  with respect to
Shares  subject  to this  Agreement  until  registration  of the  Shares  in the
Company's share register in the name of the Participant.  Except as is expressly
provided in the Plan with respect to certain  changes in the  capitalization  of
the Company,  no adjustment  shall be made for  dividends or similar  rights for
which the record date is prior to the date of such registration.

         9.       CAPITAL CHANGES AND BUSINESS SUCCESSIONS.

         The Plan  contains  provisions  covering the  treatment of Options in a
number of contingencies such as stock splits and mergers. Provisions in the Plan
for  adjustment  with  respect  to stock  subject  to  Options  and the  related
provisions  with respect to successors to the business of the Company are hereby
made applicable  hereunder and are incorporated  herein by reference;  provided,
however, that in accordance with the introductory paragraph to Section 17 of the
Plan, the transactions described in the Agreement and Plan of Merger Dated as of
January  10, 2000  between  America  Online,  Inc.  and Time  Warner  Inc.  (the
"Merger")  shall not cause the vesting of the Options to accelerate as described
in Sections 17(B) and 17(C) of the Plan.

         10.      TAXES.

         The Participant  acknowledges that the exercise of the Option is likely
to have Federal,  state and/or local income tax consequences on the Participant.
The Participant  acknowledges that any income or other taxes due from him or her
with respect to this Option or the Shares issuable pursuant to this Option shall
be the Participant's responsibility.

         The  Participant   agrees  that  the  Company  may  withhold  from  the
Participant's remuneration, if any, the appropriate amount of federal, state and
local  withholding  attributable to such amount that the Company  believes it is
obligated  to withhold  under the  Internal  Revenue  Code of 1986,  as amended,
including  but not limited to,  income and  employment  taxes.  At the Company's
discretion, the amount required to be withheld may be withheld in cash from such
remuneration,   or  in  kind  from  the  Shares  otherwise  deliverable  to  the
Participant on exercise of the Option.  The Participant  further agrees that, if
the Company  does not  withhold an amount  from the  Participant's  remuneration
sufficient  to satisfy the  Company's  income tax  withholding  obligation,  the
Participant will reimburse the Company,  in cash, for the amount  under-withheld
within  thirty (30) days after the Company has given the  Participant  notice of
such under-withheld amount.

         11.      PURCHASE FOR INVESTMENT.

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

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

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

         (b)      If the Company so requires, the Company shall have received an
                  opinion of its counsel that the Shares may be issued upon such
                  particular  exercise in  compliance  with the 1933 Act without
                  registration  thereunder.  Without  limiting the generality of
                  the  foregoing,  the Company may delay  issuance of the Shares
                  until  completion  of any action or  obtaining of any consent,
                  including   satisfaction   of   applicable   tax   withholding
                  requirements, which the Company deems necessary or appropriate
                  under any applicable law,  including without  limitation state
                  securities or "blue sky" laws.

         12.      NO OBLIGATION TO MAINTAIN RELATIONSHIP.

         The Company is not by the Plan or this Option obligated to continue the
Participant as an employee, director or consultant of the Company.

         13.      NOTICES.

         Any notices required or permitted by the terms of this Agreement or the
Plan shall be given by  recognized  courier  service,  facsimile,  registered or
certified mail, return receipt requested, addressed as follows:

If to the Company:       America Online, Inc.
                         22000 AOL Way
                         Dulles, Virginia  20166
                         Attn:  Senior Vice President of Human Resources

If to the Participant:   As set forth in the Notice

or to such other  address or  addresses  of which  notice in the same manner has
previously  been given.  Any such notice shall be deemed to have been given upon
the earlier of receipt,  one  business  day  following  delivery to a nationally
recognized overnight courier service or three business days following mailing by
registered or certified mail.

         14.      GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, the Company's state of incorporation. The parties further
agree that any and all disputes  related to the subject matter of this Agreement
shall be  brought  only in the  United  States  District  Court for the  Eastern
District of Virginia (Alexandria Division), the forum encompassing the Company's
headquarters in all cases in which federal jurisdiction is proper.  Accordingly,
for all cases in which federal  jurisdiction is proper, the parties  irrevocably
submit to the  jurisdiction  of the United States District Court for the Eastern
District of Virginia (Alexandria Division), and irrevocably agree that venue for
any such  action  shall be in that Court  only.  For all cases in which  federal
jurisdiction is not proper,  the parties further agree that any and all disputes
related to the subject  matter of this  Agreement  shall be brought  only in the
Circuit Court for Loudoun County, Virginia

         15.      BENEFIT OF AGREEMENT.

         Subject to the provisions of the Plan and the other provisions  hereof,
this Agreement  shall be for the benefit of and shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.

         16.      ENTIRE AGREEMENT.

         This Agreement,  together with the Plan,  embodies the entire agreement
and understanding  between the parties hereto with respect to the subject matter
hereof and  supersedes all prior oral or written  agreements and  understandings
relating to the subject matter hereof. No statement,  representation,  warranty,
covenant or agreement not expressly set forth in this Agreement  shall affect or
be used to interpret,  change or restrict,  the express terms and  provisions of
this Agreement, provided, however, in any event, this Agreement shall be subject
to and governed by the Plan.

         17.      MODIFICATIONS AND AMENDMENTS.

         The terms and  provisions of this  Agreement may be modified or amended
as provided in the Plan.

         18.      WAIVERS AND CONSENTS.

         Except as  provided  in the Plan,  the  terms  and  provisions  of this
Agreement may be waived, or consent for the departure therefrom granted, only by
written document executed by the party entitled to the benefits of such terms or
provisions.  No such waiver or consent shall be deemed to be or shall constitute
a waiver or  consent  with  respect  to any other  terms or  provisions  of this
Agreement,  whether  or not  similar.  Each  such  waiver  or  consent  shall be
effective  only in the  specific  instance  and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

         19.      FORMATION; SEVERABILITY.

         If any provision of this Agreement (including any provision of the Plan
that is incorporated herein by reference) shall hereafter be held to be invalid,
unenforceable  or illegal,  in whole or in part, in any  jurisdiction  under any
circumstances  for any  reason,  (i) such  provision  shall be  reformed  to the
minimum extent  necessary to cause such provision to be valid,  enforceable  and
legal  while  preserving  the  intent of the  parties as  expressed  in, and the
benefits of the parties provided by, this Agreement and the Plan or (ii) if such
provision  cannot be so  reformed,  such  provision  shall be severed  from this
Agreement  and  an  equitable   adjustment  shall  be  made  to  this  Agreement
(including, without limitation, addition of necessary further provisions to this
Agreement)  so as to give effect to the intent as so expressed  and the benefits
so   provided.   Such  holding   shall  not  affect  or  impair  the   validity,
enforceability or legality of such provision in any other  jurisdiction or under
any other circumstances.  Neither such holding nor such reformation or severance
shall affect the legality,  validity or enforceability of any other provision of
this Agreement or the Plan.

                       FORM OF RESTRICTED STOCK AGREEMENT

         This  AGREEMENT  is made as of the ____  day of  ________  (the  "Grant
Date") by and between  America  Online,  Inc., a Delaware  corporation  having a
principal place of business in Dulles,  Virginia  ("AOL" or the "Company"),  and
______________ (the "Key Employee").

                               W I T N E S S E T H

         WHEREAS,  the  Company  has  made an  offer  of  employment  to the Key
Employee to be employed by AOL, which the Key Employee has accepted  pursuant to
the terms of an employment agreement dated  _________________,  (the "Employment
Agreement"),  and the Company desires to offer and grant to the Key Employee the
right to purchase shares of Company common stock,  par value $.01 per share (the
"Common  Stock"),  in accordance  with the terms and conditions  hereinafter set
forth;

         WHEREAS,  the Company  maintains  the America  Online,  Inc. 1999 Stock
Plan,  pursuant  to which it has the  right  to  grant  to key  employees  stock
purchase rights in connection with their hiring or for retention purposes;

         NOW,  THEREFORE,  in  consideration  of the  promises  and  the  mutual
covenants  contained herein and for other good and valuable  consideration,  the
parties hereby agree as follows:

         1. Terms of Purchase.  The Key Employee hereby accepts the offer of the
Company  to grant to the Key  Employee,  in  accordance  with the  terms of this
Agreement  and the  1999  Stock  Plan,  the  right  to  purchase  ______________
(_________)  shares of the  Company's  Common  Stock  (such  shares,  subject to
adjustment  pursuant to  Subsections  2(i) and (j) hereof,  the  "Shares")  at a
purchase price per share of one cent ($.01) (the "Purchase  Price"),  receipt of
which is hereby acknowledged by the Company.

         2.       Company's Lapsing Repurchase Right.

         (a) Lapsing Repurchase Right.  Except as set forth in Subsections 2(b),
2(c) and 2(d), in the event for any reason,  whether with or without  notice and
whether or not the Company or the Affiliate of the Company has acted lawfully in
terminating  the  employment,  the Key Employee  ceases to be an employee of the
Company or an Affiliate of the Company prior to the  ___________  anniversary of
the Grant Date, the Company or its designee  shall have the option,  but not the
obligation,  to purchase  from the Key Employee (or his  successor in interest),
and the Key Employee (or his  successor in interest)  shall be obligated to sell
to the  Company  or its  designee,  at a price per Share  equal to the  Purchase
Price,  all or any part of the Shares set forth in clauses  (i),  (ii) and (iii)
below (the "Lapsing Repurchase  Right").  The Company's Lapsing Repurchase Right
shall be valid for a period of six (6) months  commencing  with the date of such
termination.  Notwithstanding  any  other  provision  hereof,  in the  event the
Company is  prohibited  during such six (6) months from  exercising  its Lapsing
Repurchase  Right by Section  160 of the  Delaware  General  Corporation  Law as
amended  from time to time (or any  successor  provision),  then the time period
such Lapsing  Repurchase  Right may be exercised  shall be extended until twenty
(20) days after the Company is first not so prohibited.

                  (i) If such  termination  of  employment is prior to the _____
         anniversary  of the Grant Date,  the  Company  shall have the option to
         repurchase all of the Shares acquired by the Key Employee hereunder.

                  (ii) If such  termination  of  employment  is on or after  the
         ______  anniversary  of the  Grant  Date  and  prior  to the  _________
         anniversary  of the Grant Date,  the  Company  shall have the option to
         repurchase  __________  (rounded up to the nearest  whole number of the
         Shares;  if such termination of employment is on or after the _________
         anniversary of the Grant Date and prior to the ___________  anniversary
         of the Grant  Date,  the  Company  shall have the option to  repurchase
         __________  (rounded up to the nearest whole number) of the Shares,  as
         provided in this Agreement.

                  (iii)  Notwithstanding  anything to the contrary  contained in
         this Agreement,  except as otherwise provided in Subsection 2(b) below,
         in the event the Company or the Affiliate of the Company terminates the
         Key Employee's  employment for Cause (as defined below) or in the event
         the Company determines, subsequent to the Key Employee's termination of
         service  but  during  the ninety  (90) days  after the  termination  of
         service (or if the Key Employee  shall die during such  period,  during
         the one year period  following such termination of service) that either
         prior or subsequent to the Key Employee's  termination the Key Employee
         engaged in conduct that would constitute  Cause, the Company shall have
         the option to repurchase all of the Shares acquired by the Key Employee
         hereunder.

         (b) Effect of Termination for Disability or upon Death. Notwithstanding
the  provisions  of  clauses  (i),  (ii) and (iii)  immediately  above,  if such
termination  of  employment is as a result of the Key  Employee's  Disability or
death, then the Company's Lapsing Repurchase Right shall terminate,  and the Key
Employee's (or the Key Employee's Survivors') ownership of all Shares then owned
by him shall become vested.

         (c)  Effect  of  Termination   without  Cause.  The  Company's  Lapsing
Repurchase Right shall terminate, and the Key Employee's ownership of all Shares
then owned by him shall become  vested,  if the Company of the  Affiliate of the
Company terminates the Key Employee's  employment other than for Cause or if the
Officer  terminates  his employment  with the Company for Good Reason;  provided
that the  Officer  shall  deliver to the  Company a valid  release of all claims
against the Company.

         (d) Effect of Change in Control. The Company's Lapsing Repurchase Right
shall  terminate,  and the Key Employee's  ownership of all Shares then owned by
him shall become  vested,  in the event of a Change in Control upon the first to
occur of (x) the date the Lapsing  Repurchase Right otherwise  expires under the
terms of this  Agreement,  (y) the first  anniversary of the date such Corporate
Change in Control is determined to have  occurred,  and (z) the occurrence of an
Involuntary Employment Action.

         (e)  Closing.  In the event  that the  Company  exercises  the  Lapsing
Repurchase Right, the Company shall notify the Key Employee,  or, in the case of
his death,  his  representative,  in writing  of its  intent to  repurchase  the
Shares.  Such notice may be mailed by the Company up to and  including  the last
day of the time period provided for above for exercise of the Lapsing Repurchase
Right.  The notice  shall  specify  the place,  time and date for payment of the
repurchase price (the "Closing").  The date specified shall be not less than ten
(10) days nor more than sixty (60) days from the date of mailing of the  notice,
and the Key  Employee or his  successor  in interest  with respect to the Shares
which the Company elects to repurchase shall have no further rights as the owner
thereof  from and after the date  specified in the notice.  At the Closing,  the
repurchase  price shall be  delivered  to the Key  Employee or his  successor in
interest and the Shares being purchased,  duly endorsed for transfer,  shall, to
the extent that they are not in the  possession of the Company,  be delivered to
the Company by the Key Employee or his successor in interest.

         (f) Escrow.  The  certificates  representing all Shares acquired by the
Key  Employee  hereunder  which  from time to time are  subject  to the  Lapsing
Repurchase  Right shall be delivered  to the Company and the Company  shall hold
such Shares in escrow as provided in this Subsection 2(f).  Promptly following a
request from the Key Employee, the Company shall release from escrow and deliver
to the Key Employee a certificate for the number of Shares,  if any, as to which
the Lapsing  Repurchase  Right has lapsed.  In the event of a repurchase  by the
Company of Shares  subject to the Lapsing  Repurchase  Right,  the Company shall
release  from  escrow  and  cancel a  certificate  for the  number  of Shares so
repurchased. Any securities distributed in respect of the Shares held in escrow,
including, without limitation,  shares issued as a result of stock splits, stock
dividends or other  recapitalizations,  shall also be held in escrow in the same
manner as the Shares.

         (g)  Prohibition  on Transfer.  The Key Employee  recognizes and agrees
that all Shares  which are  subject to the Lapsing  Repurchase  Right may not be
sold,  transferred,  assigned,  hypothecated,  pledged,  encumbered or otherwise
disposed  of,  whether  voluntarily  or by  operation  of law (other than to the
Company or its  designee).  The Company  shall not be  required to transfer  any
Shares  on  its  books  which  shall  have  been  sold,  assigned  or  otherwise
transferred  in violation of this  Subsection  2(g), or to treat as the owner of
such  Shares,  or to accord the right to vote as such owner or to pay  dividends
to, any person or organization to which any such Shares shall have been so sold,
assigned or otherwise transferred, in violation of this Subsection 2(g).

         (h) In the event that the Key  Employee  or his  successor  in interest
fails to  deliver  the  Shares  to be  repurchased  by the  Company  under  this
Agreement,  the Company may elect (i) to establish a  segregated  account in the
amount of the  repurchase  price,  such  account  to be  turned  over to the Key
Employee or his  successor in interest  upon  delivery of such Shares,  and (ii)
immediately to take such action as is  appropriate  to transfer  record title of
such Shares from the Key  Employee to the Company and to treat the Key  Employee
and such  Shares in all  respects as if delivery of such Shares had been made as
required by this  Agreement.  The Key  Employee  hereby  irrevocably  grants the
Company a power of  attorney  which shall be coupled  with an  interest  for the
purpose of  effectuating  the preceding  sentence.  The Key Employee agrees as a
condition  to the  performance  by the Company of this  Agreement to execute and
deliver the Stock Power attached hereto as Exhibit A.

         (i) If the Company shall pay a stock  dividend or declare a stock split
on or  with  respect  to  any of  its  Common  Stock,  or  otherwise  distribute
securities  of the  Company to the  holders of its Common  Stock,  the number of
shares of stock or other  securities  of the Company  issued with respect to the
Shares then subject to the  restrictions  contained in this  Agreement  shall be
added to the Shares  subject to the Company's  rights of repurchase  pursuant to
this Agreement.  If the Company shall distribute to its stockholders  securities
of another  corporation,  the securities of such other corporation,  distributed
with  respect to the Shares then subject to the  restrictions  contained in this
Agreement,  shall be added to the  Shares  subject  to the  Company's  rights to
repurchase pursuant to this Agreement.

         (j) If the  outstanding  shares of the Company's  Common Stock shall be
subdivided  into a greater number of shares or combined into a smaller number of
shares, or in the event of a  reclassification  of the outstanding shares of the
Company's  Common  Stock,  or if the  Company  shall  be a  party  to a  merger,
consolidation  or capital  reorganization,  there shall be  substituted  for the
Shares then subject to the restrictions  contained in this Agreement such amount
and  kind  of  securities  as  are  issued  in  such  subdivision,  combination,
reclassification,  merger, consolidation or capital reorganization in respect of
the  Shares  subject  immediately  prior  thereto  to the  Company's  rights  of
repurchase pursuant to this Agreement.

          3. Legend.  All  certificates  representing the Shares to be issued to
the Key Employee pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows:

                  "The shares  represented  by this  certificate  are subject to
                  restrictions   set  forth  in  a  Restricted   Stock  Purchase
                  Agreement dated __________, with America Online, Inc., and the
                  America  Online,   Inc.  1999  Stock  Plan,  copies  of  which
                  Agreement and Plan are available for inspection at the offices
                  of the Company or will be made available upon request."

         4. Defined Terms.  Capitalized terms not otherwise defined herein shall
have the meanings set forth below or the meanings  ascribed to them in the Plan,
as applicable;  provided, however, that any terms defined herein and in the Plan
shall have the meanings set forth in this Agreement:

                  "Cause"  shall  mean (a) the Key  Employee's  conviction  of a
         felony involving moral turpitude, (b) his willful and continued failure
         substantially  to perform  his  required  duties  under the  Employment
         Agreement,   (c)  his   intentional   or  repeated   violation  of  the
         Confidentiality,  Non-Competition, and Proprietary Rights Agreement, or
         (d) his intentional or improper  conduct  substantially  prejudicial to
         the business of the Company or any of its affiliates.

                  "Corporate  Change in Control" shall have the meaning ascribed
              to it in the Plan,  except that the dates referred to in paragraph
              (2) of such  definition  shall be deemed  replaced  with the words
              "the Grant Date."

         5. Tax  Liability  of the Key  Employee  and Payment of Taxes.  The Key
Employee  acknowledges  and agrees  that any income or other  taxes due from him
with respect to the Shares issued pursuant to this Agreement, including, without
limitation,  the lapsing of the Company's right of repurchase,  shall be the Key
Employee's  responsibility.  Without  limiting the  foregoing,  the Key Employee
agrees that, to the extent that the lapsing of  restrictions  on  disposition of
any of the Shares or the  declaration of dividends on any such shares before the
lapse of such  restrictions on disposition  results in the Key Employee's  being
deemed to be in receipt of earned income under the  provisions of the Code,  the
Company  shall be entitled to  immediate  payment  from the Key  Employee of the
amount of any tax required to be withheld by the Company.

         6.  Securities Law  Compliance.  The Key Employee  represents  that any
sales of Shares at a time when the Key Employee may be deemed an  "affiliate" of
the Company for purposes of the  Securities Act of 1933, as amended (the "Act"),
shall be made in accordance with the  requirements of Rule 144 under the Act (or
any successor rule)  applicable to sales by an "affiliate" of shares  registered
under  the  Act or in a  transaction  otherwise  exempt  from  the  registration
requirements  of the Act and as to which the  Company  shall  have  received  an
opinion of counsel satisfactory to it confirming such exemption.

         7. Equitable  Relief.  The Key Employee  specifically  acknowledges and
agrees that in the event of a breach or threatened  breach of the  provisions of
this  Agreement,  including  the  attempted  transfer  of the  Shares by the Key
Employee,  monetary damages may not be adequate to compensate the Company,  and,
therefore,  in the event of such a breach or threatened  breach,  in addition to
any right to damages,  the Company shall be entitled to equitable  relief in any
court  having  competent  jurisdiction.  Nothing  herein  shall be  construed as
prohibiting the Company from pursuing any other remedies available to it for any
such breach or threatened breach.

          8. No  Obligation  to Employ.  The  Company  is not by this  Agreement
obligated  to continue  the Key Employee as an employee of the Company or of any
Affiliate of the Company.

          9.  Notices.  Any notices  required or  permitted by the terms of this
Agreement shall be given by recognized courier service,  registered or certified
mail,  return receipt  requested,  postage prepaid,  or facsimile,  addressed as
follows:

         If to the Company:

                  America Online, Inc.
                  22000 AOL Way
                  Dulles, Virginia  20166
                  Attention:  General Counsel

         If to the Key Employee:

                  to the Key Employee's last address as set forth in the records
                  of the Company,

or to such other  address(es)  of which notice in the same manner has previously
been given.  Any such notice  shall be deemed to have been given on the earliest
of  receipt,  one  (1)  business  day  following  delivery  by the  sender  to a
recognized  courier  service,  or three (3) business days  following  mailing by
registered or certified mail.

          10. Binding  Effect.  This  Agreement  shall be for the benefit of and
shall be binding upon the parties hereto,  upon their respective  successors and
assigns and upon the Key Employee's heirs, executors and administrators.

         11. Governing Law. This Agreement shall be governed by and construed in
accordance  with  the laws of the  State of  Delaware,  the  Company's  state of
incorporation.  The parties  further agree that any and all disputes  related to
the subject matter of this Agreement  shall be brought only in the United States
District Court for the Eastern District of Virginia (Alexandria  Division),  the
forum  encompassing  the  Company's  headquarters  in all cases in which federal
jurisdiction is proper. Accordingly, for all cases in which federal jurisdiction
is proper,  the parties  irrevocably  submit to the  jurisdiction  of the United
States  District  Court  for  the  Eastern  District  of  Virginia   (Alexandria
Division), and irrevocably agree that venue for any such action shall be in that
Court only.  For all cases in which  federal  jurisdiction  is not  proper,  the
parties further agree that any and all disputes related to the subject matter of
this  Agreement  shall be brought only in the Circuit Court for Loudoun  County,
Virginia.

         12.  Severability.  If any  provision  of this  Agreement is held to be
invalid  or  unenforceable  by a court  of  competent  jurisdiction,  then  such
provision or provisions  shall be modified to the extent  necessary to make such
provision valid and enforceable, and to the extent that this is impossible, then
such  provision  shall be deemed to be  excised  from  this  Agreement,  and the
validity, legality and enforceability of the rest of this Agreement shall not be
affected thereby.

         13. Entire Agreement.  This Agreement  constitutes the entire agreement
and understanding  between the parties hereto with respect to the subject matter
hereof and  supersedes all prior oral or written  agreements and  understandings
relating to the subject matter hereof. No statement,  representation,  warranty,
covenant or agreement not expressly set forth in this Agreement  shall affect or
be used to  interpret,  change or restrict the express  terms and  provisions of
this Agreement.

         14. Modifications and Amendments;  Waivers and Consents.  The terms and
provisions  of  this  Agreement  may  not  be  modified,  amended,  renewed,  or
terminated,  nor may any term,  condition  or breach of any term or condition be
waived,  except by a writing  signed by the person or persons sought to be bound
by such modification,  amendment,  renewal, termination or waiver. Any waiver of
any term,  condition or breach hereof shall not be a waiver of any other term or
condition or of the same term or condition for the future,  or of any subsequent
breach.

         15. Consent of Spouse. If the Key Employee is married as of the date of
this Agreement,  the Key Employee's  spouse shall execute a Consent of Spouse in
the form of Exhibit B hereto,  effective  as of the date  hereof.  Such  consent
shall not be deemed to confer or convey to the  spouse  any rights in the Shares
that do not otherwise exist by operation of law or the agreement of the parties.
If the Key Employee marries or remarries  subsequent to the date hereof, the Key
Employee  shall,  not later  than  sixty  (60) days  thereafter,  obtain  hisnew
spouse's  acknowledgement  of and consent to the existence and binding effect of
all  restrictions  contained in this  Agreement by such  spouse's  executing and
delivering a Consent of Spouse in the form of Exhibit B.

          16.  Counterparts.  This  Agreement  may be  executed  in one or  more
counterparts, and by different parties hereto on separate counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same instrument.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.

                                    AMERICA ONLINE, INC.

                                    By:
                                    Printed Name:
                                    Title:

                                    KEY EMPLOYEE:

                                    [Name]

                                    EXHIBIT A

                                   STOCK POWER

          For value  received,  I hereby sell,  assign,  and transfer to America
Online,  Inc.  ______________  shares of Common Stock of America  Online,  Inc.,
standing in the  undersigned's  name on the books and  records of the  aforesaid
Company, represented by Certificate No(s).  ___________________________,  and do
hereby  irrevocably  constitute  and appoint the Corporate  Secretary of America
Online, Inc. attorney,  with full power of substitution,  to transfer this stock
on the books and records of the aforesaid Company.

                              -----------------------------
                                          [Name]

Dated As Of:

______________,

In the presence of:

Printed Name:
             -----------------

                                    EXHIBIT B

                                CONSENT OF SPOUSE

         I, ,  spouse  of  _________________,  acknowledge  that I have read the
RESTRICTED STOCK AGREEMENT dated as of ___________________, (the "Agreement") to
which  this  Consent  is  attached  as  Exhibit B and that I know its  contents.
Capitalized  terms used and not defined herein shall have the meanings  assigned
to such terms in the  Agreement.  I am aware that by its  provisions  the Shares
granted  to my  spouse  pursuant  to the  Agreement  are  subject  to a  Lapsing
Repurchase  Right in favor of America  Online,  Inc. (the  "Company")  and that,
accordingly,  the Company has the right to repurchase up to all of the Shares of
which I may become possessed as a result of a gift from my spouse,  operation of
law or a court decree and/or any property settlement in any domestic litigation.

         I hereby agree that my interest,  if any, in the Shares  subject to the
Agreement shall be irrevocably bound by the Agreement and further understand and
agree that any  community  property  interest I may have in the Shares  shall be
similarly bound by the Agreement.

         I agree to the Lapsing  Repurchase Right described in the Agreement and
I hereby  consent to the repurchase of the Shares by the Company and the sale of
the  Shares  by my spouse or his legal  representative  in  accordance  with the
provisions  of the  Agreement.  Further,  as part of the  consideration  for the
Agreement,  I agree that at my death,  if I have not disposed of any interest of
mine in the Shares by an outright  bequest of the Shares to my spouse,  then the
Company shall have the same rights against my legal  representative  to exercise
its rights of  repurchase  with respect to any interest of mine in the Shares as
it would  have had  pursuant  to the  Agreement  if I had  acquired  the  Shares
pursuant to a court decree in domestic litigation.

         I AM AWARE THAT THE LEGAL,  FINANCIAL AND RELATED MATTERS  CONTAINED IN
THE  AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK  INDEPENDENT  PROFESSIONAL
GUIDANCE OR COUNSEL  WITH  RESPECT TO THIS  CONSENT.  I HAVE EITHER  SOUGHT SUCH
GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I
WILL WAIVE SUCH RIGHT.

         Dated as of the      day of                      .
                         ----        -------------------

        Printed name:-1-

                            SHARE PURCHASE AGREEMENT

                Made and entered into this 5th day of July, 2000

                                 by and between

Newtech Broadwidth Ltd.
a company duly registered under
the laws of the state of Delaware,
(hereinafter: the "Company")

                                                               of the first part

                                       and

Myriam Abitbol, Advocate
Yehuda Raveh & Co, Law Offices
America House.
35, Shaul Hamelech Blvd.
Tel-Aviv
Israel

As TRUSTEE on behalf of the shareholders

(hereinafter jointly and severally: the "Current Shareholders"
or "CSH")

                                                              of the second part

                                       and

Yellowave Corporation
a corporation registered under the
Laws of the State of Nevada
(hereinafter: "YWAV")
11777 San Vincente Boulevard
Suite 505
Los Angeles, California 90049

                                                               of the third part

                                   WITNESSETH:

WHEREAS        the   Company  is  creating   and   managing  a  network  of  TMT
               (Technology,   Media  and  Telecom)  companies   specializing  in
               broadband  applications  and the integration of new  technologies
               offered by interactive PC.TV,

<PAGE>

                                      -2-

               E.Commerce    IP   Content,    Advertising/Marketing,    Enabling
               Technologies  and the internet  economy,  including  reception of
               data and  television  program  channels  transmitted by satellite
               (ICOM4U) as well as a home server,  the U.P.A.H  Universal Player
               at Home (YOOPYAH), Fast Internet Solutions (FREE).

               The Company is the owner and/or  integrator  of the  technologies
               for ICOM4U,  U.P.A.H  Universal Player at Home (YOOPYAH) and Fast
               Internet Solutions (FREE). The Company commits itself to bring to
               YWAV  agreements  with NDS,  National Semi  Conductors  Quantum &
               Philips.

AND
WHEREAS        the Current  Shareholders  own all of the issued and outstanding
               shares of the Company;

AND
WHEREAS        YWAV and the CSH deem it desirable and in their  respective  best
               interests  for YWAV to acquire  from the CSH all of the shares of
               the  Company, and in  consideration  to  transfer 7,425,000  YWAV
               Shares  which  represent  about 75% of the share  capital and all
               respective  rights  of YWAV  including  shares  outstanding,  and
               4,140,000 YWAV Options, as defined hereinbelow,  to the  CSH, all
               upon the terms and conditions set forth herein;

NOW,  THEREFORE in  consideration  of the premises and mutual  covenants  herein
contained, the Parties agrees as follows:

1.  Preamble and Annexes

    The  preamble  to this  Agreement  and all Annexes  attached  hereto form an
    integral part hereof.

2.  Definitions

    Capitalized  terms,   unless  otherwise  defined  herein,   shall  have  the
    respective meaning ascribed to them hereunder:

    2.1     the "Agreement" --- this Agreement.

    2.2     the  "Closing"--   the  closing  of  the  transaction   contemplated
            hereunder, as provided in Section 3.3 hereinbelow.

    2.3     the  "Company's  Business" -- creating and managing a network of TMT
            (Technology,  Media and Telecom) companies specializing in broadband
            applications  and the  integration  of new  technologies  offered by
            interactive PC.TV,  E.Commerce, IP  Content,  Advertising/Marketing,
            Enabling Technologies and the

<PAGE>

                                      -3-

    internet  economy,  including  reception  of  data  and  television  program
    channels  transmitted  by satellite  (ICOM4U) as well as a home server,  the
    U.P.A.H  Universal  Player at Home  (YOOPYAH), and Fast  Internet  Solutions
    (FREE).

    2.4     "Companies Law" -- the United States Law.

    2.5     "Dollar(s)" or "$" -- United States Dollars.

    2.6     "Intellectual  Property"  --  all  registered  patents,  copyrights,
            trademarks,   trade  names,  service  marks,   designs,   logos  and
            applications  thereof,   technology, know-how,   inventions,   trade
            secrets, designs, process and technical data and information, or any
            other type of proprietary intellectual property rights, if any.

    2.7     "Interested  Party"-- any  interested  person  within the meaning of
            such term under the US Companies Law.

    2.8     "Products" products developed by the Company.

    2.9     "Securities"   --  securities  of  any  kind,   including,   without
            limitation,  shares of any  class,  options,  warrants,  convertible
            debentures  or any rights to  subscribe  for,  purchase of otherwise
            acquire shares of any class in any manner.

    2.10    the "VWAV  Shares" -- Shares of YWAV, to be  transferred  to the CSH
            according to the provisions of Sections 3.2 and 3.3 hereinbelow

3.  Purchase and Sale of the Company Shares

    3.1     Purchase and Sale of Shares
            Subject  to the  terms  and  conditions  of this  Agreement,  and in
            reliance on the representations, warranties and agreements contained
            herein,  at the Closing,  the CSH shall sell,  assign,  transfer and
            deliver  to YWAV all of the  issued  share  capital  of the  Company
            (hereinafter:  the  "Company  Shares")  and YWAV shall  purchase the
            Company Shares from the CSH in consideration for the issuance of the
            YWAV Shares.

            Each of the CSH  shall  sell  YWAV all its  Ordinary  Shares  of the
            Company of $ 0.01 par value each (hereinafter: the "Shares").

    3.2     Issuance of the YWAV Shares
            YWAV will issue to the CSH YWAV  Shares on the date of the  Closing,
            being a total of 7,425,000  (seven  million four hundred twenty five
            thousands)  shares  which  will  represent  about  75% of the  share
            capital  and  all  respective   rights  of  YWAV  including   shares
            outstanding  as of the closing, with  restrictions  of 6 months from
            the closing on the  transfer of the first 10% of such shares of CSH,
            and the  balance  of 90% of the  shares of CSH can be sold after one
            year from closing  according to regulations  imposed by SEC, NASDAQ,
            AMEX  and  NASD.  YWAV  will  issue  to the CSH  option  to  acquire
            4,140,000 (four million one hundred and forty  thousands)  shares of
            YWAV at prices equal to those Mr. Roni Oren and Mrs. Laura Ballegeer
            hold as described in Annex A.

<PAGE>

                                      -4-

    3.3     The Closing
            3.3.1 The Closing of the transactions contemplated herein shall take
                  place at the offices of Yehuda Raveh & CO Law Offices, on July
                  15, 2000 at 11:00 a.m., or at such other time and/or  place as
                  may be agreed upon in writing by the Parties

    3.3.2         At the  Closing  --  provided  that the  Company, YWAV and the
                  CSH  have  complied with all  their covenants and undertakings
                  set forth in Sections 8 hereinbelow and in this Section 3, but
                  subject  to the  Parties'  right  to  close  disregarding  any
                  failure,   as  Provided   under  section  3.33  hereunder  the
                  following  actions  will be taken and shall be  considered  as
                  taken simultaneously:

            (a)   the  Company  and  the CSH  shall  deliver  to YWAV a  written
                  confirmation in the form attached hereto as Annex I confirming
                  and  certifying:   (i)  that  all  their  representations  and
                  warranties set forth in Sections 4 & 5 are true and correct as
                  of  the   Closing,   with  the  same  effect  as  though  such
                  representations  and warranties had been made on and as of the
                  date of the Closing (subject to changes which were notified in
                  writing to YWAV under Section 8.6 hereinbelow);  and (ii) that
                  the Company and the CSH have  performed  and complied with all
                  of their  undertakings and obligations set forth under Section
                  8  herein;  (iii)  that  all  authorizations,   approvals  and
                  consents  as set forth  under  Section  4.4  hereinbelow  were
                  obtained.

            (b)   The CSH shall  transfer  shall of the Company  Shares to YWAV,
                  and shall deliver to YWAV duly executed  share  transfer deeds
                  and  share  certificates  in  YWAV's  name,  representing  the
                  Company Shares sold and transferred to YWAV hereunder

            (c)   The  Company  shall  deliver  to YWAV:  (i) a true copy of the
                  corporate   approval  and   authorization  of  the  execution,
                  delivery and  performance by the Company of this Agreement and
                  the  consummation  of the  transactions  contemplated  herein,
                  including  the  approval  of the  Board  of  Directors  of the
                  Company to the sale and transfer of the Company Shares to YWAV

            (d)   Each of the  CSH  shall  have  waived  their  right  of  first
                  refusal, and any other rights (with the exception of the right
                  to receive the YWAV Shares as  specified in Section 3.2 above)
                  with  respect  to  the   execution   and   implementation   of
                  transactions  contemplated hereby, and shall have executed the
                  letter in the form attached hereto as Annex 2.

            (e)   YWAV  shall   deliver  to  the   Company  and  CSH  a  written
                  confirmation in the form attached hereto as Annex 3,

<PAGE>

                                      -5-

                  confirming and  certifying:  (i) that all its  representations
                  and  warranties  set forth in  Section  7 herein  are true and
                  correct as of the Closing, with the same effect as though such
                  representations  and warranties had been made on and as of the
                  date of the  Closing  and (ii)  that  YWAV has  performed  and
                  complied with all of their  undertakings  and  obligations set
                  forth  under  Section 8 herein;  and (iii)  that all  required
                  authorizations,  approvals  and  consents  as set forth  under
                  Section 7.4 hereinbelow were obtained.

            (f)   YWAV shall transfer the YWAV Shares to the CSH, as provided in
                  Section 3.2 above,  and shall  deliver to each of the CSH duly
                  executed share transfer deeds and share  certificates in their
                  names,  representing the number of shares  transferred to each
                  of them.

            (g)   YWAV  shall  further  deliver  to the  CSH a true  copy of the
                  corporate   approval  and   authorization  of  the  execution,
                  delivery and  performance  by YWAV of this  Agreement  and the
                  consummation   of  the   transactions   contemplated   herein,
                  including  the  approval  of the  Board of  Directors  of YWAV
                  including  the  transfer  of the YWAV  Shares to the CSH, in a
                  form satisfactory to CSWs counsel.

            (h)   YWAV shall further  deliver to the Company and CSH a copy of a
                  resolution  of a general  meeting of YWAV  appointing  Prosper
                  Abitbol as  Chairman & CEO, Eric  Benhamou,  Jacques Ben Ezra,
                  Myriam Abitbol and Laura  Ballegeer,  as directors of YWAV and
                  letters  of  resignation  from  Roni  Oren,  Laura  Ballegeer,
                  Richard Arons, Nir Natan, Eileen Hastings and Kalman Wiengrood
                  which  provide  for their  resignation  from  YWAV's  board of
                  directors, as specified in section 8.9 hereinbelow.

            (i)   YWAV  shall  further  deliver  written  notice by YWAV and all
                  shareholders  in YWAV  waiving any rights of first  refusal or
                  other similar rights in respect of the transfer of YWAV Shares
                  by YWAV to the CSH.

    3.3.3         Failure to fulfil  any of the  undertakings  and/or  covenants
                  required to be taken at or prior to the Closing, by any of the
                  Parties hereto, as set forth herein, shall constitute a breach
                  of the relevant Party, and shall entitle the other Party(ies),
                  at their sole  discretion,  without  derogating from any other
                  remedy or  relief  available  to them to:  (i)  terminate  the
                  Agreement  (in case of any  material  breach or an  immaterial
                  breach which was not  remedied  within  reasonable  time after
                  delivering  a notice  stating the breach);  (ii)  postpone the
                  Closing and reset it to such date at which the  failure  shall
                  have  been  remedied;  or (iii) to close in  disregard  of the
                  failure.

<PAGE>

                                      -6-

    3.3.4         Upon  the  occurrence,  prior  to or at  the  Closing,  of any
                  material change of events or conditions  which have a material
                  adverse  effect  the  condition  of  the  business  situation,
                  financially  or  otherwise,  of the  Company  or of  YWAV,  or
                  rendering  any  of the  representations  or  warranties  given
                  hereunder as the case may be, to be untrue or incorrect in any
                  material  way,  YWAV or the CSH, as the case may be,  shall be
                  entitled,   at  their  sole  discretion,   to  terminate  this
                  Agreement by giving written  notice to the other Parties.  The
                  Parties  hereby agree that in such event,  neither party shall
                  have any claims and/or demands  towards the other parties with
                  regard to the termination of the Agreement.

4.    Representations of the Company and the CSH

      The Company and each of the CSH, jointly and severally,  hereby represent,
      warrant and undertake  towards YWAV that the following is true and correct
      as of the date hereof

    4.1     Organization  and  Standing
            The Company is a private  company duly  incorporated,  organized and
            validly  existing  under  the laws of  Delaware.  A true copy of the
            Company's registration certificate is attached hereto as Annex 4

            No   proceeding   or   resolution   for   bankruptcy,   dissolution,
            liquidation,  winding-up,  appointment  of receiver  and/or  similar
            proceeding has been  instituted or taken by the Company,  and to the
            best of their  knowledge,  no such proceeding has been instituted or
            threatened against the Company.

    4.2     Authority
            The Company has full  corporate  power and  authority to enter into,
            execute and deliver this Agreement,  bind itself  hereunder,  comply
            with its  obligations  hereunder  and  consummate  the  transactions
            hereunder;  the  entering  into  and  the  execution,  delivery  and
            performance  by the Company of this  Agreement and the  transactions
            contemplated hereunder have been duly approved and authorized by all
            the required corporate actions, and this Agreement was signed by the
            Company's duly  authorized  representatives  and constitutes a valid
            and legally binding obligation on the Company.

    4.3     Absence of Conflict
            The  execution,  delivery and  performance  of this Agreement by the
            Company  will not conflict  with,  give rise to, or a result in, any
            breach  or  default  of  any  terms  of any  provision  of  law,  or
            regulation,  agreement, obligation,  commitment, ruling, judgment or
            order to which the  Company  is a party or by which the  Company  is
            bound,  including  under the  Company's  Memorandum  and Articles of
            Association;

    4.4     Required Consent
            No approval or consent from, nor any filing with, any person, entity
            or authority is required by the Company, for the execution, delivery
            and performance by it of this Agreement.

    4.5     Corporate Documents
            True copies of the Company's  Memorandum and Articles of Association
            as in effect on the date hereof,  and of all minutes and resolutions
            (including  actions by

<PAGE>

                                      -7-

            written  consent)  of the Board of  Directors  of the  Company,  any
            committee thereof, and of the shareholder of the Company,  since the
            date of its corporation through the date hereof, are attached hereto
            as Annex 5

            All the Company's  resolutions have been duly approved and accepted,
            and the  Company  has filed  with the  Registrar  of  Companies  all
            reports, notices and other documents required to be so filed.

    4.6     Capitalization
            (a)   The capitalization table attached hereto as Annex 6 sets forth
                  the Company's authorized share capital, its issued and paid-up
                  share capital,  the registered  holders  thereof all as of the
                  date hereof and immediately prior to the Closing.

            (b)   Subject  to Section  4.7  below,  except for (i) the rights of
                  pre-emption and first refusal under the Company's  Articles of
                  Association;  (ii) the  rights of YWAV  hereunder   above;  no
                  person or entity has any agreement,  option,  right (including
                  conversion  rights,  preemptive  rights  and  rights  of first
                  refusal) or warrant for the subscription,  allotment, issue or
                  purchase of any of the Company's Shares or other Securities of
                  the  Company,  nor is the Company or any of the CSH a party to
                  any  undertaking  of any kind,  towards  any person or entity,
                  regarding  any  shares  or other  Securities  of the  Company,
                  whether purchased from the Company or from the CSH.

    4.7     Share Option Plan
            The Company doesn't have any share option plan.

    4.8     Directors
            The  Company's  board of  directors  consists of 2 members:  Prosper
            Abitbol, Chairman and CEO and Eric Benhamou.

    4.9     Subsidiaries
            The  Company  does  not  hold  any  shares  in  any  joint  venture,
            partnership or similar arrangement.

    4.10    Contracts and other Commitments

            (a)   The Company is not a party to and is not bound by any material
                  agreement,  contractual  obligation  or commitment of any kind
                  whatsoever,  and has not given any  power of  attorney  to any
                  person or entity for any purpose whatsoever.  Furthermore, the
                  Company  is not a  party  to any  negotiation  with a view  to
                  executing any agreement, contractual obligation or commitment,
                  and no proposed transaction exists.

            (b)   All aforesaid  agreements,  obligations and commitments are in
                  full force and effect, the Company is not in default under any
                  of them,  nor is the  Company  or any of the CSH  aware of any
                  breach by any other party thereto or of any possible premature
                  termination of any of them.

    4.11    Related Parties Transactions

<PAGE>

                                      -8-

            (a)   Neither the CSH  no other  Interested  Party of the Company or
                  affiliate of  the Company, is indebted to the Company,  nor is
                  the Company  indebted (or committed to make loans or guarantee
                  credit) to any of them.

            (b)   Except Mr. Eric Benhamou,  neither the CSH, and to the best of
                  their  knowledge,  nor  any  other  Interested  Party  of  the
                  Company,  has any direct or indirect ownership interest in any
                  entity  (whether  corporate  or not) with which the Company is
                  affiliated   or  with  which  the   Company   has  a  business
                  relationship  or any entity  (whether  corporate  or not) that
                  competes with the Company.  Furthermore,  neither the CSH, and
                  to  their  best  knowledge,  nor any  Interested  Party of the
                  Company,   is  directly  or  indirectly,   interested  in  any
                  agreement  or  transaction   made,   proposed,   or  currently
                  contemplated to be made by or with the Company, and except for
                  their ownership interest in their shares in the Company and by
                  virtue thereof, they have no ownership interest or other right
                  in any of the Company's business or property.

            (c)   the Company is not a party to any agreement  with,  nor is the
                  Company  obligated  or  committed to any of the CSH, any other
                  Interested Party of the Company,  or affiliate of the Company,
                  nor does any proposed transaction with any of them exist.

    4.12    Litigation

            (a)   There  are no  legal  or  administrative,  actions,  suits  or
                  proceedings,  pending, threatened, filed, or authorized by the
                  Company,  nor docs the Company  have any  intention  of filing
                  any.  Furthermore,  there have not been and there are no regal
                  or   administrative,    actions,    suits,    proceedings   or
                  investigations  pending or threatened against the Company,  or
                  any such which are related in any way to the Company or to the
                  Company's  Business - against  the CSH,  or against any of its
                  office  holders - in their  capacity as such,  and neither the
                  Company  nor the CSH know of any fact  which may result in any
                  such proceedings.

            (b)   There  are  no  valid  or  existing   court  or   arbitration,
                  judgments, or orders against the Company, or any of its office
                  holders  (in their  capacity  as such),  or with regard to the
                  Company -- against any of the CSH.

    4 13    Intellectual Property Rights
            it is hereby declared that the Company owns any and all Intellectual
            Property  which is used and/or  developed  by the Company  and/or is
            necessary  for its  business as  conducted on the date hereof and --
            subject to further  research and -- development  activities -- which
            is  necessary  for its  business,  except for  existing  proprietary
            technologies,  which belong to their respective owners and have been
            integrated into the Company's Products (hereinafter:  the "Company's
            Intellectual Property");  (ii) no Company's Intellectual Property is
            subject to any law, judgment, decree, outstanding order or agreement
            restricting the use or licensing thereof, (iii) no person, including
            without  limitation any of the CSH or any director of the Company,
            other than the Company,  has any ownership right,  title,  interest,
            claim in or lien on any of the Company's Intellectual Property;

    4.14    Absence of undisclosed Liabilities

<PAGE>

                                      -9-

            The  Company  and the CSH are not  aware of any  liabilities  of the
            Company of any nature,  whether  accrued,  absolute,  contingent  or
            otherwise, including without limitation, tax liabilities.

    4.15    Permits and Licenses
            The Company does not require any licenses or permits for the conduct
            of its business as now being conducted by it.

    4.16    Compliance with other Instruments
            The Company is not in default or  violation of any term or provision
            of its Memorandum and Articles of Association, or of any order, law,
            statute, rule or regulation to which it is subject.

    4.17    Taxes
            The Company has duly filed all tax returns and all other tax reports
            which it is required to file, and has paid in full,  all taxes,  and
            other charges due or claimed to be due by any taxing authority.  All
            such tax returns and  reports are correct and  accurate  and are not
            subject to any dispute with the tax authorities.

    4.18    Brokerage
            No agent or  broker  or any  other  person  or  entity  acting  in a
            similar  capacity  on behalf or under the  authority  of the Company
            is, or will be  entitled to  any  broker's  or finder's  fee, or any
            other similar  commission or fee in connection with the transactions
            contemplated  hereby,  except  for Manor  Gindi who is  entitled  to
            receive 187,500 YWAV Shares as broker's fee.

5   Further Representations is of the CSH

    Each of the CSH hereby further  represents and warrants toward YWAV that the
    following is true and correct as of the date hereof:

    5.1     Organization and Standing (in the event of a corporate  shareholder)
            It is an entity duly  organized and validly  existing under the laws
            of the State of its  incorporation.  No proceeding or resolution for
            bankruptcy, dissolution,  liquidation,  winding-up, appointment of a
            receiver  and/or similar  proceeding has been instituted or taken by
            it, and, to the best of  its knowledge,  no such proceeding has been
            instituted or threatened against it.

    5.2     Authority
            It has the full  power and  authority  to enter  into,  execute  and
            deliver  this  Agreement,  bind  itself  hereunder,  comply with its
            obligations hereunder and consummate the transactions hereunder; and
            -- in the event of a corporate shareholder -- the entering  into and
            the execution,  delivery and performance by it of this Agreement and
            the transactions  contemplated hereunder have been duly approved and
            authorized by all the required corporate actions, and this Agreement
            was signed by its duly authorized  representatives and constitutes a
            valid and legally binding obligation on it.

<PAGE>

                                      -10-

    5.3     No Competition
            It has no direct or indirect interest in any corporation or business
            which  competes  with the Company's  Business,  whether as an owner,
            shareholder  of more than five percent (5%) of a company,  director,
            partner, principal, agent, consultant, financial supporter, adviser,
            employee, employer,  manager, other Office Holder or otherwise -- in
            each case whether alone or together with others. The above shall not
            apply to Mr. Eric Benhamou.

    5.4     Absence of Conflict
            The  execution,  delivery and  performance  of this Agreement by it,
            will not  conflict  with,  give rise to, or result in, any breach or
            default  of any  terms  of any  provision  of  law,  or  regulation,
            agreement,  obligation,  commitment,  ruling,  judgment  or order to
            which  it is a party or by which  it is  bound,  including -- in the
            event  of a  corporate  shareholder --  under  any of its  corporate
            documents.

    5.5     Required Consents
            No  approval  or consent  from any person,  entity or  authority  is
            required by it, for the execution, delivery and performance by it of
            this Agreement.

    5.6     Title to Shares
            It has full title and ownership to all the shares in the Company and
            such shares and his, rights with respect thereto,  are free from and
            clear  of  any  liens,  claims,   charges,   pledges,   attachments,
            encumbrances, interests or any other third party rights or claims of
            any type or  nature  whatsoever,  and  they  shall  remain  so until
            completion of the sale and transfer of the Company Shares to YWAV.

    5.7     Arrangements With Respect to Shares
            Except for the  provisions of this  Agreement,  it is not a party to
            any  agreement  or  obligation  which  relates  to its shares in the
            Company,  or with respect to any of the rights conferred upon him by
            virtue of such shares.

    6       All Relevant Information
            The Company and the CSH, jointly and severally, confirm toward YWAV,
            that the  representations and warranties set forth in Sections 4 and
            5 above, fully and accurately reflect the condition and state of the
            Company, with regard to the matters referred to therein, and, to the
            best of their knowledge, there is no material  information, required
            by  a  reasonable   investor  in  order  to  make  the  transactions
            contemplated hereunder, which is not specified therein.

    The  Company  and the CSH  shall  indemnify,  defend,  save  and hold  YWAV
    harmless  from and  against any and all losses,  demands,  claims,  actions,
    liabilities,  costs  and  expenses  (including  attorney's  fees)  suffered,
    imposed on or incurred by YWAV  directly or  indirectly  via the Company and
    the  CHS  as a  result  of or in  connection  with  a  breach  of any of the
    representations and warranties set out above.

7.  Representations of YWAV

    YWAV  hereby  represents  and  warrants  toward the  Company and the CSH the
    following  to be true and correct as of the date  hereof:

<PAGE>

                                      -11-

    7.1     Organization and Standing
            YWAV is an entity duly organized and validly existing under the laws
            of  the  State  of  Nevada.  A  true  copy  of  YWAV's  registration
            certificate is attached hereto as Annex 7.

            No   proceeding   or   resolution   for   bankruptcy,   dissolution,
            liquidation,  winding-up,  appointment of a receiver  and/or similar
            proceeding has been instituted or taken by YWAV, and, to the best of
            its knowledge,  no such proceeding has been instituted or threatened
            against it.

    7.2     Authority
            YWAV  has the full  corporate  power and  authority  to enter  into,
            execute and deliver this Agreement,  bind itself  hereunder,  comply
            with its  obligations  hereunder  and  consummate  the  transactions
            hereunder;  the  entering  into  and  the  execution,  delivery  and
            performance   by  it  of  this   Agreement   and  the   transactions
            contemplated  hereunder,  have been duly approved and  authorized by
            all the required corporate actions, and this Agreement was signed by
            its duly  authorized  representatives  and  constitutes  a valid and
            legally binding obligation on it.

    7.3     Absence of Conflict
            The execution, delivery and performance of this Agreement by it will
            be not  conflict  with,  give rise to, or result  in,  any breach or
            default  of any  terms  of any  provision  of  law,  or  regulation,
            agreement,  obligation,  commitment,  ruling,  judgment or order, to
            which it is a party or by which it is  bound,  including  under  its
            Memorandum of Articles of Association.

    7.4     Required Consents and Payments
            No approval or consent from any person,  entity or authority  and no
            payment  in terms of  capital  gains tax is  required  by it for the
            execution, delivery and performance by it of this Agreement.

    7.5     Corporate Documents
            True copies of its  Memorandum  and  Articles of  Association  as in
            effect  on the  date  hereof,  and of all  minutes  and  resolutions
            (including   actions  by  written  consent)  of  the  its  Board  of
            Directors,  any committee thereof,  and its shareholders,  since the
            date of its corporation through the date hereof, are attached hereto
            as Annex 8.

            All of its resolutions have been duly approved and accepted,  and it
            has filed with the Registrar of Companies  all reports,  notices and
            other documents required to be so filed.

    7.6     Capitalization

            (a)   The capitalization table attached hereto as Annex 9 sets forth
                  the YWAV's authorized share capital, its issued,  allotted and
                  paid-up share capital,  the registered  holders thereof -- all
                  as of the date hereof and immediately prior to the Closing.

<PAGE>

                                      -12-

            (ii)  Subject to the rights of the CSH, YWAV hereby declares that no
                  person or entity has any agreement,  option,  right (including
                  conversion  rights,  preemptive  rights  and  rights  of first
                  refusal) or warrant for the subscription,  allotment, issue or
                  purchase of any of the YWAV's  Shares or other  Securities  of
                  YWAV,  nor is YWAV a party  to any  undertaking  of any  kind,
                  towards any person or entity,  regarding any shares,  options,
                  or other  Securities  of YWAV,  except as detailed in Annex 10
                  attached hereto. Annex 10 shall include names of Owners of the
                  abovementioned  rights,  expiration dates of such rights,  the
                  price of realization  of such rights and so forth.  Concurrent
                  with the closing of this  agreement,  the options of Roni Oren
                  and Laura  Ballegeer  shall be exercised.  Further,  YWAV will
                  register  the  underlined   shares  granted  pursuant  to  the
                  exercised  options.  For  the  avoidance  of any  doubt,  this
                  options  exercise  does not affect the number and the value of
                  the options granted to CSH according to Section 3.2 hereabove.

    7.7     Share Option Plan
            YWAV hereby  declares that no options to employees were issued under
            any share  option  plans,  and no  resolutions  with respect to such
            issuance  have been  adopted by the  Company,  except as detailed in
            Annex 10 attached hereto.

    7.8     Directors
            YWAV's board of directors Consists of 6 members, it is hereby agreed
            that upon the Closing, the above directors shall provide the Company
            with  letters of  resignation  from YWAV's  board of  directors  and
            Prosper  Abitbol as Chairman & CEO Eric Benhamou,  Jacques Ben Ezra,
            Myriam Abitbol and Laura  Ballegeer  shall be appointed as directors
            in their place.

    7.9     Subsidiaries
            YWAV does not hold any shares in any joint  venture,  partnership or
            similar arrangement.

    7.10    Contracts and other Commitments
            (a)   YWAV  is not a  party  to and is  not  bound  by any  material
                  agreement,  contractual  obligation  or commitment of any kind
                  whatsoever,  and has not given any  power of  attorney  to any
                  person or entity for any purpose whatsoever. Furthermore, YWAV
                  is not a party to any negotiation with a view to executing any
                  agreement,   contractual  obligation  or  commitment,  and  no
                  proposed transaction exists.

    7.11    Related Parties Transactions
            (a)   No other  Interested  Party of YWAV or affiliate  of YWAV,  is
                  indebted to YWAV,  nor is YWAV  indebted (or committed to make
                  loans or guarantee credit) to any of them.

            (b)   No  Interested  Party  of YWAV  has  any  direct  or  indirect
                  ownership  interest in any entity  (whether  corporate or not)
                  with  which  YWAV is  affiliated  or  with  which  YWAV  has a
                  business relationship or any entity (whether corporate or not)
                  that competes with YWAV.  Furthermore,  no Interested Party of
                  YWAV is directly or indirectly, interested in any agreement or
                  transaction made,  proposed,  or currently  contemplated to be
                  made by or with

<PAGE>

                                      -13

                  YWAV, and except for their ownership  interest in their shares
                  in YWAV and by virtue thereof, they have no ownership interest
                  or other right in any of YWAV's business or property.

            (c)   YWAV  is  not a  party  to any  agreement  with,  nor is  YWAV
                  obligated  or  committed  to any  Interested  Party of it,  or
                  affiliate of it, nor does any proposed transaction with any of
                  them exist.

    7.12    Litigation
            (a)   Except  as  provided  in  Annex  B,  there  are  no  legal  or
                  administrative   actions,   suits  or  proceedings,   pending,
                  threatened,  filed,  or authorized by YWAV, nor does YWAV have
                  any intention of filing any. Furthermore,  there have not been
                  and  there  are no  legal  or  administrative  actions,  suits
                  proceedings or  investigations  pending or threatened  against
                  YWAV,  or any such which are  related in any way to YWAV -- or
                  against  any of its  office  holders -- in their  capacity  as
                  such,  and YWAV does not know of any fact  which may result in
                  any such proceedings.

            (b)   There  are  no  valid  or  existing   court  or   arbitration,
                  judgments,  or  orders  against  YWAV,  or any  of its  office
                  holders (in their capacity as such).

    7.13    Title to Property Right
            YWAV has good and  valid  title  to,  and is the sole and  exclusive
            owner of, all rights,  title and  interests in and to its assets and
            properties  -- real and  personal,  tangib1e and  intangible -- free
            from all mortgages, pledges, liens, security interests,  conditional
            sale agreements  encumbrances  or other charges,  or any other third
            party right whatsoever.
            A list of YWAV's assets and properties and their  estimated value is
            detailed in Annex 11 attached hereto.

    7.14    Intellectual Property Rights
            It is  hereby  declared  that  YWAV  exclusively  owns  any  and all
            Intellectual  Property which is used and/or developed by YWAV and/or
            is  necessary  for its  business  as  conducted  on the date  hereof
            (hereinafter:   "VWAV's   Intellectual   Property");   (ii)   YWAV's
            Intellectual  Property is not subject to any law, judgment,  decree,
            outstanding  order or  agreement  restricting  the use or  licensing
            thereof, (iii) no person, including any director of YWAV, other than
            YWAV, has any ownership right, title, interest,  claim in or lien on
            any Of YVAV's Intellectual Property

    7.15    Financial Statements

            (a)   Annex 12 attached hereto consists of YWAV's audited  financial
                  statement of June 30, 1999 and unaudited financial  statements
                  for  the  period  ending  June  30,  2000,  signed  by  YWAV's
                  accountants  (hereinafter:  the "Financial  Statements").  The
                  Financial  Statements fairly present the financial  condition,
                  assets,  liabilities  and operating  results of YWAV as of the
                  dates, and for the periods,  indicated therein,  and have been
                  prepared in  accordance  with  generally  accepted  accounting
                  principles in the state of  California  on a consistent  basis
                  through the periods indicated.

            (b)   Since the date of the Financial Statements there has not been:

<PAGE>

                                      -14-

                  (i)   any change in the assets  (including  YWAV's rights with
                        respect thereto),  liabilities,  financial condition, or
                        operating  results of YWAV,  from that  reflected in the
                        Financial  Statements,  except  changes in the  ordinary
                        course of business that have not been adverse, except as
                        detailed in Annex 13 prepared by YWAV at the closing.

                  (ii)  any damage,  destruction or loss, whether or not covered
                        by insurance  materially  and  adversely  affecting  the
                        business,  properties,  prospects or financial condition
                        of YWAV (as such business is presently  conducted and as
                        it is proposed to be conducted),

                  (iii) any  declaration  or payment of  dividends  or any other
                        distributions,

                  (iv)  any payment made to an Interested  Party or affiliate of
                        YWAV, except in the ordinary course of business.

    7.16    Absence of undisclosed Liabilities
            YWAV is not aware of any  liabilities  on its behalf of any  nature,
            whether  accrued,  absolute,  contingent  or  otherwise,   including
            without limitation tax liabilities,  liabilities to the stock market
            Securities authority  shareholders of YWAV banks, employees of YWAV,
            liabilities in terms  businesses sold by YWAV and other  liabilities
            to third  parties,  except is  provided  by the June 30th  Financial
            Statement as detailed in Annex 14.

    7. 17   Permits and Licenses
            YWAV does not require any licenses or permits for the conduct of its
            business as now being conducted by it.

    7.18    Compliance with other Instruments
            YWAV is not in default or  violation of any term or provision of its
            Memorandum  and  Articles  of  Association  or of  any  order,  law,
            statute, rule or regulation to which it is subject.

    7.19    Taxes
            YWAV has duly filed all tax returns and all other tax reports  which
            it is required to file, and has paid in full,  all taxes,  and other
            charges due or claimed to be due by -any taxing authority.  All such
            tax returns and reports are correct and accurate and are not subject
            to any dispute with the tax authorities.

    7.20    Employees
            (a)   Annex 15 attached  hereto contains a true and complete list of
                  the  names  of  YWAV'S  employees  and  each  such  employee's
                  position,  starting  employment date and monthly  salary;  the
                  terms  of  employment  of each  is as set  forth  under  their
                  respective  employment  agreements  true  copies of which have
                  been delivered to the Company and the CSH.

            (b)   YWAV  is in  compliance  in all  material  respects  with  all
                  applicable laws, policies,  procedures and agreements relating
                  to employment, terms and

<PAGE>

                                      -15-

                  conditions of  employment  and to the proper  withholding  and
                  remission to the proper legal  authorities,  including  social
                  and tax  authorities  of all sums required to be withheld from
                  employees or persons deemed to be employees  under  applicable
                  laws   including   social   and  tax  laws   respecting   such
                  withholding.

                  (iii) YWAV has paid in full to all of its employees all wages,
                        salaries,   commissions  bonuses,  benefits  and   other
                        compensation  due and  payable to such  employees  on or
                        prior to the  date  hereof  and  there  are no  disputes
                        pending between YWAV and any of its employees.

                  (iv)  As of closing  YWAV  shall have fired all its  employees
                        and  shall  have  fully  paid them  Severance  Payments,
                        except   for  Roni  Oren  and  Laura   Ballegeer   whose
                        Employment Agreements shall be cancelled without payment
                        of  Severance   Payment  and  shall  be  replaced   with
                        Consultancy  agreements  until June 2001 as  detailed in
                        Annex 16 attached hereto.

    7.21    Brokerage
            No agent or broker or any other person or entity acting in a similar
            capacity  on behalf or under  the  authority  of YWAV is, or will be
            entitled  to any  broker's or  finder's  fee,  or any other  similar
            commission or fee in connection with the  transactions  contemplated
            hereby,  except for Farelly S.A. who is entitled to receive  162,500
            YWAV Shares as broker's fee.

    7.22    YWAV Shares
            YWAV Shares  which shall be  transferred  to the CSH, at the Closing
            shall be duly authorized validly issued, fully paid,  non-assessable
            and  negotiable.  YWAV hereby  declares  that YWAV  Shares  shall be
            delivered to the CSH free of any ability, debt,  restriction,  lien,
            security (interest); collateral, charge, agreement for sale, adverse
            claim, easement, pledge, mortgage, attachment and any and all rights
            of first refusal, right of first offer,  shareholder's agreements or
            voting  rights/proxy  agreements,  powers of attorney or other third
            party rights.

    7.23    Cash Flow
            Annex 17  attached  hereto  consists  of cash  flow  report  of YWAV
            detailing  income and expenses to be spent by YWAV up until December
            2000.

    7.24    All material  information and documentation which would be necessary
            for a  reasonable person to evaluate the transaction contemplated by
            this  Agreement  has been  disclosed  and/or  will be  disclosed  as
            detailed  in  Annex  18 as of  closing  by YWAV to the  Company  and
            the CSH.

YWAV shall  indemnify,  defend,  save and hold the Company and the CSH  harmless
from and against  any and all losses,  demands,  claims,  actions,  liabilities,
costs and expenses (including attorney's fees) suffered,  imposed on or incurred
by the Company and the CSH directly or indirectly via YWAV as a result of or in
connection  with a breach of any of the  representations  and warranties set out
above.

<PAGE>

                                      -16-

8.    Covenants and Undertakings of YWAV the CSH and the Company an Prior to the
      Closing

      YWAV, the CSH and the Company, jointly and severally,  hereby covenant and
      undertake that as of date hereof, and until the Closing:

    8.1     none of the CSH  shall  sell or  transfer  any of its  shares in the
            Company or give any rights with respect thereto.

    8.2     the Company shall not issue any shares or other  Securities or grant
            any rights with respect to any shares or Securities.

    8.3     YWAV  shall not issue any  shares or other  Securities  or grant any
            rights  with  respect  to YWAV  shares  or  Securities.

    8.4     all the Company's  affairs shall be conducted in the ordinary course
            of its  business,  and the  Company  shall not take any  actions  or
            undertake any obligations  which might render the  representation or
            warranties  under  sections 4 and 5 herein to be untrue or incorrect
            in any way whatsoever,

    8.5     all YWAV's affairs shall be conducted in the ordinary  course of its
            business  and YWAV  shall  not take any  actions  or  undertake  any
            obligations  which might  render the  representation  or  warranties
            under  section  7  herein  to be  untrue  or  incorrect  in any  way
            whatsoever.

    8.6     the Company  shall  inform YWAV,  in writing,  of any meeting of the
            Company's  shareholders  and/or of the Company's Board of Directors,
            or of any committee  thereof,  at  least 72  (seventy-two)  hours in
            advance,  in order to allow an observer on behalf of  YWAV to attend
            such a meeting,  and  provide  YWAV with  copies of all  minutes and
            resolutions  thereof and of all actions in writing  made within this
            period, by the Company's shareholders and/or Board of Directors;

    8.7     YWAV shall  inform the  Company  and  the CSH,  in  writing,  of any
            meeting of YWAV's shareholders and/or its board of directors,  or of
            any committee thereof,  at least 72 (seventy-two)  hours in advance,
            in order to allow an  observer  on behalf of the Company and the CSH
            to attend such a meeting,  and provide the Company and the CSH  with
            copies of all minutes and resolutions  thereof and of all actions in
            writing made within this period, by YWAV's shareholders and/or board
            of directors;

    8.8     without   derogating  from  the  Parties'   obligations  under  this
            Agreement,  the  Company  and/or YWAV shall  notify  each other,  in
            writing, immediately upon the occurrence of any events or conditions
            which affect the  business or financial  situation of the Company or
            YWAV,  as  the  case  may  be,  or  otherwise   render  any  of  the
            representations  or warranties  given by the Company or YWAV, or the
            CSH, hereunder, to be untrue or incorrect.

    8.9     the  Directors  of YWAV shall  adopt a  resolution  with  respect to
            signatory  rights  of YWAV, effective  as of the  Closing,  and with
            respect to the  appointment  of directors in YWAV,  all in the forms
            attached hereto as Annex 19.

<PAGE>

                                      -17-

9.    Due Diligence Investigation

      The Parties agree that due  diligence,  shall be conducted the Company and
      the CSH (with  respect to YWAV) and by YWAV (with  respect to the Company)
      up and until the Closing.

      During  said  period,  the  parties  shall  mutually  provide  all and any
      assistance and information required for said due diligence by the parties.

      YWAV on the one hand and the  Company  and the CSH on the other,  may each
      terminate  this  Agreement  during said period,  by a 7 day prior  written
      notice,  in the event said party's findings  pursuant to the due diligence
      conducted  by it  indicate  an adverse  condition  which to such party was
      unaware  of prior to the date  hereof  or  contradictory  to such  party's
      representations  contained herein unless, during such seven (7) day notice
      period the other party offers a satisfactory solution to that finding.

      YWAV hereby declares that it has employed a scientist who has reviewed the
      Company's technologies and products to its full satisfaction.

10.   Confidentiality

      Each of the  Parties  will hold in strict  confidence  all  documents  and
      information  concerning  the  Company,  its  business,   financial  and/or
      commercial information, operations, sales, marketing, customers, suppliers
      and all information  pertaining Co any intellectual Property rights of the
      Company and any other  proprietary  information of the Company  whatsoever
      including,  without limitation, with respect to the Company's intellectual
      Property (all hereinafter  referred to as the "Confidential  Information")
      by taking all reasonable  measures to maintain the confidentiality of such
      Confidential  Information which will in no event be less than the measures
      they use to  maintain  the  confidentiality  of their own  information  of
      similar  importance.  Each of the Parties also  undertakes  not to use the
      Confidential Information in any way, directly or indirectly,  for purposes
      other than for the  Company  and/or for  fulfilling  its  obligations  and
      exercising  its rights under this  Agreement.  A Party may  disclose  such
      Confidential information, to its officers, directors, consultants, counsel
      and  their   representatives,   only  on  a  need  to  know  basis,  under
      confidentiality  obligation,  and  in  connection  with  the  transactions
      contemplated by this Agreement.

      The  obligations   hereunder  shall  not  apply  as  to  any  Confidential
      Information  which  is  proven  by the  party  receiving  the  information
      (hereinafter:  the  "Receiving  Party") to be: (i) known by the  Receiving
      Party  at the  time  of  receiving  such  information  without  breach  of
      confidentiality  undertaking and provided that such party has given notice
      to this  effect;  or (ii) in the  public  domain  through  no fault of the
      Receiving Party; or (iii) later acquired by the Receiving Party,  lawfully
      and without breach of confidentiality undertaking, from sources other than
      the  disclosing  party (such as  independent  development,  third parties,
      etc.), or  (iv) furnished by the disclosing party to third parties without
      restriction on disclosure.

      Disclosure  of any  Confidential  Information  pursuant to any  compelling
      judicial  or  administrative  order or  proceeding  or as required by law,
      shall not be deemed a breach hereof.

<PAGE>

                                      -18-

11.   Costs and Expenses related to this Agreement

      Each Party  shall bear and pay its own  expenses  in  connection  with the
      preparation and performance of this Agreement.

12    Government Law and Forum

      This Agreement, its interpretation,  validity and breach shall be governed
      by the laws of the USA. Any dispute or claim with respect thereto shall be
      submitted  to the  competent  courts  in USA,  which  shall  have sole and
      exclusive  jurisdiction in such matter to exclude the  jurisdiction of all
      other courts.

13.   Miscellaneous

   13.1     Further Cooperation
            The Parties  agree to execute  any and all  documents  necessary  in
            order to consummate implement and give full force and effect to this
            Agreement, and to all matters, things and transactions envisaged and
            contemplated  herein  including,  but not limited to,  filings  with
            governmental  or regulatory  bodies,  powers of attorney,  corporate
            resolutions  and  such  other  documentation  as may  be  reasonably
            necessary from time to time.

    3.2     No Partnership
            The Parties to this Agreement are independent contractors.  There is
            no relationship of partnership, joint venture, employment, franchise
            or agency between the Parties.  Neither Party will have the power to
            bind the other or incur  obligations  on the other's  behalf without
            the other's prior written consent, except with regard to the Company
            -- in the Parties capacity as authorized organs in the Company.

   13.3     Contradiction
            in case of any direct  contradiction  between the provisions of this
            Agreement  and the  Articles  of  Association  of the Company and of
            YWAV,  the  provisions  of  this  Agreement  shall  prevail  in  the
            relationship between the Parties hereto.

    3.4     Captions
            The captions of sections in this  Agreement are intended  solely for
            convenience,  and will have no significance in the interpretation of
            this Agreement.

   13.5     Counterparts
            This Agreement may be executed in any number of counterparts, and at
            one (1) or more times, each of which containing the signature of any
            of the  Parties,  shall  be  deemed  an  original,  but all of which
            together shall constitute one and the same instrument.

   13.6     Non-Assignability

<PAGE>

                                      -19-

            The  respective  obligations  and  rights of the  Parties  hereunder
            cannot be assigned,  transferred or otherwise conveyed,  without the
            prior written consent of the other Parties hereto.

   13.7     Validity
            In the event  wherein any  provision of this  Agreement is held by a
            competent  court to be  invalid  or  unenforceable,  for any  reason
            whatsoever,  all of the remaining  provisions contained herein shall
            remain in full force and effect and shall be binding on the  Parties
            without any change; furthermore if all or part of the obligations of
            the Parties  hereinabove  (including  those under Sections 18 and 19
            hereof)  shall be held to be invalid or  unenforceable  by reason of
            exceeding the extent  and/or scope  allowed by law,  such  exceeding
            obligation(s)  shall be reduced to the maximum  extent  and/or scope
            allowed by law.

   13.8     Waiver and Consent
            The failure of any Party at any time or times to require performance
            of any  provision  hereof  or to  enforce  any  right  with  respect
            thereto,  shall  in no manner  affect  the right of such  Party at a
            later time to enforce the same and shall in no way be  construed  to
            be a waiver of such provision or right.

   13.9     Amendments
            No  amendment  addition;  omission,  modification  or change to this
            Agreement  shall be valid  unless  drawn up in writing and signed by
            all of the parties.

  13.10     Entire Agreement
            This Agreement  fully  embraces the legal  relationship  between the
            Parties  including   their   relationship  as  shareholders  of  the
            Company,  and no  previous  agreements,  memorandum  of  agreements,
            letters,    negotiations    promises,    consents,     undertakings,
            representations,  warranties   or  documents   which  were  applied,
            exchanged,  or signed by or between any of the Parties  hereto prior
            to the signing of this Agreement shall have any force or effect.

            Without  derogating  from the above,  each of the CSH  confirms  and
            acknowledges  that  this  Agreement  supersedes  the  terms  of  any
            previous agreements between the Parties hereto (or any of them).

  13.11     Notices
            All notices given by one Party to the other  hereunder will be given
            in  writing,  and  will be  deemed  to have  been  delivered  to the
            addressee  immediately  upon their delivery if delivered by hand, or
            upon  transmission  if sent by facsimile  and confirmed by a machine
            printout,  or within  seven (7)  business  days after  being sent by
            mail, as per the addresses indicated  hereinbelow,  or to such other
            address or facsimile number as a party may thereafter give notice in
            writing, to the other parties of this Agreement.

            The Parties' addresses are as follows:

            The Company:
            Newtech Broadwidth Ltd.

<PAGE>

            a company duly registered under
            the laws of the state of Delaware,

            The CSH:
                  Myriam Abitbol, Advocate
                  Yehuda Raveh & Co, Law Offices
                  America House,
                  35, Shaul Hamelech Bvd.
                  Tel-Aviv
                  Israel

                  As TRUSTEE on behalf of the shareholders

            YWAV:
                  Yellowave Corporation
                  a corporation registered under the
                  Laws of the State of Nevada

In Witness  Whereof,  the Parties hereto have caused  this  Agreement to be duly
executed on the day and year first above written:

/s/ Prosper Abitbol
----------------------
Newtech Broadwidth LTD
     The Company

            By: Prosper Abitbol,
            Title: Chairman & CEO

<PAGE>

_______________________
The CSH

By: Myriarn Abitbol, Advocate
    Yehuda Raveh & Co, Law Offices
    America House,
    35, Shaul Hamelech Bvd.
    Tel-Aviv
    Israel

    Title: As TRUSTEE on behalf of the Company Shareholders

/s/ Roni Oren
----------------------------
Yellowave Corporation (YWAV)
a corporation registered under the
Laws of the State of Nevada

By:  Roni Oren
Title: Chairman

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}]]