Xalted Networks, Inc.: Exhibit 10.4 - Filed by newsfilecorp.com






Confidential

	SHARE EXCHANGE 
	AND 
	RESTRICTED STOCK PURCHASE AGREEMENT



     THIS Share Exchange and
Restricted Stock Purchase Agreement (this “Agreement”), dated as of
October 1, 2004 (the “Effective Date”), is made and entered into by and
among Xalted Networks, Inc. (“Xalted America”), a Delaware corporation,
Xalted Information Systems, Pvt., Ltd., (“Xalted India”), an Indian
corporation (the “Company”), Rajendra Manikonda (“Mr. Manikonda”),
an individual, and Pratap (Bob) Kondamoori (“Mr. Kondamoori”), an
individual. Mr. Kondamoori and Mr. Manikonda are hereinafter sometimes referred
to collectively as the “Shareholders” and individually as a
“Shareholder.” Xalted America, Xalted India, and the Shareholders are
hereinafter sometimes referred to collectively as the “Parties” and
individually as a “Party.” Capitalized terms used in this Agreement but
not defined herein shall have the meaning assigned to them in the Xalted SPA, as
defined below.

     WHEREAS, Xalted India has
authorized and issued a total of 1,445,000 shares (“Xalted India Shares”)
of its stock with a par value of Rs.10 (the “Xalted India Stock”);

     WHEREAS, Xalted India was
initially capitalized at 14,450,000 Rs.

     WHEREAS, the Shareholders
currently owns all of the outstanding Xalted India Shares of the Xalted India
Stock;

     WHEREAS, Mr. Kondamoori
currently owns 1,082,500 shares or 74.92% (the “Kondamoori Shares”) and
Mr. Manikonda owns 362,500 shares 25.08% (the “Manikonda Shares”) of the
Xalted India Shares.

     WHEREAS, the Shareholders
have previously signed a side letter, dated December 19, 2003, (the “Side
Letter”), which is attached hereto as Exhibit A, under which they agreed to
transfer all of the Xalted India Shares to Xalted America as soon as Indian law
permitted and appropriate regulatory approvals could be obtained by reimbursing
the Shareholders for certain documented loans made by them to Xalted India and
certain documented out-of-pocket costs incurred by them to organize Xalted India
plus 6% simple interest (the “Total Organizational Expenses”) into Series
CC Preferred Stock of Xalted America at $0.674 per share (the “CC
Stock”);

     WHEREAS, the Parties
hereto desire to have the Shareholders convert their Xalted India Shares into
the CC Stock with the same rights and privileges and under the same terms and
conditions for Series CC Preferred Stock, as set forth in the Series BB and CC
Stock Purchase Agreement executed by the Company and other entities on or about
February 10, 2004, as amended from time to time, (the “Xalted SPA”),
which is incorporated herein as though fully attached herein.

     WHEREAS, the Parties agree
that Mr. Manikonda is an Indian Resident and that Mr. Kondamoori is not an
Indian Resident for the purpose of the Foreign Investment Restriction and the
value of their Xalted India Shares is subject to different valuation
methodologies;

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     WHEREAS, the Parties agree
that the Total Organizational Expenses is currently $347,152.30.

     NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE 1.
EXCHANGE OF SHARES AND CLOSING

     1.1 Transfer of the Kondamoori
and Manikonda Shares. On the basis of the representations, warranties,
covenants and agreements set forth herein, Mr. Kondamoori agrees to and will
convey, transfer, assign and deliver to Xalted America at the Closing, as
hereinafter defined, good and marketable title to, free and clear of all liens
or restrictions of any kind (collectively, “Liens”), and Xalted America
agrees to and will acquire and accept from Mr. Kondamoori the Kondamoori Shares.
On the basis of the representations, warranties, covenants and agreements set
forth herein, Mr. Manikonda agrees to and will convey, transfer, assign and
deliver to Xalted America at the Closing, as hereinafter defined, good and
marketable title to, free and clear of all liens or restrictions of any kind
(collectively, “Liens”), and Xalted America agrees to and will acquire
and accept from Mr. Manikonda the Manikonda Shares. In addition to exchanging
its CC Stock for the Shareholder’s Xalted India Stock, Xalted America agrees to
pay the capital gains up to $50,000.00 (if any) that the Shareholders are
required to pay by the Indian government on the exchange of the stock based on
the applicable valuation required by the Indian government determined by Xalted
America’s financial consultant.

     1.2 Conversion of the
Conversion Amount into CC Shares. The Parties agree that the Total
Organizational Expenses shall be converted into CC Shares at $0.674 per share.
The Shareholders agree and acknowledge and the other Parties agree that Mr.
Kondamoori shall get 74.92% of the CC Shares and Mr. Manikonda shall get 25.08%
of the CC Shares upon conversion of the Total Loan. The Parties agree that
Xalted America shall issue a total of 515,063 shares of CC Shares to the
Shareholders with 385,885 shares of CC Shares to Mr. Kondamoori (the “Mr.
Kondamoori Shares”) and 129,178 shares of CC Shares to Mr. Manikonda (the
“Mr. Manikonda Shares”) at the Closing, as defined below. The Parties
further agree that the number of CC Shares may be adjusted in accordance with
the Adjustment set forth in Section 1.5 below. Notwithstanding anything to the
contrary, at the Company’s option, the Company may require Mr. Kondamoori and
Mr. Manikonda to transfer their Xalted India Shares to a Mauritius corporation,
which is currently being set up and will be wholly owned by the Company, and not
directly to the Company as specified above, at any time after the Effective Date
and prior to the end of the Escrow as defined in Section 2.3 below.

     1.3 Consideration. In
consideration for the transfer of the Kondamoori Shares, described above in
Section 1.1, the Shareholders shall receive at the Closing their Shares as set
forth above in Section 1.2. In consideration for the Xalted India Shares to be
received by Xalted America, Xalted America shall issue the CC Shares to Mr.
Kondamoori and Mr. Manikonda as 

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set forth above in Section 1.2. As further consideration,
Xalted America agrees to pay the capital gains up to $50,000.00 (if any) that
the Shareholders are required to pay by the Indian government on the exchange of
the stock based on the applicable valuation required by the Indian government
determined by Xalted America’s financial consultant.

     1.4 Closing. The closing
will take place on December 1, 2004 (the “Closing”). At the Closing,
Xalted America will issue to the Shareholders the CC Shares described above and
Mr. Kondamoori shall transfer the Kondamoori Shares to Xalted America and Mr.
Manikonda shall transfer the Manikonda Shares to Xalted America. The Parties
agree that the CC Shares, the Kondamoori Shares and the Manikonda Shares shall
be given to and escrowed by Xalted America’s General Counsel and Assistant
Secretary (the “Escrow”) and not given to the respective Parties until
the Valuation, the Tax Calculation and the Documentation, as set forth in
Section 1.5 below, have been completed and certified by the financial consultant
engaged by Xalted India and Xalted America, the Adjustment (if any), as
described in Section 1.5 below, has been made, and the Audit Committee of Xalted
America has authorized the transfer. 

     1.5 Valuation, Certification
and Adjustment. The Parties acknowledge and agree that the Kondamoori Shares
and the Manikonda Shares must be valued in accordance with Indian law and
regulations for the purpose of determining, inter alia, the value of such
stock and the capital gains tax (if any) owed by Mr. Kondamoori and Mr.
Manikonda (the “Tax Calculation”) on the exchange of the stock under the
terms and conditions of this Agreement (the “Valuation”). The Parties
further acknowledge and agree that the Total Organizational Expenses, pursuant
to the Side Letter, must be properly documented and supported by proper receipts
and cancelled checks (the “Documentation”). The Parties have engaged a
financial consultant to do both the Valuation and the Documentation and to
certify the results to the boards of both Xalted India and Xalted America. The
Parties agree that the CC Stock to be exchanged hereunder shall be reduced based
on the Documentation (the “Adjustment”) but in no event shall be
increased above the amounts set forth in Exhibit B. 

     1.6 Further Assurances;
Post-Closing Cooperation. Each Party hereto shall take such further action
and execute and deliver such further documents as may be reasonably requested by
any other Party in order to carry out the provisions and purposes of this
Agreement.

     1.7 The CC Stock. The CC
Stock shall have the same rights, preferences, privileges, and restrictions as
the Series CC Preferred Stock described in the Xalted SPA, the Related
Agreements, all of which are incorporated herein as though fully attached
hereto, as amended from time to time, and the Restated Certificate, which is
incorporated herein as though fully attached hereto. The CC Stock shall be
subject to the restrictions set forth in subsection 1.9 below, which the Parties
hereto believe and intend to be identical to the restrictions on the transfer of
Series CC Preferred Stock set forth in the Xalted SPA and the Related
Agreements. If there is an inconsistency between the restrictions set forth in
the Xalted SPA and this Agreement, the Parties agree that the restrictions in
the Xalted SPA shall prevail and be applicable to the CC Stock.

     1.8 Joinder to the Xalted SPA
and Related Documents. The Shareholders shall become “parties” to the Xalted
SPA and the Related Agreements and shall have the same rights 

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and obligations as the “Purchasers” and the “Investors” have in
the Xalted SPA and the Related Agreements. The Shareholders hereby joins in and
agrees to observe, perform and be bound by all of the provisions of, and the
Company agrees that the Shareholders shall have the rights ascribed to
“Additional Purchasers” and “Purchasers” in the Xalted SPA and to “Investors”
under the Related Agreements, as amended from time to time, including the
Restated Investors Rights Agreement, as amended from time to time, the Restated
Co-Sale Agreement, as amended from time to time, and the Restated Voting
Agreement, as amended from time to time. Without limiting the generality of the
foregoing, each Shareholder (as to itself) expressly joins in the
representations and warranties of the Investors set forth in Section 4 of the
Xalted SPA (collectively, the “Purchaser Representations”) and hereby represents
and warrants (as to itself) that, as of the date hereof, the Purchaser
Representations are, with respect to the Shareholder, true, complete and correct
in all material respects. The Company hereby consents to each of the
Shareholders joining as a party to the Xalted SPA and the Related Documents.
Each of the Shareholders, as to itself, acknowledges that it has been provided
with a copy of the Xalted SPA, the Related Agreements, and the Restated
Certificate.

     1.9    Restricted
Shares

     1.9.1 Securities Laws.
Xalted shall take such steps as are necessary to comply with all applicable
securities laws in connection with the Agreement. Shareholders shall use their
best efforts to assist Xalted as may be necessary to comply with such laws.

     1.9.2 Securities Act
Exemption. The Xalted Shares to be issued pursuant to this Agreement or the
Common Stock, which the Preferred Shares are convertible into, will not be
registered under the Securities Act. The Xalted Shares will be issued pursuant
to an exemption from registration.

     1.9.3 Restrictive Legends.
Each certificate representing the Xalted Shares issued hereunder and any other
securities issued in respect of the Xalted Shares upon any stock split, stock
dividend, recapitalization, merger, or similar event (unless no longer required
in the opinion of counsel for Xalted) shall be stamped or otherwise imprinted
with legends substantially in the following form:

“THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO XALTED THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

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ARTICLE 2.

REPRESENTATIONS AND WARRANTIES OF Xalted
America 

Except as set forth on the Schedule of Exceptions, Xalted
  America and Xalted India severally, but not jointly hereby represents and
  warrants to the Shareholders (as to itself, but not to the other) as
  follows:

     2.1 Organization. It is a
corporation duly organized and existing under, and by virtue of, the laws of the
State of California (as to SysteamUS) and Delaware (as to Xalted America). It
has the requisite corporate power to own and operate its properties and assets,
and to carry on its business as presently conducted and as proposed to be
conducted.

     2.2 Corporate Power. It
has all requisite legal and corporate power to execute and deliver this
Agreement, to issue and sell its Shares and to carry out and perform its
obligations under the terms of this Agreement.

     2.3 Authorization. All
corporate action on the part of it, its officers, directors and shareholders
necessary for the authorization, execution, delivery and performance by the it
of this Agreement, the authorization, sale, issuance and delivery of its Shares
and the performance of its obligations hereunder has been taken and the sale,
issuance and delivery of the its Shares and the execution, delivery and
performance of this Agreement will not violate the Company’s Bylaws or Articles
of Incorporation (the “Charter Documents”) or any of its material
agreements. This Agreement, when executed and delivered by it, shall constitute
a valid and binding obligation of it enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors (other than usury laws) and rules of law governing
specific performance, injunctive relief or other equitable remedies. Its Shares,
when issued in compliance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable, and will be free of any consensual liens
or encumbrances created by it , other than liens or encumbrances in connection
with this Agreement and related documents and agreements and the transactions
contemplated hereby; provided, however, that the its Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required at the time a transfer is proposed.

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF EACH
SHAREHOLDER

     Each Shareholder severally, but
not jointly, represents and warrants to Xalted America and Xalted India (as to
itself, but not to any other Shareholder) as follows:

     3.1 Ownership of Shares.
The Shareholder owns the Xalted India Shares set forth opposite its name on
Exhibit A free and clear of all Liens.

     3.2 Authorization; No
Violation. The Shareholder has full legal capacity, power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Shareholder and constitutes a legal, valid and binding obligation, enforceable
against the Shareholder in accordance with its terms. Neither the execution,
delivery and performance of this Agreement by the Shareholder nor the
consummation of any of the transactions provided for hereby will result in any
violation or breach of or default (or an event which with notice or the passage
of time or both would constitute a default) under any contract, franchise
or permit to which the Shareholder is a party, or by which the Shareholder is
bound.

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         3.3 Investment
  Representations

          (a) The
Shareholder has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to Xalted America so
that it is capable of evaluating the merits and risks of his or her investment
in Xalted America and has the capacity to protect its own interests in making
its investment in Xalted America;

          (b) The
Shareholder is an “accredited investor” as that term is defined in Rule 501 of
the Securities Act of 1933, as amended (the “Securities Act”).

          (c) The
Shareholder is acquiring the Xalted America Shares and, upon conversion of any
Preferred Shares, the Xalted America’s Common Stock underlying the Preferred
Shares for investment for its own account, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution thereof.
The Shareholder understands that the Xalted America Shares to be acquired
pursuant to this Agreement and the Common Stock underlying the Preferred Shares
have not been, and may not be registered under the Securities Act of 1933, as
amended (the “Securities Act”), by reason of a specific exemption from
the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of such Shareholder representations as expressed herein;

          (d) The
Shareholder acknowledges that the Xalted America Shares, the Preferred Shares
and the Common Stock underlying the Preferred Shares must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from such registration is available. The Shareholder is aware of the provisions
of Rule 144 promulgated under the Securities Act which permit limited resale of
shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
issuer, the resale occurring not less than one year after a party has purchased
and paid for the security to be sold, the sale being effected through a
“broker’s transaction” or in transactions directly with a “market maker” and the
number of shares being sold during any three-month period not exceeding
specified limitations;

          (e) The
Shareholder understands that no public market now exists for any of the
securities issued by Xalted America and that Xalted America has made no
assurances that a public market will ever exist for Xalted America’s
securities;

          (f) The
Shareholder has had an opportunity to discuss Xalted America’s business,
management and financial affairs with its management. The Shareholder has also
had an opportunity to ask questions of officers of Xalted America, which
questions were answered to its satisfaction. The Shareholder understands that
such discussions, as well as any written information issued by Xalted America,
were intended to describe certain aspects of the Xalted America’s business and
prospects but were not an exhaustive description;

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          (g) This
Agreement, when executed and delivered by the Shareholder, will constitute a
valid and legally binding obligation of the Shareholder, enforceable in
accordance with its terms, and subject to laws of general application relating
to bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies;

          (h)
Xalted America has not, and will not, incur, directly or indirectly, as a result
of any action taken by the Shareholder, any liability for brokerage or finders’
fees or agents’ commissions or any similar charges in connection with this
Agreement; and

          (i) The
Shareholder has reviewed with its own tax advisors the federal, state, local and
foreign tax consequences of this investment and the transactions contemplated by
this Agreement (including any tax consequences resulting from the recently
enacted tax legislation). It relies solely on such advisors and not on any
statements or representations of Xalted America or any of its agents. The
Shareholder understands that it (and not Xalted America) shall be responsible
for its own tax liability that may arise as a result of this investment or the
transactions contemplated by this Agreement.

ARTICLE 4.
CONDITIONS TO CLOSING OF THE
SHAREHOLDERS

Each Shareholder’s obligation to exchange Xalted India Shares
for Xalted America Shares at the Closing, except as specifically indicated
below, is subject to the fulfillment or waiver on or prior to the Closing Date
of the following conditions:

     4.1 Representations and
Warranties Correct. The representations and warranties made by Xalted
America and Xalted India in Article 2 hereof shall be true and correct in all
material respects on the Closing Date with the same force and effect as if they
had been made on and as of said date.

     4.2 Third Party Consents.
All necessary third party consents on the part of Xalted America, if any, and
SysteamUS, if any, shall have been obtained.

     4.3 Compliance with Federal
Securities Laws. The existence of a valid exemption to or compliance with
the registration requirement of the Securities Act.

     4.4 Blue Sky. Xalted
America and SysteamUS, if any, shall have obtained all necessary Blue Sky law
permits and qualifications, or secured an exemption therefrom, required by any
state in which the exchange of securities shall occur, except to the extent that
filings or other action may be taken after the Closing Date without jeopardizing
such exemptions.

     4.5 Xalted America Share
Certificates. The Shareholders shall have received Xalted America Stock
representing their respective shares as provided on Exhibit A hereto.

     4.6 Participation. All
Shareholders shall have executed this Agreement.

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ARTICLE 5.
CONDITIONS TO CLOSING OF COMPANY

     Xalted America’s obligation to
issue the Xalted America Shares at the Closing is subject to the fulfillment of
the following conditions:

     5.1 Xalted India Share
Certificates. Xalted America shall have received stock certificates of
Xalted India representing Xalted India Shares to be transferred at the Closing
pursuant to Exhibit A and such certificates shall have been duly endorsed
and transferred pursuant to and in accordance with all applicable federal and
state laws in favor of Xalted America such that Xalted America shall be the duly
registered owner of such Xalted India Shares.

     5.2 Compliance with Federal
Securities Laws. There is an exemption from or compliance with the
registration requirement of the Securities Act.

     5.3 Blue Sky. Xalted
America and SysteamUS, if any, shall have obtained all necessary Blue Sky law
permits and qualifications, or secured an exemption therefrom, required by any
state in which the exchange of securities shall occur, except to the extent that
filings or other action may be taken after the Closing Date without jeopardizing
such exemptions.

ARTICLE 6.
RESTRICTIONS ON TRANSFERABILITY;
SECURITIES ACT COMPLIANCE

     6.1 Securities Laws.
Xalted America shall take such steps as are necessary to comply with all
applicable securities laws in connection with the Agreement. Shareholders shall
use their best efforts to assist Xalted America as may be necessary to comply
with such laws.

     6.2 Securities Act
Exemption. The Xalted America Shares to be issued pursuant to this Agreement
or the Common Stock, which the Preferred Shares are convertible into, will not
be registered under the Securities Act. The Xalted America Shares will be issued
pursuant to an exemption from registration.

     6.3 Restrictive Legends.
Each certificate representing the Xalted America Shares issued hereunder and any
other securities issued in respect of the Xalted America Shares upon any stock
split, stock dividend, recapitalization, merger, or similar event (unless no
longer required in the opinion of counsel for Xalted America) shall be stamped
or otherwise imprinted with legends substantially in the following form:

“THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO Xalted America THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

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ARTICLE 7. 
MISCELLANEOUS

     7.1 Governing Law. This
Agreement shall be governed in all respects by the internal substantive laws of
the State of California, of the United States of America.

     7.2 Successors and
Assigns. Except as otherwise provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors and assigns of the
parties hereto, provided, however, that the rights of the Shareholders to
exchange their Subsidiary Shares for Xalted America Shares shall not be
assignable without the prior written consent of the Company.

     7.3 Entire Agreement;
Amendment. This Agreement and the exhibits hereto constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought.

     7.4 Notices, etc. All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by registered or certified mail, postage prepaid, or
otherwise delivered by hand or by messenger, addressed 

        
 (a) If to a Shareholder, at such Shareholder’s
address as such Shareholder shall have furnished to Xalted America, or 

          (b)
If to Xalted America as follows:

	 	Xalted America Networks, Inc. 
	 	82 Pioneer Way, Suite 114 
	 	Mountain View, CA 94041 
	 	Attn: Chief Legal Officer 


     7.5 Delays or Omissions.
No delay or omission to exercise any right, power or remedy accruing to the
Shareholders upon any breach or default of Xalted America under this Agreement
shall impair any such right, power or remedy of the Shareholders nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character by any Shareholder of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or by law or otherwise afforded to the
Shareholders, shall be cumulative and not alternative.

     7.6 Facsimile and
Counterparts. This Agreement may be signed by facsimile and executed in any
number of counterparts, each of which shall be an original and all of which
shall constitute one instrument.

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     7.7 Severability. In the
event that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided that no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.

     7.8 Binding Arbitration.
The Parties agree that any and all controversies or claims arising out of or
relating to this Agreement, or any alleged breach hereof, shall be resolved by
binding arbitration as prescribed herein. A single arbitrator shall conduct the
arbitration under the current rules of the American Arbitration Association
(“AAA”) and the provisions set forth herein. The arbitrator shall be
selected in accordance with the AAA procedures from a list of qualified people
maintained by the AAA. The arbitration shall be conducted in the city of San
Jose, California. All expedited procedures prescribed under the AAA rules shall
apply. There shall be no discovery other than the exchange of information, which
is provided to the arbitrators by the Parties. The arbitrator shall only have
authority to award compensatory damages and shall not have authority to award
punitive damages, other non-compensatory damages or any other form of relief.
Each Party shall bear its own costs and attorneys’ fees and disbursements. The
arbitrator’s decision and award shall be final and binding, and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. If any Party files a judicial or administrative action
asserting claims subject to arbitration, as prescribed herein, and another Party
successfully stays such action and/or compels arbitration of said claims, the
Party filing said action shall pay the other Party’s costs and expenses incurred
in seeking such stay and/or compelling arbitration, including reasonable
attorneys’ fees and disbursement.

     IN WITNESS WHEREOF, this
Agreement has been duly executed and delivered by the duly authorized officer of
each Party as of the Effective Date.

	Xalted America 	Mr. Kondamoori 
	  	  
	Signature: /s/ Christopher L. Rasmussen 	Signature: /s/ Pratap (Bob) Kondamoori 
	Name: Christopher L. Rasmussen 	Name: Pratap (Bob) Kondamoori 
	Title: VP-Law and General Counsel 	  
	  	  
	  	  
	Mr. Manikonda 	Xalted India 
	  	  
	Signature: /s/ Rajendra Manikonda 	Signature: /s/ Rajendra Manikonda 
	Name: Rajendra Manikonda 	Name: Rajendra Manikonda 
	  	Title: Managing Director 


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EXHIBIT A 
December 19, 1993 Side Letter

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EXHIBIT B 
STOCK OWNERSHIP

	  	  	Before Exchange 	After Exchange 
	  	  	XI1 Common 	XI Common 	XA2 CC 
	  	Shareholder 	  	  	  
	  	  	  	  	  
	1. 	Mr. Kondamoori	1,082,500 	0 	385,885 
	2. 	Mr. Manikonda 	362,500 	0 	129,178 
	3. 	Xalted America	0 	1,445,000 	   


______________________________________
1 XI is
Xalted India.
2 XA is Xalted America.

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