Document:

Exhibit 10.2
                          REGISTRATION RIGHTS AGREEMENT

         This  Registration  Rights  Agreement  (the  "Agreement")  is made  and
entered into as of this 31st day of March, 2005 by and among Ion Networks, Inc.,
a  Delaware  corporation  (the  "Company"),  and the  "Investors"  named in that
certain  Purchase  Agreement  by and among the  Company and the  Investors  (the
"Purchase Agreement").

         The parties hereby agree as follows:

         1. Certain Definitions.

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

         "Affiliate"  means, with respect to any person,  any other person which
directly or indirectly  controls,  is controlled  by, or is under common control
with, such person.

         "Business Day" means a day,  other than a Saturday or Sunday,  on which
banks in New York City are open for the general transaction of business.

         "Common Stock" shall mean the Company's  common stock, par value $0.001
per  share,  and any  securities  into  which such  shares  may  hereinafter  be
reclassified.

         "Investors"  shall  mean  the  Investors  identified  in  the  Purchase
Agreement  and any  Affiliate or permitted  transferee  of any Investor who is a
subsequent holder of any Warrants or Registrable Securities.

         "Prospectus"  shall mean the  prospectus  included in any  Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the  terms of the  offering  of any  portion  of the  Registrable  Securities
covered  by  such  Registration  Statement  and  by  all  other  amendments  and
supplements  to the  prospectus,  including  post-effective  amendments  and all
material incorporated by reference in such prospectus.

         "Register,"  "registered"  and  "registration"  refer to a registration
made by preparing  and filing a  Registration  Statement or similar  document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such Registration Statement or document.

         "Registrable  Securities"  shall mean (i) the Shares,  (ii) the Warrant
Shares and (iii) any other  securities  issued or issuable with respect to or in
exchange for Registrable Securities;  provided,  that, a security shall cease to
be a Registrable Security upon (A) sale pursuant to a Registration  Statement or
Rule 144 under the 1933 Act, or (B) such security  becoming eligible for sale by
the Investors pursuant to Rule 144(k).

         "Registration  Statement" shall mean any registration  statement of the
Company  filed  under  the  1933  Act  that  covers  the  resale  of  any of the
Registrable Securities pursuant to the provisions of this Agreement,  amendments
and  supplements  to  such  Registration  Statement,   including  post-effective
amendments,  all  exhibits and all  material  incorporated  by reference in such
Registration Statement.

         "Required  Investors"  means the  Investors  holding a majority  of the
Registrable Securities.

<PAGE>

         "SEC" means the U.S. Securities and Exchange Commission.

         "Shares"  means the  shares  of Common  Stock  issued  pursuant  to the
Purchase Agreement.

         "1933 Act" means the Securities Act of 1933, as amended,  and the rules
and regulations promulgated thereunder.

         "1934 Act" means the Securities  Exchange Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

         "Warrants"  means,  the  warrants  to purchase  shares of Common  Stock
issued to the Investors pursuant to the Purchase Agreement, the form of which is
attached to the Purchase Agreement as Exhibit A.

         "Warrant  Shares"  means the shares of Common Stock  issuable  upon the
exercise of the Warrants.

         2. Registration.

                           (a) Registration Statements.

                           (i)  Promptly  following  the closing of the purchase
and sale of the securities  contemplated by the Purchase Agreement (the "Closing
Date")  but no later  than  forty-five  (45) days  after the  Closing  Date (the
"Filing  Deadline"),  the  Company  shall  prepare  and  file  with  the SEC one
Registration  Statement on Form SB-2 (or, if Form SB-2 is not then  available to
the Company,  on such form of  registration  statement  as is then  available to
effect a registration for resale of the Registrable  Securities,  subject to the
Required Investors' consent),  covering the resale of the Registrable Securities
in an  amount  at  least  equal  to the  Shares  and the  Warrant  Shares.  Such
Registration Statement shall include the plan of distribution attached hereto as
Exhibit A. Such Registration Statement also shall cover, to the extent allowable
under the 1933 Act and the rules  promulgated  thereunder  (including Rule 416),
such  indeterminate  number of additional  shares of Common Stock resulting from
stock  splits,  stock  dividends  or similar  transactions  with  respect to the
Registrable  Securities.  The Company shall use its  reasonable  best efforts to
obtain from each person who now has  piggyback  registration  rights a waiver of
those rights with respect to the Registration Statement; provided, however, that
the Company  shall have the right to include in the  Registration  Statement the
shares of Common  Stock  described  in Schedule 1 hereto  (the "Other  Shares");
provided,  however,  that  Stephen M.  Deixler  agrees  pursuant to an agreement
reasonably satisfactory to the Investors not to sell or otherwise dispose of any
of the Company's 5% Convertible Debentures Due August 5, 2008 (the "Debentures")
or the shares of Common Stock issuable upon the conversion of the Debentures for
one year after the effective date of the Registration  Statement (the "Piggyback
Condition").  The  Registration  Statement  (and each  amendment  or  supplement
thereto,  and each request for acceleration of  effectiveness  thereof) shall be
provided in  accordance  with Section 3(c) to the  Investors  and their  counsel
prior to its filing or other submission.  If a Registration  Statement  covering
the  Registrable  Securities is not filed with the SEC on or prior to the Filing
Deadline,  the  Company  will  make  pro  rata  payments  to each  Investor,  as
liquidated  damages  and not as a  penalty,  in an  amount  equal to 1.5% of the
aggregate  amount  invested by such  Investor for each 30-day period or pro rata
for any portion thereof  following the Filing Deadline for which no Registration
Statement is filed with respect to the  Registrable  Securities.  Such  payments
shall be in partial compensation to the Investors,  and shall not constitute the
Investors' exclusive remedy for such events. Such payments shall be made to each
Investor in cash.

                                      -2-
<PAGE>

                           (ii) Upon the written demand of any Investor and upon
any change in the Warrant Price (as defined in the Warrant) such that additional
shares of Common Stock become  issuable upon the exercise of the  Warrants,  the
Company shall prepare and file with the SEC one or more Registration  Statements
on Form SB-2 or amend the  Registration  Statement  filed pursuant to clause (i)
above, if such Registration Statement has not previously been declared effective
(or,  if  Form  SB-2 is not  then  available  to the  Company,  on such  form of
registration  statement as is then available to effect a registration for resale
of such additional shares of Common Stock (the "Additional Shares"),  subject to
the Required  Investors'  consent) covering the resale of the Additional Shares,
but only to the extent the  Additional  Shares are not at the time covered by an
effective Registration Statement.  Such Registration Statement also shall cover,
to the extent allowable under the 1933 Act and the rules promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the  Additional  Shares.  The Company shall use its  reasonable  best
efforts to obtain from each person who now has piggyback  registration  rights a
waiver of those rights with respect to such  Registration  Statement;  provided,
however,  that the Company  shall have the right to include in the  Registration
Statement the Other Shares so long as the Piggyback Condition is satisfied.  The
Registration  Statement  (and each  amendment or  supplement  thereto,  and each
request  for  acceleration  of  effectiveness  thereof)  shall  be  provided  in
accordance  with Section 3(c) to the  Investors  and their  counsel prior to its
filing or other submission.  If a Registration Statement covering the Additional
Shares is required to be filed under this Section 2(a)(ii) and is not filed with
the SEC within five  Business  Days of the  request of any  Investor or upon the
occurrence of any of the events specified in this Section 2(a)(ii),  the Company
will make pro rata payments to each Investor, as liquidated damages and not as a
penalty,  in an amount equal to 1.5% of the  aggregate  amount  invested by such
Investor for each 30-day  period or pro rata for any portion  thereof  following
the date by which such  Registration  Statement should have been filed for which
no Registration  Statement is filed with respect to the Additional Shares.  Such
payments  shall be in  partial  compensation  to the  Investors,  and  shall not
constitute the Investors'  exclusive remedy for such events. Such payments shall
be made to each Investor in cash.

                           (iii) Promptly following the date (the "Qualification
Date") upon which the Company becomes  eligible to use a registration  statement
on Form S-3 to register the  Registrable  Securities  or Additional  Shares,  as
applicable,  for  resale,  but in no event more than  thirty (30) days after the
Qualification  Date (the  "Qualification  Deadline"),  the Company  shall file a
registration  statement  on Form S-3  covering  the  Registrable  Securities  or
Additional  Shares, as applicable (or a post-effective  amendment on Form S-3 to
the registration  statement on Form S-2) (a "Shelf Registration  Statement") and
shall use  commercially  reasonable  efforts to cause  such  Shelf  Registration
Statement to be declared effective as promptly as practicable  thereafter.  If a
Shelf Registration  Statement  covering the Registrable  Securities is not filed
with the SEC on or prior to the  Qualification  Deadline,  the Company will make
pro rata payments to each Investor,  as liquidated damages and not as a penalty,
in an amount equal to 1.5% of the aggregate amount invested by such Investor for
each 30-day  period or pro rata for any portion  thereof  following  the date by
which such Shelf Registration Statement should have been filed for which no such
Shelf Registration Statement is filed with respect to the Registrable Securities
or  Additional  Shares,  as  applicable.  Such  payments  shall  be  in  partial
compensation to the Investors, and shall not constitute the Investors' exclusive
remedy for such events. Such payments shall be made to each Investor in cash.

                                      -3-
<PAGE>

                           (b)  Expenses.  The  Company  will  pay all  expenses
associated  with each  registration,  including  filing and printing  fees,  the
Company's  counsel and  accounting  fees and  expenses,  costs  associated  with
clearing the Registrable  Securities for sale under  applicable state securities
laws,  listing  fees,  fees and expenses of one counsel to the Investors and the
Investors'  reasonable  expenses  in  connection  with  the  registration,   but
excluding discounts, commissions, fees of underwriters,  selling brokers, dealer
managers  or  similar  securities  industry  professionals  with  respect to the
Registrable Securities being sold.

                           (c)      Effectiveness.

                           (i) The  Company  shall use  commercially  reasonable
efforts  to  have  the  Registration  Statement  declared  effective  as soon as
practicable.  The Company  shall notify the  Investors by facsimile or e-mail as
promptly as practicable,  and in any event, within twenty-four (24) hours, after
any  Registration  Statement  is  declared  effective  and shall  simultaneously
provide  the  Investors  with  copies of any  related  Prospectus  to be used in
connection with the sale or other disposition of the securities covered thereby.
If (A)(x) a Registration  Statement  covering the Registrable  Securities is not
declared effective by the SEC prior to the earlier of (i) five (5) Business Days
after the SEC shall have informed the Company that no review of the Registration
Statement  will be made or (ii) the  120th day after  the  Closing  Date,  (y) a
Registration  Statement covering  Additional Shares is not declared effective by
the SEC within  120 days  following  the time such  Registration  Statement  was
required to be filed pursuant to Section 2(a)(ii),  or (z) a Shelf  Registration
Statement  is not  declared  effective  by the SEC  within  120 days  after  the
Qualification  Deadline, or (B) after a Registration Statement has been declared
effective  by the  SEC,  sales  cannot  be made  pursuant  to such  Registration
Statement  for any  reason  (including  without  limitation  by reason of a stop
order,  or the  Company's  failure to update the  Registration  Statement),  but
excluding  the  inability  of any  Investor to sell the  Registrable  Securities
covered  thereby  due to market  conditions  and except as excused  pursuant  to
subparagraph  (ii) below,  then the Company will make pro rata  payments to each
Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5%
of the aggregate  amount invested by such Investor for each 30-day period or pro
rata for any  portion  thereof  following  the date by which  such  Registration
Statement  should have been  effective (the  "Blackout  Period").  Such payments
shall be in partial compensation to the Investors,  and shall not constitute the
Investors'  exclusive remedy for such events.  The amounts payable as liquidated
damages  pursuant  to this  paragraph  shall be paid  monthly  within  three (3)
Business Days of the last day of each month  following the  commencement  of the
Blackout  Period until the  termination  of the Blackout  Period.  Such payments
shall be made to each Investor in cash.

                           (ii)     For not more  than twenty  (20)  consecutive
days or for a total of not more than  forty-five  (45) days in any  twelve  (12)
month  period,  the Company  may delay the  disclosure  of  material  non-public
information  concerning  the Company,  by suspending  the use of any  Prospectus
included  in any  registration  contemplated  by this  Section  containing  such
information,  the  disclosure  of which at the  time is not,  in the good  faith
opinion of the  Company,  in the best  interests  of the  Company  (an  "Allowed
Delay");  provided,  that the Company shall promptly (a) notify the Investors in
writing of the existence of (but in no event,  without the prior written consent
of an Investor,  shall the Company disclose to such Investor any of the facts or
circumstances  regarding)  material  non-public  information  giving  rise to an
Allowed Delay,  (b) advise the Investors in writing to cease all sales under the
Registration  Statement  until  the  end  of  the  Allowed  Delay  and  (c)  use
commercially  reasonable  efforts to terminate  an Allowed  Delay as promptly as
practicable.

                                      -4-
<PAGE>

         3. Company  Obligations.  The Company will use commercially  reasonable
efforts to effect the  registration of the Registrable  Securities in accordance
with the terms hereof,  and pursuant  thereto the Company will, as expeditiously
as possible:

                           (a) use commercially reasonable efforts to cause such
Registration  Statement to become effective and to remain continuously effective
for a period that will  terminate  upon the earlier of (i) the date on which all
Registrable  Securities  covered by such Registration  Statement as amended from
time to time,  have  been  sold,  and (ii)  the  date on which  all  Registrable
Securities  covered by such Registration  Statement may be sold pursuant to Rule
144(k) (the "Effectiveness Period") and advise the Investors in writing when the
Effectiveness Period has expired;

                           (b) prepare and file with the SEC such amendments and
post-effective  amendments to the  Registration  Statement and the Prospectus as
may be necessary to keep the  Registration  Statement  effective  for the period
specified in Section 3(a) and to comply with the  provisions of the 1933 Act and
the  1934  Act  with  respect  to the  distribution  of  all of the  Registrable
Securities covered thereby;

                           (c) provide copies to and permit  counsel  designated
by the Investors to review each  Registration  Statement and all  amendments and
supplements  thereto no fewer than seven (7) days prior to their filing with the
SEC and not file any document to which such counsel reasonably objects;

                           (d) furnish to the  Investors and their legal counsel
(i) promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company (but not later than two (2) Business  Days after
the filing date,  receipt date or sending date, as the case may be) one (1) copy
of any  Registration  Statement  and any  amendment  thereto,  each  preliminary
prospectus and Prospectus  and each  amendment or supplement  thereto,  and each
letter  written  by or on behalf of the  Company  to the SEC or the staff of the
SEC,  and each item of  correspondence  from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment),  and (ii)  such  number  of  copies  of a  Prospectus,  including  a
preliminary  prospectus,  and all  amendments and  supplements  thereto and such
other  documents as each Investor may reasonably  request in order to facilitate
the  disposition of the Registrable  Securities  owned by such Investor that are
covered by the related Registration Statement;

                           (e)  use  commercially   reasonable  efforts  to  (i)
prevent the issuance of any stop order or other suspension of effectiveness and,
(ii) if such order is issued,  obtain  the  withdrawal  of any such order at the
earliest possible moment;

                                      -5-
<PAGE>

                           (f)  prior  to any  public  offering  of  Registrable
Securities,  use  commercially  reasonable  efforts  to  register  or qualify or
cooperate  with  the  Investors  and  their  counsel  in  connection   with  the
registration or qualification of such Registrable  Securities for offer and sale
under the  securities  or blue sky laws of such  jurisdictions  requested by the
Investors  and do any and  all  other  commercially  reasonable  acts or  things
necessary or advisable to enable the  distribution in such  jurisdictions of the
Registrable Securities covered by the Registration Statement; provided, however,
that the Company shall not be required in connection therewith or as a condition
thereto to (i)  qualify to do business  in any  jurisdiction  where it would not
otherwise be required to qualify but for this Section 3(f),  (ii) subject itself
to general  taxation  in any  jurisdiction  where it would not  otherwise  be so
subject but for this Section 3(f), or (iii) file a general consent to service of
process in any such jurisdiction;

                           (g) use commercially  reasonable efforts to cause all
Registrable  Securities covered by a Registration Statement to be listed on each
securities  exchange,  interdealer  quotation  system  or other  market on which
similar securities issued by the Company are then listed;

                           (h)  immediately  notify the  Investors,  at any time
when a Prospectus relating to Registrable Securities is required to be delivered
under the 1933 Act, upon discovery that, or upon the happening of any event as a
result of which, the Prospectus included in a Registration Statement, as then in
effect,  includes an untrue  statement of a material  fact or omits to state any
material fact required to be stated  therein or necessary to make the statements
therein not misleading in light of the circumstances  then existing,  and at the
request of any such  holder,  promptly  prepare  and  furnish  to such  holder a
reasonable  number  of  copies  of a  supplement  to or  an  amendment  of  such
Prospectus  as  may  be  necessary  so  that,  as  thereafter  delivered  to the
purchasers of such Registrable Securities,  such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein not misleading in
light of the circumstances then existing; and

                           (i) otherwise use commercially  reasonable efforts to
comply with all applicable  rules and  regulations of the SEC under the 1933 Act
and the 1934 Act,  take such other  actions as may be  reasonably  necessary  to
facilitate the registration of the Registrable  Securities  hereunder;  and make
available to its security holders,  as soon as reasonably  practicable,  but not
later than the  Availability  Date (as defined  below),  an  earnings  statement
covering a period of at least twelve (12) months,  beginning after the effective
date of each Registration Statement,  which earnings statement shall satisfy the
provisions  of Section  11(a) of the 1933 Act,  including  Rule 158  promulgated
thereunder (for the purpose of this subsection 3(i),  "Availability  Date" means
the 45th day following  the end of the fourth  fiscal  quarter that includes the
effective  date of such  Registration  Statement,  except  that,  if such fourth
fiscal quarter is the last quarter of the Company's  fiscal year,  "Availability
Date" means the 90th day after the end of such fourth fiscal quarter).

                           (j) With a view to making  available to the Investors
the  benefits  of Rule  144 (or  its  successor  rule)  and  any  other  rule or
regulation  of the SEC that may at any time permit the  Investors to sell shares
of Common Stock to the public without  registration,  the Company  covenants and
agrees to: (i) make and keep public  information  available,  as those terms are
understood  and defined in Rule 144,  until the earlier of (A) six months  after
such date as all of the  Registrable  Securities may be resold  pursuant to Rule
144(k)  or any  other  rule of  similar  effect  or (B) such  date as all of the
Registrable  Securities  shall  have  been  resold;  (ii) file with the SEC in a
timely manner all reports and other documents  required of the Company under the
1934 Act;  and (iii)  furnish to each  Investor  upon  request,  as long as such
Investor owns any Registrable Securities, (A) a written statement by the Company
that it has complied with the reporting requirements of the 1934 Act, (B) a copy
of the Company's most recent Annual Report on Form 10-KSB or Quarterly Report on
Form 10-QSB,  and (C) such other  information as may be reasonably  requested in
order to avail such  Investor of any rule or  regulation of the SEC that permits
the selling of any such Registrable Securities without registration.

                                      -6-
<PAGE>

              4. Due  Diligence  Review;  Information.  The  Company  shall make
available,  during  normal  business  hours,  for  inspection  and review by the
Investors,  advisors to and representatives of the Investors (who may or may not
be  affiliated  with the  Investors  and who are  reasonably  acceptable  to the
Company),  all financial and other  records,  all SEC Filings (as defined in the
Purchase  Agreement)  and other  filings with the SEC,  and all other  corporate
documents and  properties of the Company as may be reasonably  necessary for the
purpose  of such  review,  and  cause  the  Company's  officers,  directors  and
employees,  within a  reasonable  time  period,  to supply all such  information
reasonably  requested by the  Investors or any such  representative,  advisor or
underwriter in connection with such Registration  Statement (including,  without
limitation,  in response to all questions and other inquiries reasonably made or
submitted  by any of them),  prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling the
Investors  and  such  representatives,   advisors  and  underwriters  and  their
respective  accountants  and  attorneys  to  conduct  initial  and  ongoing  due
diligence  with  respect to the  Company and the  accuracy of such  Registration
Statement.

                  The Company shall not disclose material nonpublic  information
to the Investors, or to advisors to or representatives of the Investors,  unless
prior to disclosure of such information the Company  identifies such information
as being  material  nonpublic  information  and  provides  the  Investors,  such
advisors and representatives  with the opportunity to accept or refuse to accept
such  material  nonpublic  information  for review and any  Investor  wishing to
obtain such  information  enters into an appropriate  confidentiality  agreement
with the Company with respect thereto.

         5. Obligations of the Investors.

                           (a) Each  Investor  shall  furnish  in writing to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it,
as shall be reasonably  required to effect the  registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably  request. At least five (5) Business Days prior to
the first  anticipated  filing date of any Registration  Statement,  the Company
shall notify each  Investor of the  information  the Company  requires from such
Investor  if such  Investor  elects  to have any of the  Registrable  Securities
included  in  the  Registration   Statement.  An  Investor  shall  provide  such
information  to the  Company at least two (2)  Business  Days prior to the first
anticipated  filing date of such Registration  Statement if such Investor elects
to  have  any  of  the  Registrable  Securities  included  in  the  Registration
Statement.

                                      -7-
<PAGE>

                           (b)  Each   Investor,   by  its   acceptance  of  the
Registrable  Securities  agrees to  cooperate  with the  Company  as  reasonably
requested  by the Company in  connection  with the  preparation  and filing of a
Registration Statement hereunder,  unless such Investor has notified the Company
in writing of its  election to exclude all of its  Registrable  Securities  from
such Registration Statement.

                           (c) Each  Investor  agrees that,  upon receipt of any
notice  from the  Company of either  (i) the  commencement  of an Allowed  Delay
pursuant  to Section  2(c)(ii)  or (ii) the  happening  of an event  pursuant to
Section 3(h) hereof, such Investor will immediately  discontinue  disposition of
Registrable  Securities  pursuant to the  Registration  Statement  covering such
Registrable  Securities,  until  the  Investor's  receipt  of the  copies of the
supplemented  or amended  prospectus  filed  with the SEC and until any  related
post-effective  amendment  is  declared  effective  and,  if so  directed by the
Company,  the  Investor  shall  deliver to the  Company  (at the  expense of the
Company) or destroy (and deliver to the Company a  certificate  of  destruction)
all  copies  in  the  Investor's  possession  of  the  Prospectus  covering  the
Registrable Securities current at the time of receipt of such notice.

         6. Indemnification.

                           (a) Indemnification by the Company.  The Company will
indemnify and hold harmless each Investor and its officers,  directors, members,
employees and agents, successors and assigns, and each other person, if any, who
controls such Investor  within the meaning of the 1933 Act,  against any losses,
claims,  damages  or  liabilities,  joint or  several,  to which they may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities  (or actions in respect  thereof) arise out of or are based upon:
(i) any untrue  statement  or alleged  untrue  statement  of any  material  fact
contained in any  Registration  Statement,  any preliminary  prospectus or final
prospectus  contained therein, or any amendment or supplement thereof;  (ii) any
blue sky application or other document executed by the Company  specifically for
that purpose or based upon written information furnished by the Company filed in
any  state  or  other  jurisdiction  in  order  to  qualify  any  or  all of the
Registrable  Securities under the securities laws thereof (any such application,
document  or  information  herein  called a "Blue Sky  Application");  (iii) the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements therein not misleading;  (iv)
any violation by the Company or its agents of any rule or regulation promulgated
under the 1933 Act  applicable  to the  Company or its agents  and  relating  to
action or inaction required of the Company in connection with such registration;
or (v) any failure to register or qualify the Registrable Securities included in
any  such  Registration  in any  state  where  the  Company  or its  agents  has
affirmatively  undertaken  or agreed in writing that the Company will  undertake
such  registration or qualification  on an Investor's  behalf and will reimburse
such  Investor,  and each  such  officer,  director  or  member  and  each  such
controlling person for any legal or other expenses  reasonably  incurred by them
in connection  with  investigating  or defending any such loss,  claim,  damage,
liability or action;  provided,  however, that the Company will not be liable in
any such  case if and to the  extent  that  any  such  loss,  claim,  damage  or
liability  arises out of or is based upon an untrue  statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished  by  such  Investor  or  any  such   controlling   person  in  writing
specifically for use in such Registration Statement or Prospectus.

                                      -8-
<PAGE>

                           (b)  Indemnification by the Investors.  Each Investor
agrees,  severally  but not jointly,  to  indemnify  and hold  harmless,  to the
fullest  extent  permitted  by  law,  the  Company,  its  directors,   officers,
employees,  stockholders  and each person who controls  the Company  (within the
meaning of the 1933 Act) against any losses,  claims,  damages,  liabilities and
expense (including reasonable attorney fees) resulting from any untrue statement
of a material  fact or any omission of a material  fact required to be stated in
the Registration  Statement or Prospectus or preliminary prospectus or amendment
or  supplement   thereto  or  necessary  to  make  the  statements  therein  not
misleading,  to the extent, but only to the extent that such untrue statement or
omission is contained in any  information  furnished in writing by such Investor
to the Company  specifically  for  inclusion in such  Registration  Statement or
Prospectus or amendment or supplement  thereto.  In no event shall the liability
of an Investor be greater in amount than the dollar  amount of the proceeds (net
of all expense paid by such  Investor in connection  with any claim  relating to
this Section 6 and the amount of any damages such  Investor has  otherwise  been
required to pay by reason of such untrue statement or omission) received by such
Investor  upon  the  sale  of  the  Registrable   Securities   included  in  the
Registration Statement giving rise to such indemnification obligation.

                           (c)  Conduct  of  Indemnification   Proceedings.  Any
person entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying  party of any claim with respect to which it seeks  indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel  reasonably  satisfactory  to the indemnified  party;  provided that any
person  entitled  to  indemnification  hereunder  shall have the right to employ
separate  counsel and to participate in the defense of such claim,  but the fees
and expenses of such counsel  shall be at the expense of such person  unless (a)
the  indemnifying  party has  agreed to pay such  fees or  expenses,  or (b) the
indemnifying  party  shall have  failed to assume the  defense of such claim and
employ counsel  reasonably  satisfactory to such person or (c) in the reasonable
judgment  of any such  person,  based  upon  written  advice of its  counsel,  a
conflict of interest exists between such person and the indemnifying  party with
respect to such claims (in which case, if the person  notifies the  indemnifying
party in  writing  that such  person  elects to employ  separate  counsel at the
expense of the indemnifying  party,  the  indemnifying  party shall not have the
right to  assume  the  defense  of such  claim on behalf  of such  person);  and
provided,  further,  that the failure of any indemnified party to give notice as
provided  herein  shall not relieve the  indemnifying  party of its  obligations
hereunder,  except  to the  extent  that  such  failure  to  give  notice  shall
materially  adversely affect the  indemnifying  party in the defense of any such
claim or litigation.  It is understood that the indemnifying party shall not, in
connection with any proceeding in the same  jurisdiction,  be liable for fees or
expenses of more than one  separate  firm of  attorneys at any time for all such
indemnified  parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that  does not  include  as an  unconditional  term  thereof  the  giving by the
claimant or plaintiff to such indemnified  party of a release from all liability
in respect of such claim or litigation.

                           (d)    Contribution.    If   for   any   reason   the
indemnification  provided  for  in  the  preceding  paragraphs  (a)  and  (b) is
unavailable to an indemnified  party or insufficient to hold it harmless,  other
than  as  expressly  specified  therein,   then  the  indemnifying  party  shall
contribute to the amount paid or payable by the indemnified party as a result of
such loss,  claim,  damage or liability in such  proportion as is appropriate to
reflect the relative fault of the indemnified party and the indemnifying  party,
as well as any other  relevant  equitable  considerations.  No person  guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution  from any person not guilty of such fraudulent
misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable  Securities  be  greater  in amount  than the  dollar  amount of the
proceeds (net of all expenses  paid by such holder in connection  with any claim
relating  to this  Section  6 and the  amount of any  damages  such  holder  has
otherwise  been  required  to pay by reason of such  untrue  or  alleged  untrue
statement or omission or alleged  omission)  received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

                                      -9-
<PAGE>

         7. Miscellaneous.

                           (a)  Amendments  and Waivers.  This  Agreement may be
amended only by a writing signed by the Company and the Required Investors.  The
Company may take any action herein prohibited, or omit to perform any act herein
required to be  performed  by it, only if the Company  shall have  obtained  the
written  consent to such  amendment,  action or omission to act, of the Required
Investors.

                           (b)  Notices.  All notices  and other  communications
provided for or permitted hereunder shall be made as set forth in Section 9.4 of
the Purchase Agreement.

                           (c)  Assignments  and  Transfers  by  Investors.  The
provisions of this  Agreement  shall be binding upon and inure to the benefit of
the  Investors  and their  respective  successors  and assigns.  An Investor may
transfer  or  assign,  in  whole or from  time to time in  part,  to one or more
persons its rights  hereunder in  connection  with the  transfer of  Registrable
Securities by such Investor to such person, provided that such Investor complies
with all laws  applicable  thereto and provides  written notice of assignment to
the Company promptly after such assignment is effected.

                           (d)  Assignments  and Transfers by the Company.  This
Agreement  may not be assigned by the Company  (whether by  operation  of law or
otherwise)  without  the  prior  written  consent  of  the  Required  Investors,
provided,  however,  that the  Company  may assign its rights and  delegate  its
duties hereunder to any surviving or successor  corporation in connection with a
merger or  consolidation  of the Company  with another  corporation,  or a sale,
transfer  or other  disposition  of all or  substantially  all of the  Company's
assets to another corporation, without the prior written consent of the Required
Investors, after notice duly given by the Company to each Investor.

                           (e)  Benefits  of  the   Agreement.   The  terms  and
conditions of this  Agreement  shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties.  Nothing in this
Agreement,  express or implied,  is intended to confer upon any party other than
the  parties  hereto or their  respective  successors  and  assigns  any rights,
remedies,  obligations,  or  liabilities  under or by reason of this  Agreement,
except as expressly provided in this Agreement.

                           (f)  Counterparts;   Faxes.  This  Agreement  may  be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall  constitute  one and the same  instrument.  This
Agreement may also be executed via facsimile, which shall be deemed an original.

                                      -10-
<PAGE>

                           (g) Titles and  Subtitles.  The titles and  subtitles
used  in  this  Agreement  are  used  for  convenience  only  and  are not to be
considered in construing or interpreting this Agreement.

                           (h)  Severability.  Any  provision of this  Agreement
that is  prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without invalidating the remaining provisions hereof but shall
be  interpreted  as if it were  written so as to be  enforceable  to the maximum
extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render  unenforceable such provision
in any other  jurisdiction.  To the extent  permitted  by  applicable  law,  the
parties  hereby waive any provision of law which renders any  provisions  hereof
prohibited or unenforceable in any respect.

                           (i) Further Assurances. The parties shall execute and
deliver  all such  further  instruments  and  documents  and take all such other
actions as may reasonably be required to carry out the transactions contemplated
hereby and to evidence the fulfillment of the agreements herein contained.

                           (j) Entire  Agreement.  This Agreement is intended by
the  parties as a final  expression  of their  agreement  and  intended  to be a
complete and  exclusive  statement of the  agreement  and  understanding  of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes  all prior  agreements  and  understandings  between the parties with
respect to such subject matter.

                           (k) Governing Law; Consent to Jurisdiction; Waiver of
Jury Trial.  This  Agreement  shall be governed by, and  construed in accordance
with, the internal laws of the State of New York without regard to the choice of
law principles  thereof.  Each of the parties hereto irrevocably  submits to the
exclusive  jurisdiction  of the  courts of the State of New York  located in New
York County and the United States  District  Court for the Southern  District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising  out of this  Agreement  and the  transactions  contemplated  hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party  hereto  anywhere  in the world by the same  methods as are
specified  for the giving of notices under this  Agreement.  Each of the parties
hereto  irrevocably  consents to the  jurisdiction of any such court in any such
suit,  action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or  proceeding  brought in such courts and  irrevocably  waives any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY  LITIGATION  WITH RESPECT TO THIS  AGREEMENT  AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

                                      -11-
<PAGE>

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
or caused their duly  authorized  officers to execute  this  Agreement as of the
date first above written.

The Company:                                ION NETWORKS, INC.

                                            By: /s/ Norm Corn
                                            ----------------------------
                                            Name:
                                            Title:

                                      -12-
<PAGE>

The Investors:               SPECIAL SITUATIONS FUND III, L.P.

                             By: /s/ Austin W. Marxe
                             ------------------------------------------
                             Name: Austin W. Marxe
                             Title: General Partner

                             SPECIAL SITUATIONS CAYMAN FUND, L.P.

                             By: /s/Austin W. Marxe
                             ------------------------------------------
                             Name: Austin W. Marxe
                             Title: General Partner

                             SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.

                             By: /s/Austin W. Marxe
                             ------------------------------------------
                             Name: Austin W. Marxe
                             Title: General Partner

                             SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

                             By: /s/ Austin W. Marxe
                             -------------------------------------------
                             Name: Austin W. Marxe
                             Title: General Partner

                             SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.

                             By: /s/ Austin W. Marxe
                             ------------------------------------------
                             Name: Austin W. Marxe
                             Title: General Partner

                                      -13-
<PAGE>

                                                                       Exhibit A

                              PLAN OF DISTRIBUTION

         The  selling  stockholders,  which  as  used  herein  includes  donees,
pledgees,  transferees or other successors-in-interest  selling shares of common
stock or  interests in shares of common  stock  received  after the date of this
prospectus  from  a  selling   stockholder  as  a  gift,   pledge,   partnership
distribution  or other  transfer,  may,  from time to time,  sell,  transfer  or
otherwise  dispose of any or all of their shares of common stock or interests in
shares of common  stock on any stock  exchange,  market or trading  facility  on
which the shares are traded or in private  transactions.  These dispositions may
be at fixed prices,  at prevailing  market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices.

         The  selling  stockholders  may use  any  one or more of the  following
methods when disposing of shares or interests therein:

         - ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

         - block  trades in which the  broker-dealer  will  attempt  to sell the
shares as agent, but may position and resell a portion of the block as principal
to facilitate the transaction;

         - purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

         - an exchange distribution in accordance with the rules of the
applicable exchange;

         - privately negotiated transactions;

         - short sales  effected  after the date the  registration  statement of
which this Prospectus is a part is declared effective by the SEC;

         - through  the  writing  or  settlement  of  options  or other  hedging
transactions, whether through an options exchange or otherwise;

         -  broker-dealers  may agree with the  selling  stockholders  to sell a
specified number of such shares at a stipulated price per share;

         - a combination of any such methods of sale; and

         - any other method permitted pursuant to applicable law.

         The  selling  stockholders  may,  from time to time,  pledge or grant a
security  interest  in some or all of the shares of common  stock  owned by them
and,  if they  default in the  performance  of their  secured  obligations,  the
pledgees or secured parties may offer and sell the shares of common stock,  from
time to time,  under this  prospectus,  or under an amendment to this prospectus
under  Rule  424(b)(3)  or other  applicable  provision  of the  Securities  Act
amending the list of selling stockholders to include the pledgee,  transferee or
other successors in interest as selling stockholders under this prospectus.  The
selling  stockholders  also may  transfer  the  shares of common  stock in other
circumstances,  in which case the  transferees,  pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.

<PAGE>

         In connection  with the sale of our common stock or interests  therein,
the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions,  which may in turn engage in short sales of the
common stock in the course of hedging the  positions  they  assume.  The selling
stockholders  may also sell shares of our common  stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the common
stock to  broker-dealers  that in turn may sell these  securities.  The  selling
stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

         The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts or commissions,  if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part,  any proposed  purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering. Upon
any  exercise of the warrants by payment of cash,  however,  we will receive the
exercise price of the warrants.

         The selling stockholders also may resell all or a portion of the shares
in open market  transactions  in reliance upon Rule 144 under the Securities Act
of 1933, provided that they meet the criteria and conform to the requirements of
that rule.

         The selling stockholders and any underwriters, broker-dealers or agents
that  participate  in the sale of the common stock or  interests  therein may be
"underwriters"  within the meaning of Section 2(11) of the  Securities  Act. Any
discounts,  commissions,  concessions  or profit  they earn on any resale of the
shares may be underwriting  discounts and commissions  under the Securities Act.
Selling stockholders who are "underwriters"  within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.

         To the extent required,  the shares of our common stock to be sold, the
names of the selling  stockholders,  the respective  purchase  prices and public
offering prices, the names of any agents, dealer or underwriter,  any applicable
commissions or discounts with respect to a particular offer will be set forth in
an  accompanying  prospectus  supplement or, if  appropriate,  a  post-effective
amendment to the registration statement that includes this prospectus.

         In  order  to  comply  with  the  securities  laws of some  states,  if
applicable,  the common  stock may be sold in these  jurisdictions  only through
registered  or licensed  brokers or  dealers.  In  addition,  in some states the
common stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.

                                      -15-
<PAGE>

         We have  advised the selling  stockholders  that the  anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling  stockholders and their  affiliates.
In addition,  we will make copies of this  prospectus (as it may be supplemented
or amended  from time to time)  available  to the selling  stockholders  for the
purpose of satisfying the  prospectus  delivery  requirements  of the Securities
Act. The selling  stockholders may indemnify any broker-dealer that participates
in transactions  involving the sale of the shares against  certain  liabilities,
including liabilities arising under the Securities Act.

         We  have  agreed  to  indemnify   the  selling   stockholders   against
liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.

         We have agreed with the selling  stockholders to keep the  registration
statement  of which  this  prospectus  constitutes  a part  effective  until the
earlier of (1) such time as all of the shares  covered by this  prospectus  have
been disposed of pursuant to and in accordance with the  registration  statement
or (2) the date on which the shares may be sold  pursuant  to Rule 144(k) of the
Securities Act.

                                      -16-
<PAGE>

                                                                      Schedule 1

                                  Other Shares

                                    [to come]EXHIBIT 10.2

                                 NS8 CORPORATION
                             2004 STOCK OPTION PLAN

                               SECTION 1.  PURPOSE

     The  purposes  of this 2004 Stock Option Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to provide
additional  incentive  to  certain individuals providing services to the Company
and its Subsidiaries, and to promote the success of the Company's businesses and
thereby  enhance  long-term  shareholder  value.  Options granted under the Plan
shall  be  nonqualified  stock  options.

                             SECTION 2.  DEFINITIONS

     As  used  herein,  the  following  definitions  shall  apply:

2.1     "Administrator"  means  the  Committee  or,  if  there  is no Committee,
         -------------
the  Board.  If  a  Committee  has  been  designated  but its authority has been
limited  by the Board, any responsibilities of the Administrator not assigned to
the  Committee  shall  be  retained  by  the  Board.

2.2     "Affiliate"  means  (a)  any entity that, directly or indirectly through
         ---------
one  or  more intermediaries, is controlled by the Company and (b) any entity in
which  the Company has a significant equity interest, in each case as determined
by  the  Committee,  and  may  include  a  Parent  or  Subsidiary.

2.3     "Applicable  Laws"  means  all  U.S.  and  Canadian  legal  requirements
         ----------------
relating to stock options, including U.S. state corporate laws, U.S. federal and
state  securities  laws, Canadian provincial securities laws, the Code, Canadian
tax  laws,  and  the  rules  of  any  applicable  Stock  Exchange.

2.4     "Board"  means  the  Board  of  Directors  of  the  Company.
         -----

2.5     "Cause" means willful misconduct with respect to, or that is harmful to,
         -----
the  Company or any of its Affiliates including, without limitation, dishonesty,
fraud,  unauthorized  use  or  disclosure  of  confidential information or trade
secrets  or  other  misconduct  (including, without limitation, conviction for a
felony),  in  each  case  as  reasonably  determined  by  the  Administrator.

2.6     "Change  in  Control"  shall  mean  any  of  the  following:
         -------------------

     (a) the acquisition of securities of the Company representing more than 50%
of the combined voting power of the Company's then outstanding securities by any
person  or  group of persons, except a Permitted Shareholder (as defined below),
acting  in  concert. A "Permitted Shareholder" means a holder, as of the date of
adoption  of  this  Plan,  of  voting  capital  stock  of  the  Company;

     (b)  a  consolidation  or merger of the Company in which the Company is not
the  continuing  or  surviving  corporation  or  pursuant to which shares of the
Company's outstanding capital stock are converted into cash, securities or other
property,  other  than  a  consolidation  or  merger of the Company in which the

                                      E-1
<PAGE>

Company's shareholders immediately prior to the consolidation or merger have the
same  proportionate  ownership  of  voting  capital  stock  of  the  surviving
corporation  immediately  after  the  consolidation  or  merger;

     (c)  the sale, transfer or other disposition of all or substantially all of
the  assets  of  the  Company;  or

     (d) in the event that the shares of voting capital stock of the Company are
traded  on  an  established  securities  market:  a public announcement that any
person  has  acquired  or  has  the  right  to  acquire  beneficial ownership of
securities  of  the  Company  representing  more than 50% of the combined voting
power  of  the  Company's  then outstanding securities, and for this purpose the
terms  "person"  and  "beneficial ownership" shall have the meanings provided in
Section 13(d) of the Exchange Act or related rules promulgated by the Securities
and  Exchange  Commission;  or  the commencement of or public announcement of an
intention to make a tender offer or exchange offer for securities of the Company
representing  more  than  50% of the combined voting power of the Company's then
outstanding  securities.

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

2.8     "Committee"  means  a  committee of directors designated by the Board to
         ---------
administer  the Plan.  At any time that either Rule 16b-3 or Code Section 162(m)
applies  to  the Company, the Committee shall be comprised of not less than such
number  of  directors  as  shall be required to permit Options granted under the
Plan  to  qualify  under  Rule  16b-3, and each member of the Committee shall be
an"outside  director"  within  the  meaning  of  Section  162(m)  of  the  Code.

2.9     "Common  Stock"  means  the  common  stock  of  the  Company.
         -------------

2.10     "Company"  means  NS8  Corporation,  a  Delaware  corporation.
          -------

2.11     "Consultant" means any person, including an advisor or director, who is
          ----------
engaged by the Company or any Affiliate, Parent or Subsidiary to render services
and  who is not an Employee and to whom stock options may be granted pursuant to
Applicable  Law.

2.12     "Continuous  Status  as an Employee or Consultant" means the absence of
          ------------------------------------------------
any  interruption  or  termination  of  service  as  an  Employee or Consultant.
Continuous  Status  as  an  Employee  or  Consultant  shall  not  be  considered
interrupted  in  the case of:  (a) sick leave, military leave or any other leave
of  absence  approved  by  the  Administrator, provided that such leave is for a
period  of  not  more  than  ninety  (90)  days,  unless  re-employment upon the
expiration  of  such  leave  is  guaranteed  by  contract  or statute, or unless
provided  otherwise  pursuant  to  Company policy adopted from time to time; (b)
transfers  between  locations  of  the  Company  or  between  the  Company,  its
Affiliates  or  their  respective  successors; or (c) a change in status from an
Employee  to  a  Consultant  or  from  a  Consultant  to  an  Employee.

2.13     "Disability"  means  permanent  and total disability as defined in Code
          ----------
section  22(e)(3).

2.14     "Employee" means any person, including officers and directors (who meet
          --------
the  requirements  of  this  Section),  employed by the Company or any Parent or
Subsidiary  of  the Company, with the status of employment determined based upon
such  minimum  number  of  hours or periods worked as shall be determined by the
Administrator  in  its discretion, subject to any requirements of the Code.  The

                                      E-2
<PAGE>

payment  of  a  director's  fee  by the Company to a director shall not alone be
sufficient  to  constitute"employment"  of  such  director  by  the  Company.

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

2.16     "Fair  Market  Value"  means,  as of any date, the price at which fully
          -------------------
informed  prudent  parties  would  engage  in a purchase and sale transaction if
neither  of them were under any compulsion to buy or sell, as determined in good
faith  by  the  Administrator  taking  into  account, to the extent relevant and
instructive,  the  following:

     (a)  if  the  Common Stock is listed on any established stock exchange or a
national  market  system,  including  without limitation the NASDAQ Stock Market
Inc. ("NASDAQ"), the weighted average of the closing sales prices for such stock
(or  the  closing  bid,  if  no sales were reported) as quoted on such system or
exchange,  or,  if there is more than one such system or exchange, the system or
exchange  with  the  greatest volume of trading in Common Stock for the ten (10)
market  trading days prior to the time of determination, as reported in The Wall
Street  Journal  or  such  other  source as the Administrator deems reliable; or

     (b)  if  the  Common Stock is quoted on the OTC Bulletin Board or regularly
quoted  by  a  recognized securities dealer but selling prices are not reported,
the  weighted  average of the mean between the high bid and low asked prices for
the  Common Stock for the for the ten (10) market trading days prior to the time
of determination, as reported in The Wall Street Journal or such other source as
the  Administrator  deems  reliable.

2.17     "Good  Reason" means the occurrence of any of the following events
          ------------
or  conditions  without  the  Optionee's  consent:

     (a)  a change in the Optionee's status, title, position or responsibilities
(including  reporting  responsibilities) that represents a substantial reduction
in  the  status,  title,  position  or responsibilities as in effect immediately
prior  thereto,  and  which  is  not  remedied  promptly after receipt of notice
thereof  from  the  Optionee;

     (b)  a  significant  reduction  (i.e.  a  reduction of at least 20%) in the
Optionee's  annual  base  salary that is not part of a Company-wide reduction of
salaries;  or

     (c)  the  Company requiring the Optionee to be based at any place outside a
200-mile  radius of his or her place of employment prior to a Change in Control,
except  for  reasonably  required  travel  on the Company's business that is not
materially greater than such travel requirements prior to the Change in Control.

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

2.19     "Option  Agreement" means a written agreement between the Company and a
          -----------------
Optionee  relating  to  an  Option  under  the  Plan.

2.20     "Optioned  Stock"  means  the  Common  Stock  subject  to  an  Option.
          ---------------

2.21     "Optionee"  means  an  Employee  or  Consultant who receives an Option.
          --------

                                      E-3
<PAGE>

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

2.23     "Plan"  means  this  2004  Stock  Option  Plan.
          ----

2.24     "Reporting  Person"  means  an  officer,  director, or greater than ten
          -----------------
percent  (10%) shareholder of the Company within the meaning of Rule 16a-2 under
the  Exchange  Act, who is required to file reports pursuant to Rule 16a-3 under
the  Exchange  Act.

2.25     "Rule  16b-3"  means  Rule 16b-3 promulgated under the Exchange Act, as
          -----------
the  same  may  be  amended  from  time  to  time,  or  any successor provision.

2.26     "Securities  Act"  means  the  Securities  Act  of  1933,  as  amended.
          ---------------

2.27     "Share"  means  a  share  of  the  Common  Stock, as may be adjusted as
          -----
permitted  under  the  Plan.

2.28     "Stock Option Exercise Form" means that document attached to the Option
          --------------------------
Agreement  as  Schedule"A"  and  forming  a  part thereof  and that provides the
mechanism  whereby  the  Option  may  be  exercised.

2.29     "Stock  Exchange"  means any stock exchange or consolidated stock price
          ---------------
reporting  system  on  which prices for the Common Stock are quoted at any given
time.

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

                      SECTION 3.  STOCK SUBJECT TO THE PLAN

     Subject  to the provisions for adjustment under the terms of this Plan, the
maximum aggregate number of shares that may be made subject to Options under the
Plan  is  thirty  million(30,000,000) shares of Common Stock.  The shares may be
authorized,  but  unissued,  or  reacquired  Common  Stock.  If an Option should
expire  or  become unexercisable for any reason without having been exercised in
full,  the  unpurchased  Shares that were subject thereto shall, unless the Plan
shall  have  been  terminated, become available for future grant under the Plan.
In  addition,  any shares of Common Stock which are retained by the Company upon
exercise  of an Option in order to satisfy the exercise price for such Option or
any  withholding  taxes  due  with respect to such exercise shall be treated for
purposes  of  this  limitation  as not issued and shall continue to be available
under  the  Plan.  Shares  repurchased by the Company pursuant to any repurchase
right  which  the Company may have shall not be available for future grant under
the  Plan.

                     SECTION 4.  ADMINISTRATION OF THE PLAN

4.1     Powers of the Administrator.  Subject to the provisions of the Plan
        ----------------------------
and  to  any  required  approval  of  any  relevant  authorities,  including the
approval,  if  required, of any Stock Exchange, the Administrator shall have the
authority,  in  its  discretion:

     (a)  to  determine the Fair Market Value of the Common Stock, in accordance
with  the  provisions  of  the  Plan;

                                      E-4
<PAGE>

     (b)  to  select the Consultants and Employees to whom Options may from time
to  time  be  granted  hereunder;

     (c)  to determine whether and to what extent Options are granted hereunder;

     (d) to determine the number of shares of Common Stock to be covered by each
such  Option  granted  hereunder  and  the  type  of  each  such  Option;

     (e)  to  approve  forms  of  agreement  for  use  under  the  Plan;

     (f)  to  construe  and  interpret the terms of the Plan and Options granted
under  the  Plan;

     (g)  to  determine  vesting schedules and any other terms and conditions of
Options,  not  inconsistent  with  this  Plan;

     (h)  to  determine  whether  and  under what circumstances an Option may be
settled  in  Common  Stock  or  other  consideration  instead  of  cash;  and

     (i)  to  make  any  other  determination and take any other action that the
Administrator  deems  necessary or desirable for the administration of the Plan.

4.2     Delegation  of  Authority  to  Officers.  The  Administrator  may
        ----------------------------------------
delegate limited authority to specified officers of the Company to grant Options
under  the  Plan,  subject  to limitations as set forth in the document granting
such  authority.

4.3     Effect  of  Administrator's Decision.  All decisions, determinations and
        -------------------------------------
interpretations  of  the  Administrator  shall  be  final  and  binding  on  all
Optionees.

                       SECTION 5.  ELIGIBILITY FOR OPTIONS

     Stock  Options  may  be  granted  to  Employees  and  Consultants  who have
successfully  completed any probationary period related to their employment.  An
Employee  or  Consultant  who  has  been  granted an Option may, if he or she is
otherwise  eligible,  be  granted  additional  Options.

                          SECTION 6.  AWARDS OF OPTIONS

6.1     Term  of  Option.  The term of each Option shall be the term stated
        -----------------
in  the Option Agreement; provided, however, that the term shall be no more than
five  (5)  years  from  the date of grant thereof or such shorter term as may be
provided  in  the  Option  Agreement.

6.2     Option Exercise Price.  The per share exercise price for the Shares
        ----------------------
to  be  issued  pursuant  to  exercise  of  an  Option shall be such price as is
determined  by the Administrator and may be greater than or equal to Fair Market
Value  at  the  time  of  grant.

6.3     Consideration.  The consideration to be paid for the Shares to be issued
        --------------
upon exercise of an Option, including the method of payment, shall be determined
by  the  Administrator  and  may  consist  entirely  of  (a)  cash or check, (b)
cancellation  of  indebtedness  of  the Company to Optionee, (c) promissory note
(subject  to  approval by the Company, and provided that such note is for a term
of  not  greater  than  five  years  and  provides  for  a  reasonable  rate  of
interest),(d) surrender of other Shares that (i) have been owned by Optionee for

                                      E-5
<PAGE>

more  than  six  months  on the date of surrender or such other period as may be
required  to  avoid  a  charge  to  the Company's earnings, and (ii) have a Fair
Market  Value  on the date of surrender equal to the aggregate exercise price of
Shares  to  be purchased by Optionee as to which such Option shall be exercised,
(e) if there is a public market for the Shares and they are registered under the
Securities  Act,  delivery  of a properly executed exercise notice together with
such  other  documentation  as  the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the  sale  or loan proceeds required to pay the aggregate exercise price and any
applicable  income  or  employment  taxes,  (f) any combination of the foregoing
methods  of  payment,  or (g) such other consideration and method of payment for
the issuance of Shares to the extent permitted under Applicable Laws.  In making
its  determination  as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit  the  Company  or  result in the recognition of compensation expense (or
additional  compensation  expense)  for  financial  reporting  purposes.

6.4     Vesting  of  Options.
        ---------------------

     (a)  Vesting  Schedule.  Except  as  authorized  by  the  Administrator  as
          -----------------
permitted  under  the terms of this Plan, no Option will be exercisable until it
has vested.  The Administrator will specify the vesting schedule for each Option
at  the  time  of  grant  of the Option, provided that if no vesting schedule is
specified at the time of grant, the Option shall vest in full over the course of
two  years  from  date  of  grant  as  follows:

     (b)  If  no  other  vesting schedule is specified at the time of grant, the
Option  shall  vest  in  full over the course of two years from date of grant as
follows:

          (i)  twenty  five  percent (25%) of the total number of Shares granted
               under the Option shall vest six (6) months from the date of grant
               subject  to  the  condition  that  the  Optionee has maintained a
               Continuous Status as an Employee or Consultant of the Company, or
               of  an Affiliate, Parent or Subsidiary of the Company, as defined
               in  the  Plan;  and

          (ii) the  remaining  seventy-five  percent (75%) of the Shares granted
               under  the  Option  shall vest pro rata monthly over the eighteen
               (18)  months  following  the  date  that  the initial twenty five
               percent  (25%)  of  the  total number of Shares granted under the
               Option  vest,  subject  to  the  condition  that the Optionee has
               maintained  a  Continuous  Status as an Employee or Consultant of
               the  Company,  or  of  an  Affiliate, Parent or Subsidiary of the
               Company,  as  defined  in  the  Plan.

The  Administrator  may  specify a vesting schedule for all or any portion of an
Option  based  on  the achievement of performance objectives with respect to the
Company,  an  Affiliate,  Parent or Subsidiary, and/or Optionee, and as shall be
permissible  under  the  terms  of  the  Plan.

     (c)  Acceleration  of  Vesting.  The  vesting  of  one  or more outstanding
          -------------------------
Options  may  be  accelerated  by  the  Administrator  at such times and in such
amounts  as  it  determines  in its sole discretion.  The vesting of Options may
also  be  accelerated  in  connection  with  certain  corporate transactions, as
described  below.

6.5     Procedure  for  Exercise; Rights as a Shareholder.  An Option shall
        -------------------------------------------------
be deemed to be exercised when a Stock Option Contract Exercise Form in the form
attached  hereto  as  Schedule"B" has been duly completed, executed and given to

                                      E-6
<PAGE>

the Company in accordance with the terms of the Option by the person entitled to
exercise  the  Option  and  the Company has received full payment for the Shares
with  respect  to which the Option is exercised.  An Option may not be exercised
for  a  fraction  of  a  Share.  Full  payment  may,  as  authorized  by  the
Administrator,  consist  of any consideration and method of payment as described
above.  Until  the  issuance (as evidenced by the appropriate entry on the books
of  the  Company  or  of a duly authorized transfer agent of the Company) of the
stock  certificate evidencing such Shares, no right to vote or receive dividends
or  any  other  rights as a shareholder shall exist with respect to the Optioned
Stock,  notwithstanding the exercise of the Option.  The Company shall issue (or
cause to be issued) such stock certificate promptly upon exercise of the Option.
No  adjustment  will  be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as provided in
Section  8  of  the Plan.  Exercise of an Option in any manner shall result in a
decrease  in  the  number  of  Shares that thereafter may be available, both for
purposes  of  the Plan and for sale under the Option, by the number of Shares as
to  which  the  Option  is  exercised.

6.6     Exercise  After  Termination  of  Employment or Consulting Relationship.
        ------------------------------------------------------------------------
Except  as  otherwise  provided herein or in the applicable Option Agreement, in
the  event  of  termination  of a Optionee's Continuous Status as an Employee or
Consultant,  such  Optionee  may  exercise  his or her Option to the extent that
Optionee  was  entitled to exercise it at the date of such termination, but only
within three (3) months after the date of such termination (or such other longer
period  of  time  as  is  determined  by the Administrator).  In no event may an
Option be exercised later than the expiration date of the term of such Option as
set forth in the Option Agreement.  To the extent that Optionee was not entitled
to  exercise the Option at the date of such termination, or if Optionee does not
exercise  such  Option  to the extent so entitled within the time specified, the
Option  shall  terminate.

6.7     Disability  of Optionee. Notwithstanding the provisions set forth above,
        ------------------------
in  the event of termination of a Optionee's Continuous Status as an Employee or
Consultant  as  a result of his or her Disability, Optionee may, but only within
twelve  (12)  months  (or  such  other  longer  period  of  time,  if any, as is
determined  by  the Administrator) after the date of such termination (but in no
event  later than the expiration date of the term of such Option as set forth in
the  Option Agreement), exercise the Option to the extent he or she is otherwise
entitled  to  exercise  it  at the date of such termination.  To the extent that
Optionee  was not entitled to exercise the Option at the date of termination, or
if  Optionee  does not exercise such Option to the extent so entitled within the
time  specified  herein,  the  Option  shall  terminate.

6.8     Death  of  Optionee.  In the event of the death of a Optionee during the
        --------------------
period  of Continuous Status as an Employee or Consultant, or within thirty (30)
days following the termination of Optionee's Continuous Status as an Employee or
Consultant,  the  Option  may be exercised at any time within twelve (12) months
(or  such  other  longer  period  of  time,  if  any,  as  is  determined by the
Administrator)  after  the  date  of  death  (but  in  no  event  later than the
expiration  date  of  the  term  of  such  Option  as  set  forth  in the Option
Agreement),  by  Optionee's  estate  or  by  a  person who acquired the right to
exercise  the  Option by bequest or inheritance, but only to the extent Optionee
was  entitled  to  exercise  the Option at the date of death or, if earlier, the
date  of  termination of the Continuous Status as an Employee or Consultant.  To
the  extent that Optionee was not entitled to exercise the Option at the date of
death  or  termination,  as  the  case  may be, or if Optionee or the Optionee's
estate  (or,  as  applicable,  heirs,  personal  representative,  executor  or
administrator)  does  not  exercise such Option to the extent so entitled within
the  time  specified  herein,  the  Option  shall  terminate.

6.9     Termination  for Cause.  Notwithstanding the above, and unless otherwise
        -----------------------
set  forth  in  the  Option  Agreement,  if  Optionee's  Continuous Status as an
Employee  or  Consultant is terminated for Cause, the Option shall automatically
terminate  upon  first  notification to Optionee of such termination, unless the
Administrator  determines  otherwise.  If  Optionee's employment or services are
suspended  pending  an investigation of whether Optionee shall be terminated for

                                      E-7
<PAGE>
Cause,  all  of  Optionee's  rights under any Option likewise shall be suspended
during  the  period  of  investigation.

6.10     Rule  16b-3.Options granted to Reporting Persons shall comply with Rule
         ------------
16b-3  and  shall  contain  such additional conditions or restrictions as may be
required  thereunder to qualify for the maximum exemption for Plan transactions.

6.11     Buyout  Provisions.  The Administrator may at any time offer to buy out
         -------------------
for  a  payment  in  cash or Shares, an Option previously granted, based on such
terms  and  conditions  as  the Administrator shall establish and communicate to
Optionee  at  the  time  that  such  offer  is  made.

6.12     Early Issuance and Repurchase Rights.  The Administrator shall have the
         -------------------------------------
discretion to authorize the issuance of unvested Shares pursuant to the exercise
of  an  Option.  In  the  event  of  termination of the Optionee's employment or
services, all Shares issued upon exercise of an Option which are unvested at the
time  of  cessation  of employment or services shall be non-transferable and the
Company  shall have the right to require the Optionee to sell such Shares to the
Company  if permitted by Applicable Law.  The price to be paid by the Company to
repurchase the Shares is governed by the Option Agreement.  All of the Company's
outstanding  repurchase  rights under this Section are assignable by the Company
at  any  time and shall remain in full force and effect in the event of a Change
in  Control; provided that if the vesting of Options is accelerated as permitted
under the Plan, the repurchase rights under this Section shall terminate and all
Shares  subject  to  such terminated rights shall immediately vest in full.  The
Administrator  shall have the discretionary authority, exercisable either before
or  after  the  Optionee's  cessation  of  employment or services, to cancel the
Company's  outstanding  repurchase  rights  with  respect  to one or more Shares
purchased  or purchasable by the Optionee under an Option and thereby accelerate
the  vesting  of  such  Shares  in  whole  or  in  part  at  any  time.

             SECTION 7.  SATISFACTION OF WITHHOLDING TAX OBLIGATIONS

7.1     Withholding Tax.  At the discretion of the Administrator, Optionees
        ----------------
may  satisfy  withholding  obligations  as  provided  in this paragraph.  When a
Optionee  incurs tax liability in connection with an Option, which tax liability
is  subject  to  tax  withholding  under  Applicable  Law  (including,  without
limitation,  income and payroll withholding taxes), and Optionee is obligated to
pay  the  Company  an  amount required to be withheld under applicable tax laws,
Optionee  may  satisfy the tax withholding obligation by one or some combination
of  the  following  methods:  (a) by cash payment, (b) out of Optionee's current
compensation,  (c)  if  permitted  by  the  Administrator, in its discretion, by
surrendering to the Company Shares that (i) have been owned by Optionee for more
than  six  (6)  months  on  the date of surrender or such other period as may be
required  to  avoid  a  charge  to  the Company's earnings, and (ii) have a fair
market  value  on  the  date  of  surrender  equal  to  (or  less than, if other
consideration  is  paid  to  the  Company to satisfy the withholding obligation)
Optionee's  marginal  tax  rate  times  the  ordinary income recognized, plus an
amount  equal  to  the  Optionee's  share  of any applicable payroll withholding
taxes,  or (d) if permitted by the Administrator, in its discretion, by electing
to  have  the Company withhold from the Shares to be issued upon exercise of the
Option,  if  any,  that number of Shares having a Fair Market Value equal to the
amount  required to be withheld.  For this purpose, the Fair Market Value of the
Shares  to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined (the"Tax Date").  In making its determination as
to  the  type  of  consideration  to accept, the Administrator shall consider if
acceptance  of  such  consideration  may  be  reasonably expected to benefit the
Company  or  result  in  the  recognition of compensation expense (or additional
compensation  expense)  for  financial  reporting  purposes.

                                      E-8
<PAGE>

7.2     Reporting  Persons.  Any  surrender  by a Reporting Person of previously
        -------------------
owned  Shares  to  satisfy  tax withholding obligations arising upon exercise of
this  Option  must comply with the applicable provisions of Rule 16b-3 and shall
be  subject  to  such  additional  conditions or restrictions as may be required
thereunder  to qualify for the maximum exemption from Section 16 of the Exchange
Act  with  respect  to  Plan  transactions.

7.3     Form  of  Election.  All elections by a Optionee to have Shares withheld
        -------------------
to  satisfy  tax  withholding  obligations  shall  be  made in writing in a form
acceptable to the Administrator and shall be subject to the following additional
restrictions:

     (a)  the  election  must  be  made  on or prior to the applicable Tax Date;

     (b)  once  made,  the  election  shall  be irrevocable as to the particular
Shares  of  the  Option  as  to  which  the  election  is  made;

     (c)  if  Optionee  is a Reporting Person, the election must comply with the
applicable  provisions  of  Rule  16b-3  and shall be subject to such additional
conditions  or  restrictions  as  may  be required thereunder to qualify for the
maximum  exemption  from  Section  16  of  the Exchange Act with respect to Plan
transactions;  and

     (d)  all  elections  shall  be subject to the consent or disapproval of the
Administrator.

7.4     Deferral  of  Tax  Date.  In  the event the election to have Shares
        ------------------------
withheld  is made by a Optionee and the Tax Date is deferred under Section 83 of
the  Code because no election is filed under Section 83(b) of the Code, Optionee
shall  receive  the  full  number  of Shares with respect to which the Option is
exercised but such Optionee shall be unconditionally obligated to tender back to
the  Company  the  proper  number  of  Shares  on  the  Tax  Date.

                             SECTION 8.  ADJUSTMENTS

8.1     Changes  in  Capitalization.  Subject to any required action by the
        ----------------------------
shareholders  of  the  Company, the number of Shares covered by each outstanding
Option,  and  the  number of Shares that have been authorized for issuance under
the  Plan  but  as  to  which no Options have yet been granted or that have been
returned  to  the  Plan upon cancellation or expiration of an Option, as well as
the  price  per  Share  covered  by  each  such  outstanding  Option,  shall  be
proportionately  adjusted  for  any increase or decrease in the number of issued
shares  of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination, recapitalization or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common Stock
effected  without  receipt  of  consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to  have been"effected without receipt of consideration."  Such adjustment shall
be  made  by  the  Administrator,  whose  determination in that respect shall be
final, binding and conclusive.  Except as expressly provided herein, no issuance
by  the  Company of shares of stock of any class, or securities convertible into
shares  of stock of any class, shall affect, and no adjustment by reason thereof
shall  be  made  with  respect to, the number or price of shares of Common Stock
subject  to  an  Option.

8.2     Dissolution or Liquidation.  In the event of the proposed dissolution or
        ---------------------------
liquidation  of  the  Company, the Administrator shall notify Optionees at least
fifteen  (15)  days prior to such proposed action.  To the extent not previously
exercised,  Options will terminate immediately prior to the consummation of such
proposed  action.

                                      E-9
<PAGE>

8.3     Change  in Control Transactions.  Except as otherwise provided herein or
        --------------------------------
in  the Option Agreement, in the event of any Change in Control each Option that
is then outstanding shall, immediately prior to the specified effective date for
the  Change in Control, become 100% vested.  Notwithstanding the foregoing, such
vesting  shall not so accelerate if and to the extent that (a) in the opinion of
the  Company's  accountants,  it  would  render unavailable"pooling of interest"
accounting  for  a  transaction that would otherwise qualify for such accounting
treatment;  or  (b) in the case of an Option, such Option is, in connection with
the  Change  in  Control,  either  continued in effect, assumed by the successor
corporation  (or  parent  thereof)  or  replaced with a comparable award for the
purchase  of  shares  of  the capital stock of the successor corporation (or its
parent corporation).  If the Administrator determines that such an assumption or
replacement  will  be made, the Administrator shall give the Optionees notice of
such determination, and of the provisions of such assumption or replacement, and
any  adjustments  made  (x)  to  the  number  and  kind of shares subject to the
outstanding  Options  (or  to the options in substitution therefore), (y) to the
exercise  prices,  and/or  (z) to the terms and conditions of the stock options.
Any such determination shall be made in the sole discretion of the Administrator
and  shall  be final, conclusive and binding on all Optionees.  In the event the
Optionee's  employment  or services should terminate within six months following
such  Change  in  Control, and such Option was continued, assumed or replaced in
the Change in Control and was not otherwise accelerated at that time, all of the
unvested  shares  subject  to  such  Option  shall  vest  immediately  upon such
termination,  unless  such  employment or services are terminated by the Company
for  Cause  or  by  the Optionee voluntarily without Good Reason.  To the extent
Options  are  not  continued  or  assumed  by  the  successor  corporation or an
affiliate  thereof,  all unexercised Options shall terminate and cease to remain
outstanding  immediately  following  the  consummation of the Change in Control.

8.4     Certain  Distributions.  In  the  event  of  any  distribution  to  the
        -----------------------
Company's  shareholders of securities of any other entity or other assets (other
than  dividends  payable  in  cash  or  stock of the Company) without receipt of
consideration  by  the  Company,  the  Administrator  may,  in  its  discretion,
appropriately  adjust  the  price  per  share  of  Common  Stock covered by each
outstanding  Option  to  reflect  the  effect  of  such  distribution.

                               SECTION 9.  GENERAL

9.1     Transferability  of  Options.  Except  as otherwise provided in the
        -----------------------------
applicable  Option  Agreement,  Options  granted  under  this  Plan  may  not be
transferred,  assigned,  pledged  or  hypothecated  in  any  manner  (whether by
operation  of  law  or  otherwise)  other  than by will or by applicable laws of
descent  and  distribution, and shall not be subject to execution, attachment or
similar  process,  and  may  be  exercised  or  purchased during the lifetime of
Optionee  only by Optionee.  Notwithstanding the foregoing, any Option Agreement
may  provide  (or  be  amended to provide) that an Option to which it relates is
transferable without payment of consideration to immediate family members of the
Optionee  or  to  trusts,  partnerships  or family holding companies established
exclusively  for the benefit of the Optionee and the Optionee's immediate family
members.  Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose  of  any  Option  or  of  any  right or privilege conferred by this Plan
contrary  to  the provisions hereof, or upon the sale, levy or any attachment or
similar  process  upon  the  rights  and privileges conferred by this Plan, such
Option  shall  thereupon  terminate  and  become  null  and  void.

9.2     Date  of Grant.  The date of grant of an Option shall, for all purposes,
        ---------------
be the date on which the Administrator (or an officer to whom authority to grant
options  has  been  delegated  by  the  Administrator)  makes  the determination
granting  such  Option, or such later date as is determined by the Administrator

                                      E-10
<PAGE>

or  officer.  Notice  of  the  determination  shall be given to each Employee or
Consultant  to  whom  an Option is so granted within a reasonable time after the
date  of  such  grant.

9.3     Conditions Upon Issuance Of Shares.  Shares shall not be issued pursuant
        -----------------------------------
to the exercise of an Option unless the exercise of such Option and the issuance
and  delivery  of  such  Shares  pursuant thereto shall comply with all relevant
provisions  of  law,  including,  without  limitation,  the  Securities Act, the
Exchange  Act,  the  rules  and  regulations  promulgated  thereunder,  and  the
requirements  of  any  Stock  Exchange.  As  a  condition  to the exercise of an
Option,  the  Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares  if,  in the opinion of counsel for the Company, such a representation is
required  by  law.

9.4     Amendment  and  Termination.  The  Board  may  at any time amend, alter,
        ----------------------------
suspend  or  discontinue  the  Plan, but no amendment, alteration, suspension or
discontinuation shall be made that would impair the rights of any Optionee under
any Option previously granted, unless mutually agreed otherwise, which agreement
must  be in writing and signed by Optionee and the Company.  In addition, to the
extent  necessary  to  comply  with  Rule  16b-3 (or any other applicable law or
regulation, including the requirements of any Stock Exchange), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree  as  required.

9.5     Rights  of  First  Refusal.  Until  the  date  on  which  the  initial
        ---------------------------
registration  of  the  Common Stock under Section 12(b) or 12(g) of the Exchange
Act  first  becomes effective, the Company shall have the right of first refusal
with  respect  to  any  proposed  sale or other disposition by a Optionee of any
Shares issued pursuant to an Option granted under the Plan.  Such right of first
refusal  shall  be  exercisable  in  accordance  with  the  terms and conditions
established  by the Plan Administrator and set forth in the agreement evidencing
such  right.

9.6     Reservation  of Shares.  The Company, during the term of this Plan, will
        -----------------------
at  all  times  reserve  and  keep  available  such number of Shares as shall be
sufficient  to  satisfy  the  requirements  of  the  Plan.  The inability of the
Company  to obtain authority from any regulatory body having jurisdiction, which
authority  is  deemed  by  the  Company's  counsel to be necessary to the lawful
issuance  and  sale  of  any  Shares hereunder, shall relieve the Company of any
liability  in  respect  of  the failure to issue or sell such Shares as to which
such  requisite  authority  shall  not  have  been  obtained.

9.7     Information  to  Optionees.  As  soon as administratively feasible after
        ---------------------------
making  any  Option  under the Plan, the Company shall provide to the Optionee a
copy  of  the  Plan  and  a  copy  of  any  relevant  agreement(s).

9.8     Employment  Relationship.  The  Plan  shall not confer upon any Optionee
        -------------------------
any  right  with  respect to continuation of Optionee's employment or consulting
relationship  with  the  Company,  nor  shall  it interfere in any way with such
Optionee's  right  or the Company's right to terminate the Optionee's employment
or  consulting  relationship  at  any  time,  with  or  without  cause.

9.9     Term of Plan.  The Plan shall become effective upon the earlier to occur
        -------------
of its adoption by the Board of Directors or its approval by the shareholders of
the  Company.  It  shall  continue in effect for a term of ten (10) years unless
sooner  terminated  as  permitted  herein.

                                      E-11
<PAGE>

This  Plan  was  adopted  by  the  Board  of  Directors  on  February  4,  2004.

Signature: /s/ Anthony  J.  Alda
           ---------------------
Name:      Anthony  J.  Alda
           -----------------
Title:     Chairman  of  the  Board  of  Directors
           ---------------------------------------

                                      E-12
<PAGE>

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