Document:

Exhibit 4.49

    

    Dated
      the 1st day of November 2006

     

    HUA
      YANG PRINTING HOLDINGS CO. LTD.

    (as
      Borrower)

     

    and

     

    CORNERSTONE
      OVERSEAS INVESTMENTS LIMITED

    (as
      Lender)

     

    
      
        

      

    

     

    AGREEMENT
      FOR

    HK$35,000,000
      FACILITY

     

    
      

    

    

    Solicitors

    普笵糘律師
事
務
      所

     

    35th
      Floor, Two International Finance Centre,

    8
      Finance Street,

    Central,
      Hong Kong

     

    Tel:
      (852) 2511 5100 Fax: (852) 2511 9515

    Website:
      www.prestongates.com

     

    Our
      ref: 42547-00004/NKA/MHCW/COYY

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    CONTENTS

    

      
        	
                Clause

              	 	
                Heading

              	 	
                Page

              	 
	
                1.

              	 	INTERPRETATION	 	 	
                3

              	 
	
                2.

              	 	THE
                FACILITY	 	 	
                6

              	 
	
                3.

              	 	ADVANCE	 	 	
                6

              	 
	
                4.

              	 	INTEREST	 	 	
                6

              	 
	
                5.

              	 	REPAYMENT
                AND PREPAYMENT	 	 	
                7

              	 
	
                6.

              	 	CHANGE
                OF LAW OR CIRCUMSTANCES	 	 	
                7

              	 
	
                7.

              	 	TAXES
                AND OTHER DEDUCTIONS	 	 	
                7

              	 
	
                8.

              	 	FEES
                AND EXPENSES	 	 	
                8

              	 
	
                9.

              	 	PAYMENTS
                AND EVIDENCE OF DEBT	 	 	
                8

              	 
	
                10.

              	 	WAIVER
                AND SEVERABILITY	 	 	
                9

              	 
	
                11.

              	 	MISCELLANEOUS	 	 	
                9

              	 
	
                12.

              	 	ASSIGNMENT	 	 	
                10

              	 
	
                13.

              	 	NOTICES	 	 	
                11

              	 
	
                14.

              	 	GOVERNING
                LAW AND JURISDICTION	 	 	
                11

              	 
	 	 	 	 	 	 	 
	
                Execution

              	 	 	
                12

              	 

      

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    THIS
      AGREEMENT
      is made
      on the 1st day of November 2006

     

    BETWEEN:

     

    
      	
              (1)

            	
              HUA
                YANG PRINTING HOLDINGS CO. LTD.,
                a
                company incorporated in Hong Kong with limited liability and whose
                registered office is at Flat B, 25/F, Block 1, Taiping Industrial
                Centre,
                57 Ting Kok Road, Tai Po, New Territories, Hong Kong, as borrower
                (“Borrower”);
                and

            

    

     

    
      	
              (2)

            	
              CORNERSTONE
                OVERSEAS INVESTMENTS LIMITED,
                a
                company incorporated in British Virgin Islands - whose registered
                office
                is PO Box 957, Offshore Incorporations Centre, Road Town, Tortola,
                British
                Virgin Islands, as lender (“Lender”).

            

    

     

    WHEREAS:

     

    
      	
              (A)

            	
              The
                Borrower is a wholly-owned subsidiary of Grand Toys International
                Limited
                (“Grand
                Toys”),
                a
                Hong Kong corporation and listed on the NASDAQ (Stock Code:
                GRIN).

            

    

     

    
      	
              (B)

            	
              The
                Lender is a company controlled by Mr. Jeff Hsieh Cheng which in turn
                is
                Grand Toys’ majority shareholder.

            

    

     

    
      	
              (C)

            	
              The
                Lender agrees to lend and the Borrower agrees to borrow the Facility
                (as
                defined below) subject to and upon the terms and conditions of this
                Agreement.

            

    

     

    IT
      IS HEREBY AGREED
      as
      follows:

     

    
      	
              1.

            	
              INTERPRETATION

            

    

     

    
      	
              1.1

            	
              Definitions

            

    

     

    In
      this
      Agreement, unless the context requires otherwise:

     

    
      	
              “Advance”

            	 	
              means
                each lending under the Facility pursuant to Clause 3 or, as the
                context may require, the principal amount advanced to the Borrower
                on each
                such occasion;

            
	 	 	 
	
              “Banking
                Day”

            	 	
              means
                a day (excluding Saturday and Sunday) on which banks are open for
                business
                in Hong Kong;

            
	 	 	
            
	
              “Charge”

            	 	means:
	 	 	 	 
	 	 	(a)	
              any
                mortgage, charge, pledge, lien, encumbrance, hypothecation or other
                security interest or security arrangement of any
                kind;

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	 	 	(b)	
              any
                arrangement whereby any rights are subordinated to any rights of
                any third
                party; and

            
	 	 	 	 
	 	 	(c)	
              any
                contractual right of set off; and

            
	 	 	 	 
	 	 	(d)	
              the
                interest of a vendor or lessor under any conditional sale agreement,
                lease, hire purchase agreement or other title retention arrangement
                other
                than an interest in a lease or hire purchase agreement which arose
                in the
                ordinary course of business;

            
	 	 	 
	
              “Facility”

            	 	
              means
                the loan facility to be made available under this
                Agreement;

            
	 	 	 
	
              “Grand
                Toys”

            	 	
              shall
                have the meaning prescribed to it in Recital A;

            
	 	 	 
	
              “HK
                Dollars”
                and “HK$”

            	 	
              mean
                the lawful currency for the time being of Hong Kong;

            
	 	 	 
	
              “Hong
                Kong”

            	 	
              means
                the Hong Kong Special Administrative Region of the People’s Republic of
                China;

            
	 	 	 
	
              “Loan”

            	 	
              means
                the aggregate principal amount drawn and for the time being outstanding
                under the Facility; and

            
	 	 	 
	
              “Unpaid
                Sum”

            	 	
              shall
                have the meaning ascribed to it in
                Clause 4.4.

            

    

    

    
      	
              1.2

            	
              Construction

            

    

     

    In
      this
      Agreement, unless the context requires otherwise, any reference to:

     

    
      	
              “including” or “includes” 

            	 	means
              including or includes without limitation;
	 	 	 
	
              “indebtedness”

            	 	includes
              any obligation of any person for the payment or repayment of money,
              whether present or future, actual or contingent, including but not
              limited
              to any such obligation:
	 	 	 	 
	 	 	(a)	
              under
                or in respect of any acceptance, bill, bond, debenture, note or similar
                instrument;

            
	 	 	 	 
	 	 	(b)	
              under
                or in respect of any guarantee, indemnity, counter security or other
                assurance against financial loss;

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	 	(c)	
              in
                respect of the purchase, hire or lease of any asset or service;
                or

            
	 	 	 	 
	 	 	(d)	
              in
                respect of any indebtedness of any other person whether or not secured
                by
                or benefiting from a Charge on any property or asset of such
                person;

            
	 	 	 	 
	
              “law” and/or “regulation”

            	 	
              includes
                any constitutional provisions, treaties, conventions, statutes, acts,
                laws, decrees, ordinances, subsidiary and subordinate legislation,
                orders,
                rules and regulations having the force of law and rules of civil
                and
                common law and equity;

            
	 	 	 
	
              “order”

            	 	
              includes
                any judgment, injunction, decree, determination or award of any court,
                arbitration or administrative tribunal;

            
	 	 	 
	
              “person”

            	 	
              includes
                any individual, company, body corporate or unincorporated or other
                juridical person, partnership, firm, joint venture or trust or any
                federation, state or subdivision thereof or any government or agency
                of
                any thereof;

            
	 	 	 
	
              “tax”

            	 	
              includes
                any tax, levy, duty, charge, impost, fee, deduction or withholding
                of any
                nature now or hereafter imposed, levied, collected, withheld or assessed
                by any taxing or other authority and includes any interest, penalty
                or
                other charge payable or claimed in respect thereof and “taxation”
                shall be construed accordingly.

            

    

    

    
      	
              1.3

            	
              Successors
                and Assigns

            

    

     

    The
      expressions “Borrower”
and
      “Lender”
shall
      where the context permits include their respective successors and permitted
      assigns and any persons deriving title under them.

     

    
      	
              1.4

            	
              Miscellaneous

            

    

     

    In
      this
      Agreement, unless the context requires otherwise, references to statutes or
      statutory provisions shall be construed as references to such statutes or
      statutory provisions as the same may be or have been replaced, amended, modified
      or re enacted from time to time; words importing the singular include the plural
      and vice versa and words importing a gender include every gender; unless
      otherwise stated, references to Clauses and Schedule are to clauses of and
      schedule to this Agreement and references to this Agreement include its
      Schedule. Clause headings are inserted for reference only and shall be ignored
      in construing this Agreement.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              THE
                FACILITY

            

    

     

    
      	
              2.1

            	
              Amount

            

    

     

    Subject
      to the provisions of this Agreement the aggregate principal amount of the
      Facility available to the Borrower is THIRTY-FIVE MILLION HK Dollars
      (HK$35,000,000).

     

    
      	
              2.2

            	
              Purpose

            

    

     

    The
      proceeds of the Facility was used by the Borrower to settle the bank loan
      outstanding from the Borrower to Industrial and Commercial Bank of China (Asia)
      Limited on November 2006.

     

    
      	
              3.

            	
              ADVANCE

            

    

     

    
      	
              3.1

            	
              Availability
                of Advance

            

    

     

    Subject
      to the terms and conditions of this Agreement, the Facility shall be advanced
      by
      the Lender to the Borrower in such currency and on such date as shall be
      nominated by the Borrower.

     

    
      	
              4.

            	
              INTEREST

            

    

     

    
      	
              4.1

            	
              Interest

            

    

     

    The
      Borrower shall pay interest on the Loan in accordance with the provisions of
      this Clause 4 on or before each scheduled repayment date as set out in
      Schedule I.

     

    
      	
              4.2

            	
              Rate
                of Interest

            

    

     

    The
      rate
      of interest applicable to the Loan or the relevant part thereof shall be Hong
      Kong Dollar Prime Rate as quoted by The Hongkong Shanghai Banking Corporation
      Limited plus one per cent (1%) per annum.

     

    
      	
              4.3

            	
              Calculation
                of Interest

            

    

     

    Interest
      at the rate determined as aforesaid shall accrue from the date of drawdown
      until
      the date of repayment from day to day, shall be calculated on the basis of
      the
      actual number of days elapsed and a 360 day year, including the first day of
      the
      period during which it accrues but excluding the last, and shall be paid in
      arrears on each scheduled repayment date.

     

    
      	
              4.4

            	
              Default
                Interest

            

    

     

    In
      the
      event of default of payment by the Borrower of all or any part of the principal
      amount of the Facility and interest thereon (“Unpaid
      Sum”)
      in
      accordance with clause 5 below, default interest on the Unpaid Sum shall
      accrue from the due date until the date of payment at the fixed rate of 18%
      per
      annum.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              5.

            	
              REPAYMENT
                AND PREPAYMENT

            

    

     

    
      	
              5.1

            	
              Repayment
                

            

    

     

    Without
      prejudice to Clause 5.2, the Borrower shall repay the Loan together with
      any interest accrued thereon on or before each scheduled repayment date as
      set
      out in Schedule I.

     

    
      	
              5.2

            	
              Voluntary
                Prepayment

            

    

     

    The
      Borrower may, without any penalty, premium or other prepayment fee, prepay
      all
      or part of the Loan at any time, provided that at the time of prepayment, the
      Borrower shall also pay to the Lender all other sums (if any) then due and
      payable by the Borrower under this Agreement.

     

    
      	
              5.3

            	
              Provisions
                applicable to Prepayments

            

    

     

    Any
      notice of prepayment given by the Borrower under any provision of this Agreement
      shall be irrevocable and the Borrower shall be bound to make a prepayment in
      accordance therewith. Amounts prepaid may not be re-borrowed under this
      Agreement. The interest paid by the Borrower under Clause 4.2 shall be
      non-refundable notwithstanding any prepayment.

     

    
      	
              6.

            	
              CHANGE
                OF LAW OR
                CIRCUMSTANCES

            

    

     

    If
      it
      becomes unlawful for the Lender to give effect to its obligations hereunder,
      the
      Lender shall so notify the Borrower, whereupon the Facility shall be cancelled.
      The Borrower shall forthwith after such notification, or such longer period
      as
      the Lender may certify as being permitted by the relevant law, prepay the Loan
      in full together with interest accrued thereon to the date of prepayment and
      any
      other monies owing hereunder.

     

    
      	
              7.

            	
              TAXES
                AND OTHER DEDUCTIONS

            

    

     

    
      	
              7.1

            	
              No
                Deductions or Withholdings

            

    

     

    All
      sums
      payable by the Borrower under this Agreement shall be paid in full without
      set
      off or counterclaim or any restriction or condition and free and clear of any
      tax or other deductions or withholdings of any nature. If the Borrower or any
      other person is required by any law or regulation to make any deduction or
      withholding (on account of tax or otherwise) from any payment, the Borrower
      shall, together with such payment, pay such additional amount as will ensure
      that the Lender receives (free and clear of any tax or other deductions or
      withholdings) the full amount which it would have received if no such deduction
      or withholding had been required. The Borrower shall promptly forward to the
      Lender copies of official receipts or other evidence showing that the full
      amount of any such deduction or withholding has been paid over to the relevant
      taxation or other authority.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              7.2

            	
              Advance
                Notification

            

    

     

    If
      at any
      time the Borrower becomes aware that any such deduction, withholding or payment
      contemplated by Clause 7.1 is or will be required, they shall immediately
      notify the Lender and supply all available details thereof.

     

    
      	
              8.

            	
              FEES
                AND EXPENSES

            

    

     

    Each
      party shall bear its own costs and expenses incurred in connection with the
      negotiation, preparation, execution and (where relevant) registration of this
      Agreement and any other documentation required hereunder or thereunder and
      the
      arrangement of the Facility.

     

    
      	
              9.

            	
              PAYMENTS
                AND EVIDENCE OF DEBT

            

    

     

    
      	
              9.1

            	
              Advances

            

    

     

    The
      amounts advanced by the Lender under this Agreement were utilized by the
      Borrower to settle its bank loan outstanding due to Industrial and Commercial
      Bank of China (Asia) Limited on November 2006.

     

    
      	
              9.2

            	
              Payments
                by Borrower

            

    

     

    The
      monthly principal payment by the Borrower under this Agreement shall be made
      to
      the Lender by issuing eighteen (18) posted dated cheques payable to “Cornerstone
      Overseas Investments, Limited at the end of the each calendar month from 31
      January 2007 to 30 June 2008immediately upon completion of this Agreement.
      At
      the first day of each calendar month, the Lender shall issue debit note
      regarding the interest payment to the Borrower and the Borrower shall within
      five business working days deposit the relevant interest money into the Lender’s
      bank account maintained with Industrial and Commercial Bank of China (Asia)
      Limited and the relevant bank account number is 861-011-117686 and return the
      original bank-in-slip to the Borrower for evidence upon payment.

     

    
      	
              9.3

            	
              Allocation
                of Receipts

            

    

     

    If
      any
      amount received by the Lender is less than the full amount due, the Lender
      shall
      have the right to allocate the amount received towards principal, interest
      and/or other sums owing hereunder as it considers appropriate.

     

    
      	
              9.4

            	
              Banking
                Days

            

    

     

    If
      any
      sum would otherwise become due for payment on a non Banking Day that sum shall
      become due on the next following Banking Day and interest shall be adjusted
      accordingly, except that if any repayment due under Clause 5.1 would then
      become due in another calendar month such repayment shall become due on the
      immediately preceding Banking Day.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              9.5

            	
              Evidence
                of Debt

            

    

     

    The
      Lender shall maintain on its books in accordance with its usual practice a
      set
      of accounts recording the amounts from time to time owing by the Borrower
      hereunder. In any legal proceeding and otherwise for the purposes of this
      Agreement the entries made in such accounts shall, in the absence of manifest
      error, be conclusive and binding on the Borrower as to the existence and amounts
      of the obligations of the Borrower recorded therein.

     

    
      	
              9.6

            	
              Certificate
                Conclusive and Binding

            

    

     

    Where
      any
      provision of this Agreement provides that the Lender may certify or determine
      an
      amount or rate payable by the Borrower, a debit note to be issued by the Lender
      as to such amount or rate shall be conclusive and binding on the Borrower in
      the
      absence of manifest error.

     

    
      	
              10.

            	
              WAIVER
                AND SEVERABILITY

            

    

     

    Time
      is
      of the essence of this Agreement but no failure or delay by the Lender in
      exercising any right, power or remedy hereunder shall impair such right, power
      or remedy or operate as a waiver thereof, nor shall any single or partial
      exercise of the same preclude any further exercise thereof or the exercise
      of
      any other right, power or remedy. The rights, powers and remedies herein
      provided are cumulative and do not exclude any other rights, powers and remedies
      provided by law. If at any time any provision of this Agreement is or becomes
      illegal, invalid or unenforceable in any respect under the law of any
      jurisdiction, the legality, validity and enforceability of such provision under
      the law of any other jurisdiction, and of the remaining provisions of this
      Agreement, shall not be affected or impaired thereby.

     

    
      	
              11.

            	
              MISCELLANEOUS

            

    

     

    
      	
              11.1

            	
              Execution

            

    

     

    This
      Agreement shall become effective as of the date hereof.

     

    
      	
              11.2

            	
              Entire
                Agreement

            

    

     

    This
      Agreement and the documents referred to herein constitute the entire obligation
      of the parties hereto and supersede any previous expressions of intent or
      understandings in respect of this transaction.

     

    
      	
              11.3

            	
              Amendments
                in Writing

            

    

     

    No
      amendment to this Agreement shall be valid unless it is evidenced by a written
      agreement executed by the parties hereto.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              11.4

            	
              Counterparts

            

    

     

    This
      Agreement may be executed in counterparts and by different parties on separate
      counterparts which when taken together shall be deemed to constitute one
      agreement.

     

    
      	
              11.5

            	
              Legal
                Representation

            

    

     

    The
      parties hereby acknowledge that Preston Gates & Ellis only act for the
      Borrower in connection with this Agreement, and the Lender has been duly advised
      to seek independent legal advice and to obtain separate legal
      representation.

     

    
      	
              12.

            	
              ASSIGNMENT

            

    

     

    
      	
              12.1

            	
              The
                parties hereto agree that neither the Borrower nor the Lender shall
                have
                the right to assign or transfer any of its rights or obligations
                hereunder
                unless with written consent of the other
                party.

            

    

     

    
      	
              12.2

            	
              Confidentiality

            

    

     

    Each
      party to this Agreement (together the “Parties”
and
      separately, each a “Party”)
      shall
      not disclose to any third party any information relating to the Facility or
      any
      information consisting of the terms of this arrangement, evaluation materials,
      financial statements or any other information which has commercial or other
      value and is confidential or proprietary in nature, and otherwise not generally
      available to the public (the “Confidential
      Information”).
      The
      Parties agree that all such Confidential Information which is disclosed will
      be
      (i) treated confidentially by each Party and their employees, affiliates and
      agents, and (ii) used solely in connection with the performance of the Parties
      obligations under this Agreement and not for any other purpose. The Parties
      further agree to use best efforts to safeguard the Confidential Information
      from
      any unauthorized use and with at least the same duty of care that each Party
      and
      their respective employees and agents use to safeguard their own Confidential
      Information and will protect against distribution, reproduction or disclosure
      to
      anyone other than their directors, officers, employees or agents who need to
      know such information solely in connection with this Agreement. The foregoing
      provisions in this Clause 18.4 shall not apply to any disclosure required
      by any applicable law or regulation of Hong Kong or elsewhere. The provisions
      of
      this Clause 18.4 shall survive any termination of this
      Agreement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              13.

            	
              NOTICES

            

    

     

    
      	
              13.1

            	
              Delivery

            

    

     

    Each
      notice, demand or other communication to be given or made under this Agreement
      shall be in writing and delivered or sent to the relevant party at its address
      or fax number set out below (or such other address or fax number as the
      addressee has by five (5) days’ prior written notice specified to the other
      party):

     

    
      	
              To
                the Lender:

            	 	
              UG202,
                UG2/F, Chinachem Golden Plaza, 77 Mody Road, Tsimshatsui, Kowloon,
                Hong
                Kong

              Fax
                Number: 852-2628
                1212

              Attention: Ms.
                Pansy Yiu/Venus Tso

            
	 	 	 
	
              To
                the Borrower:

            	 	
              Flat
                B, 25/F., Block 1, Taiping Industrial Centre, 57 Ting Kok Road, Tai
                Po,
                

              New
                Territories, Hong Kong

              Fax
                Number: 852-2411
                0235

              Attention: Mr.
                Alan SL Chan

            

    

    

    
      	
              13.2

            	
              Deemed
                Delivery

            

    

     

    Any
      notice, demand or other communication so addressed to the relevant party shall
      be deemed to have been delivered (a) if given or made by hand, when actually
      delivered to the relevant address or (b) if given or made by fax, when
      despatched with a report of the sender confirming successful
      transmission.

     

    
      	
              14.

            	
              GOVERNING
                LAW AND JURISDICTION

            

    

     

    
      	
              14.1

            	
              Law

            

    

     

    This
      Agreement and the rights and obligations of the parties hereunder shall be
      governed by and construed in accordance with the laws of Hong Kong.

     

    
      	
              14.2

            	
              Jurisdiction

            

    

     

    The
      parties irrevocably agree with each other that any legal action or proceeding
      arising out of or relating to this Agreement may be brought in the courts of
      Hong Kong and irrevocably submits to the non exclusive jurisdiction of such
      courts.

     

    IN
      WITNESS WHEREOF
      this
      Agreement has been executed on the day and year first above
      written.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    THE
      BORROWER

    

      
        	
                SIGNED
                  by KEVIN MURPHY, 

              	
                )

              	
              
	
                a
                  director of

              	
                )

              	
                 

              
	
                HUA
                  YANG PRINTING HOLDINGS

              	
                )

              	
                 

              
	
                CO.
                  LTD.

              	
                )

              	
                 

              
	
                in
                  the presence of:

              	
                )

              	
                 

              
	 	
                )

              	
                 

              
	 	
                )

              	
                 

              
	
                /s/
                  Chan Shui Lun

              	
                )

              	
                 

              
	
                

                Signature
                  of Witness

              	
                )
                  
                  )

                

              	
                 

              
	 	
                )

              	
                 

              
	 	
                )

              	 
	
                CHAN
                  SHUI LUN

              	
                
                  )

                

              	
                
                  /s/
                    Kevin Murphy

                

              
	
                
                  

                

                Name
                  of Witness (block letters)

              	
                )

              	
                
                  

                  Signature
                    of Kevin Murphy

                

              

 

        THE
          LENDER

      

    

    

      
        	
                SIGNED
                  by JEFF HSIEH CHENG,

              	
                )

              	
              
	
                a
                  director of

              	
                )

              	
                 

              
	
                CORNERSTONE
                  OVERSEAS

              	
                )

              	
                 

              
	
                INVESTMENTS
                  LIMITED

              	
                )

              	
                 

              
	
                in
                  the presence of:

              	
                )

              	
                 

              
	 	
                )

              	
                 

              
	 	
                )

              	
                 

              
	
                
                  /s/
                    Yip Po Kuen

                  
                    

                    Signature
                      of Witness

                  

                

              	
                )
                  
                   

                  )

                

              	 
	
              	
                )

              	 
	 	
                )

              	 
	
                YIP
                  PO KUEN

                
                  

                

                Name
                  of Witness (block letters)

              	
                )

                )

              	
                /s/
                  Jeff Hsieh Cheng 
                  

                

                Signature
                  of Jeff Hsieh Cheng

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE I

     

    REPAYMENT
      SCHEDULE

     

    
      	
              Repayment
                date

            	 	
              Principal

              HK$

            	 
	
              31
                January 2007

            	 	 	
              1,500,000

            	 
	
              28
                February 2007

            	 	 	
              1,500,000

            	 
	
              31
                March 2007

            	 	 	
              1,500,000

            	 
	
              30
                April 2007

            	 	 	
              1,500,000

            	 
	
              31
                May 2007

            	 	 	
              2,500,000

            	 
	
              30
                June 2007

            	 	 	
              2,500,000

            	 
	
              31
                July 2007

            	 	 	
              2,500,000

            	 
	
              31
                August 2007

            	 	 	
              2,500,000

            	 
	
              30
                September 2007

            	 	 	
              2,500,000

            	 
	
              31
                October 2007

            	 	 	
              2,500,000

            	 
	
              30
                November 2007

            	 	 	
              1,500,000

            	 
	
              31
                December 2007

            	 	 	
              1,500,000

            	 
	
              31
                January 2008

            	 	 	
              1,500,000

            	 
	
              28
                February 2008

            	 	 	
              1,500,000

            	 
	
              31
                March 2008

            	 	 	
              1,500,000

            	 
	
              30
                April 2008

            	 	 	
              1,500,000

            	 
	
              31
                May 2008

            	 	 	
              2,500,000

            	 
	
              30
                June 2008

            	 	 	
              2,500,000

            	 
	 	 	 	
              35,000,000ASIANADA,
      INC.

    

    2007
      EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN

    

     

    
      
        	
                1.

              	
                DEFINITIONS.

              

      

    

    

    
      	 	
              Unless
                otherwise specified or unless the context otherwise requires, the
                following terms, as used in this Asianada, Inc. 2007 Employee, Director
                and Consultant Stock Plan, have the following
                meanings:

            

    

    

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

            

    

    

    
      	 	 	
              Affiliate
                means a corporation which, for purposes of Section 424 of the Code,
                is a
                parent or subsidiary of the Company, direct or
                indirect.

            

    

    

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

            

    

    

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

            

    

    

    
      	 	 	
              Cause
                means dishonesty with respect to the Company or any Affiliate,
                insubordination, substantial malfeasance or non-feasance of duty,
                unauthorized disclosure of confidential information, breach by the
                Participant of any provision of any employment, consulting, advisory,
                nondisclosure, non-competition or similar agreement between the
                Participant and the Company, and conduct substantially prejudicial
                to the
                business of the Company or any Affiliate; provided, however, that
                any
                provision in an agreement between the Participant and the Company
                or an
                Affiliate, which contains a conflicting definition of Cause for
                termination and which is in effect at the time of such termination,
                shall
                supersede this definition with respect to that Participant. The
                determination of the Administrator as to the existence of Cause will
                be
                conclusive on the Participant and the
                Company.

            

    

    

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

            

    

    

    
      	 	 	
              Committee
                means the committee of the Board of Directors to which the Board
                of
                Directors has delegated power to act under or pursuant to the provisions
                of the Plan.

            

    

    

    
      	 	 	
              Common
                Stock
                means shares of the Company’s common stock, $.001 par value per
                share.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	 	
              Company
                means Asianada, Inc., a Delaware
                corporation.

            

    

    

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

            

    

    

    
      	 	 	
              Employee
                means any employee of the Company or of an Affiliate (including,
                without
                limitation, an employee who is also serving as an officer or director
                of
                the Company or of an Affiliate), designated by the Administrator
                to be
                eligible to be granted one or more Stock Rights under the
                Plan.

            

    

    

    
      	 	 	
              Fair
                Market Value
                of
                a Share of Common Stock means:

            

    

    

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

    

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

    

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

    

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

            

    

    

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

            

    

    

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

            

    

    

    
      	 	 	
              Participant
                means an Employee, director or consultant of the Company or an Affiliate
                to whom one or more Stock Rights are granted under the Plan. As
                used herein, “Participant” shall include “Participant’s Survivors” where
                the context requires.

            

    

    

    
      	 	 	
              Plan
                means this Asianada, Inc. 2007 Employee, Director and Consultant
                Stock
                Plan.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

            

    

    

    
      	 	 	
              Stock-Based
                Award
                means a grant by the Company under the Plan of an equity award or
                an
                equity based award which is not an Option or a Stock Grant.
                

            

    

    

    
      	 	 	
              Stock
                Grant
                means a grant by the Company of Shares under the
                Plan.

            

    

    

    
      	 	 	
              Stock
                Right
                means a right to Shares or the value of Shares of the Company granted
                pursuant to the Plan -- an ISO, a Non-Qualified Option, a Stock Grant
                or a
                Stock-Based Award.

            

    

    

    
      	 	 	
              Survivor
                means a deceased Participant’s legal representatives and/or any person or
                persons who acquired the Participant’s rights to a Stock Right by will or
                by the laws of descent and
                distribution.

            

    

    

    

      
        	
                2.

              	
                PURPOSES
                  OF THE PLAN.

              

      

    

    

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

    

    

    
      	
              3.

            	
              SHARES
                SUBJECT TO THE PLAN.

            

    

    

    (a) The
      number of Shares which may be issued from time to time pursuant to this Plan
      shall be one million (1,000,000) shares, or the equivalent of such number of
      Shares after the Administrator, in its sole discretion, has interpreted the
      effect of any future stock split, stock dividend, combination, recapitalization
      or similar transaction in accordance with Paragraph 24 of the Plan.

    

    (b)
      If an
      Option ceases to be “outstanding”, in whole or in part (other than by exercise),
      or if the Company shall reacquire (at not more than its original issuance price)
      any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any
      Stock Right expires or is forfeited, cancelled, or otherwise terminated or
      results in any Shares not being issued, the unissued Shares which were subject
      to such Stock Right shall again be available for issuance from time to time
      pursuant to this Plan. Notwithstanding the foregoing, if a Stock Right is
      exercised, in whole or in part, by tender of Shares or if the Company’s tax
      withholding obligation is satisfied by withholding Shares, the number of Shares
      deemed to have been issued under the Plan for purposes of the limitation set
      forth in Paragraph 3(a) above shall be the number of Shares that were subject
      to
      the Stock Right or portion thereof, and not the net number of Shares actually
      issued.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              4.

            	
              ADMINISTRATION
                OF THE PLAN.

            

    

    

    The
      Administrator of the Plan will be the Board of Directors, except to the extent
      the Board of Directors delegates its authority to the Committee, in which case
      the Committee shall be the Administrator. Subject to the provisions of the
      Plan,
      the Administrator is authorized to:

    

    
      	 	
              a.

            	
              Interpret
                the provisions of the Plan and all Stock Rights and to make all rules
                and
                determinations which it deems necessary or advisable for the
                administration of the Plan;

            

    

    

    
      	 	
              b.

            	
              Determine
                which Employees, directors and consultants shall be granted Stock
                Rights;

            

    

    

    
      	 	
              c.

            	
              Determine
                the number of Shares for which a Stock Right or Stock Rights shall
                be
                granted, provided, however, that in no event shall Stock Rights with
                respect to more than 250,000 Shares be granted to any Participant
                in any
                fiscal year;

            

    

    

    
      	 	
              d.

            	
              Specify
                the terms and conditions upon which a Stock Right or Stock Rights
                may be
                granted; 

            

    

    

    
      	 	
              e.

            	
              Make
                changes to any outstanding Stock Right, including, without limitation,
                to
                reduce or increase the exercise price or purchase price, accelerate
                the
                vesting schedule or extend the expiration date, provided that no
                such
                change shall impair the rights of a Participant under any grant previously
                made without such Participant’s consent;

            

    

    

    
      	 	
              f.

            	
              Buy
                out for a payment in cash or Shares, a Stock Right previously granted
                and/or cancel any such Stock Right and grant in substitution therefor
                other Stock Rights, covering the same or a different number of Shares
                and
                having an exercise price or purchase price per share which may be
                lower or
                higher than the exercise price or purchase price of the cancelled
                Stock
                Right, based on such terms and conditions as the Administrator shall
                establish and the Participant shall accept;
                and

            

    

    

    
      	 	
              g.

            	
              Adopt
                any sub-plans applicable to residents of any specified jurisdiction
                as it
                deems necessary or appropriate in order to comply with or take advantage
                of any tax or other laws applicable to the Company or to Plan Participants
                or to otherwise facilitate the administration of the Plan, which
                sub-plans
                may include additional restrictions or conditions applicable to Stock
                Rights or Shares issuable pursuant to a Stock
                Right;

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    provided,
      however, that all such interpretations, rules, determinations, terms and
      conditions shall be made and prescribed in the context of not causing any
      adverse tax consequences under Section 409A of the Code and preserving the
      tax
      status under Section 422 of the Code of those Options which are designated
      as
      ISOs. Subject to the foregoing, the interpretation and construction by the
      Administrator of any provisions of the Plan or of any Stock Right granted under
      it shall be final, unless otherwise determined by the Board of Directors, if
      the
      Administrator is the Committee. In addition, if the Administrator is the
      Committee, the Board of Directors may take any action under the Plan that would
      otherwise be the responsibility of the Committee.

    

    To
      the
      extent permitted under applicable law, the Board of Directors or the Committee
      may allocate all or any portion of its responsibilities and powers to any one
      or
      more of its members and may delegate all or any portion of its responsibilities
      and powers to any other person selected by it. The Board of Directors or the
      Committee may revoke any such allocation or delegation at any time.

     

     

    
      	
              5.

            	
              ELIGIBILITY
                FOR PARTICIPATION.

            

    

    

    The
      Administrator will, in its sole discretion, name the Participants in the Plan,
      provided, however, that each Participant must be an Employee, director or
      consultant of the Company or of an Affiliate at the time a Stock Right is
      granted. Notwithstanding the foregoing, the Administrator may authorize the
      grant of a Stock Right to a person not then an Employee, director or consultant
      of the Company or of an Affiliate; provided, however, that the actual grant
      of
      such Stock Right shall be conditioned upon such person becoming eligible to
      become a Participant at or prior to the time of the execution of the Agreement
      evidencing such Stock Right. ISOs may be granted only to Employees.
      Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to
      any
      Employee, director or consultant of the Company or an Affiliate. The granting
      of
      any Stock Right to any individual shall neither entitle that individual to,
      nor
      disqualify him or her from, participation in any other grant of Stock
      Rights.

    

     

    
      
        	
                6.

              	
                TERMS
                  AND CONDITIONS OF OPTIONS.

              

      

    

    

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

    

    
      	 	
              a.

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

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	 	 	
              i.

            	
              Option
                Price:
                Each Option Agreement shall state the option price (per share) of
                the
                Shares covered by each Option, which option price shall be determined
                by
                the Administrator but shall not be less than the Fair Market Value
                per
                share of Common Stock. 

            

    

    

    
      	 	 	
              ii.

            	
              Number
                of Shares:
                Each Option Agreement shall state the number of Shares to which it
                pertains.

            

    

     

    
      	 	 	
              iii.

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

            

    

    

    
      	 	 	
              iv.

            	
              Option
                Conditions:
                Exercise of any Option may be conditioned upon the Participant’s execution
                of a Share purchase agreement in form satisfactory to the Administrator
                providing for certain protections for the Company and its other
                shareholders, including requirements
                that:

            

    

    

    
      	 	 	 	
              A.

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

            

    

    

    
      	 	 	 	
              B.

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

            

    

    

    
      	 	
              b.

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

            

    

    

    
      	 	 	
              i.

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

            

    

    

    
      	 	 	
              ii.

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

            

    

    

    
      	 	 	 	
              A.

            	
              10%
                or
                less
                of
                the total combined voting power of all classes of stock of the Company
                or
                an Affiliate, the Option price per share of the Shares covered by
                each ISO
                shall not be less than 100% of the Fair Market Value per share of
                the
                Shares on the date of the grant of the Option;
                or

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	 	 	 	
              B.

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

            

    

    

    
      	 	 	
              iii.

            	
              Term
                of Option:
                For Participants who own:

            

    

    

    
      	 	 	 	
              A.

            	
              10%
                or
                less
                of
                the total combined voting power of all classes of stock of the Company
                or
                an Affiliate, each ISO shall terminate not more than ten years from
                the
                date of the grant or at such earlier time as the Option Agreement
                may
                provide; or

            

    

    

    
      	 	 	 	
              B.

            	
              More
                than 10% of the total combined voting power of all classes of stock
                of the
                Company or an Affiliate, each ISO shall terminate not more than five
                years
                from the date of the grant or at such earlier time as the Option
                Agreement
                may provide.

            

    

    

    
      	 	 	
              iv.

            	
              Limitation
                on Yearly Exercise:
                The Option Agreements shall restrict the amount of ISOs which may
                become
                exercisable in any calendar year (under this or any other ISO plan
                of the
                Company or an Affiliate) so that the aggregate Fair Market Value
                (determined at the time each ISO is granted) of the stock with respect
                to
                which ISOs are exercisable for the first time by the Participant
                in any
                calendar year does not exceed
                $100,000.

            

    

     

     

    
      	
              7.

            	
              TERMS
                AND CONDITIONS OF STOCK GRANTS.

            

    

    

    Each
      offer of a Stock Grant to a Participant shall state the date prior to which
      the
      Stock Grant must be accepted by the Participant, and the principal terms of
      each
      Stock Grant shall be set forth in an Agreement, duly executed by the Company
      and, to the extent required by law or requested by the Company, by the
      Participant. The Agreement shall be in a form approved by the Administrator
      and
      shall contain terms and conditions which the Administrator determines to be
      appropriate and in the best interest of the Company, subject to the following
      minimum standards:

    

    
      	 	
              (a)

            	
              Each
                Agreement shall state the purchase price (per share), if any, of
                the
                Shares covered by each Stock Grant, which purchase price shall be
                determined by the Administrator but shall not be less than the minimum
                consideration required by the Delaware General Corporation Law on
                the date
                of the grant of the Stock Grant;

            

    

    

    
      	 	
              (b)

            	
              Each
                Agreement shall state the number of Shares to which the Stock Grant
                pertains; and

            

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	 	
              (c)

            	
              Each
                Agreement shall include the terms of any right of the Company to
                restrict
                or reacquire the Shares subject to the Stock Grant, including the
                time and
                events upon which such rights shall accrue and the purchase price
                therefor, if any.

            

    

     

     

    
      	
              8.

            	
              TERMS
                AND CONDITIONS OF OTHER STOCK-BASED AWARDS.
                

            

    

    

    The
      Administrator shall have the right to grant other Stock-Based Awards based
      upon
      the Common Stock having such terms and conditions as the Administrator may
      determine, including, without limitation, the grant of Shares based upon certain
      conditions, the grant of securities convertible into Shares and the grant of
      stock appreciation rights, phantom stock awards or stock units. The principal
      terms of each Stock-Based Award shall be set forth in an Agreement, duly
      executed by the Company and, to the extent required by law or requested by
      the
      Company, by the Participant. The Agreement shall be in a form approved by the
      Administrator and shall contain terms and conditions which the Administrator
      determines to be appropriate and in the best interest of the Company.

    

    The
      Company intends that the Plan and any Stock-Based Awards granted hereunder
      be
      exempt from the application of Section 409A of the Code or meet the requirements
      of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code
      (and any successor provisions of the Code) and the regulations and other
      guidance issued thereunder (the “Requirements”), to the extent applicable, and
      be operated in accordance with such Requirements so that any compensation
      deferred under any Stock-Based Award (and applicable investment earnings) shall
      not be included in income under Section 409A of the Code. Any ambiguities in
      the
      Plan shall be construed to effect the intent as described in this Paragraph
      8.

    

     

    
      
        	
                9.

              	
                EXERCISE
                  OF OPTIONS AND ISSUE OF SHARES.

              

      

    

    

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

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

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

    

    The
      Administrator shall have the right to accelerate the date of exercise of any
      installment of any Option; provided that the Administrator shall not accelerate
      the exercise date of any installment of any Option granted to an Employee as
      an
      ISO (and not previously converted into a Non-Qualified Option pursuant to
      Paragraph 27) without the prior approval of the Employee if such acceleration
      would violate the annual vesting limitation contained in Section 422(d) of
      the
      Code, as described in Paragraph 6(b)(iv).

    

    The
      Administrator may, in its discretion, amend any term or condition of an
      outstanding Option provided (i) such term or condition as amended is permitted
      by the Plan, (ii) any such amendment shall be made only with the consent of
      the
      Participant to whom the Option was granted, or in the event of the death of
      the
      Participant, the Participant’s Survivors, if the amendment is adverse to the
      Participant, and (iii) any such amendment of any Option shall be made only
      after
      the Administrator determines whether such amendment would constitute a
“modification” of any Option which is an ISO (as that term is defined in Section
      424(h) of the Code) or would cause any adverse tax consequences for the holder
      of any Option including, but not limited to, pursuant to Section 409A of the
      Code.

    

    

    
      	
              10.

            	
              ACCEPTANCE
                OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.

            

    

    

    A
      Stock
      Grant or Stock-Based Award (or any part or installment thereof) shall be
      accepted by executing the applicable Agreement and delivering it to the Company
      or its designee, together with provision for payment of the full purchase price,
      if any, in accordance with this Paragraph for the Shares as to which such Stock
      Grant or Stock-Based Award is being accepted, and upon compliance with any
      other
      conditions set forth in the applicable Agreement. Payment of the purchase price
      for the Shares as to which such Stock Grant or Stock-Based Award is being
      accepted shall be made (a) in United States dollars in cash or by check, or
      (b)
      at the discretion of the Administrator, through delivery of shares of Common
      Stock held for at least six months and having a Fair Market Value equal as
      of
      the date of acceptance of the Stock Grant or Stock Based-Award to the purchase
      price of the Stock Grant or Stock-Based Award, or (c) at the discretion of
      the
      Administrator, by delivery of the grantee’s personal recourse note bearing
      interest payable not less than annually at no less than 100% of the applicable
      Federal rate, as defined in Section 1274(d) of the Code, or (d) at the
      discretion of the Administrator, by any combination of (a), (b) and (c) above;
      or (e) at the discretion of the Administrator, payment of such other lawful
      consideration as the Administrator may determine.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    The
      Company shall then, if required by the applicable Agreement, reasonably promptly
      deliver the Shares as to which such Stock Grant or Stock-Based Award was
      accepted to the Participant (or to the Participant’s Survivors, as the case may
      be), subject to any escrow provision set forth in the applicable Agreement.
      In
      determining what constitutes “reasonably promptly,” it is expressly understood
      that the issuance and delivery of the Shares may be delayed by the Company
      in
      order to comply with any law or regulation (including, without limitation,
      state
      securities or “blue sky” laws) which requires the Company to take any action
      with respect to the Shares prior to their issuance.

    

    The
      Administrator may, in its discretion, amend any term or condition of an
      outstanding Stock Grant, Stock-Based Award or applicable Agreement provided
      (i)
      such term or condition as amended is permitted by the Plan, (ii) any such
      amendment shall be made only with the consent of the Participant to whom the
      Stock Grant or Stock-Based Award was made, if the amendment is adverse to the
      Participant, and (iii) any such amendment shall be made only after the
      Administrator determines whether such amendment would cause any adverse tax
      consequences to the Participant, including, but not limited to, pursuant to
      Section 409A of the Code.

    

    

    
      	
              11.

            	
              RIGHTS
                AS A SHAREHOLDER.

            

    

    

    No
      Participant to whom a Stock Right has been granted shall have rights as a
      shareholder with respect to any Shares covered by such Stock Right, except
      after
      due exercise of the Option or acceptance of the Stock Grant or as set forth
      in
      any Agreement, and tender of the full purchase price, if any, for the Shares
      being purchased pursuant to such exercise or acceptance and registration of
      the
      Shares in the Company’s share register in the name of the
      Participant.

    

    

    
      	
              12.

            	
              ASSIGNABILITY
                AND TRANSFERABILITY OF STOCK RIGHTS.

            

    

    

    By
      its
      terms, a Stock Right granted to a Participant shall not be transferable by
      the
      Participant other than (i) by will or by the laws of descent and distribution,
      or (ii) as approved by the Administrator in its discretion and set forth in
      the
      applicable Agreement. Notwithstanding the foregoing, an ISO transferred except
      in compliance with clause (i) above shall no longer qualify as an ISO. The
      designation of a beneficiary of a Stock Right by a Participant, with the prior
      approval of the Administrator and in such form as the Administrator shall
      prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except
      as provided above, a Stock Right shall only be exercisable or may only be
      accepted, during the Participant’s lifetime, by such Participant (or by his or
      her legal representative) and shall not be assigned, pledged or hypothecated
      in
      any way (whether by operation of law or otherwise) and shall not be subject
      to
      execution, attachment or similar process. Any attempted transfer, assignment,
      pledge, hypothecation or other disposition of any Stock Right or of any rights
      granted thereunder contrary to the provisions of this Plan, or the levy of
      any
      attachment or similar process upon a Stock Right, shall be null and
      void.

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
              13.

            	
              EFFECT
                ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH
                OR
                DISABILITY.

            

    

    

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

    

    
      	 	
              a.

            	
              A
                Participant who ceases to be an employee, director or consultant
                of the
                Company or of an Affiliate (for any reason other than termination
                for
                Cause, Disability, or death for which events there are special rules
                in
                Paragraphs 14, 15, and 16, respectively), may exercise any Option
                granted
                to him or her to the extent that the Option is exercisable on the
                date of
                such termination of service, but only within such term as the
                Administrator has designated in a Participant’s Option
                Agreement.

            

    

    

    
      	 	
              b.

            	
              Except
                as provided in Subparagraph (c) below, or Paragraph 15 or 16, in
                no event
                may an Option intended to be an ISO, be exercised later than three
                months
                after the Participant’s termination of
                employment.

            

    

    

    
      	 	
              c.

            	
              The
                provisions of this Paragraph, and not the provisions of Paragraph
                15 or
                16, shall apply to a Participant who subsequently becomes Disabled
                or dies
                after the termination of employment, director status or consultancy;
                provided, however, in the case of a Participant’s Disability or death
                within three months after the termination of employment, director
                status
                or consultancy, the Participant or the Participant’s Survivors may
                exercise the Option within one year after the date of the Participant’s
                termination of service, but in no event after the date of expiration
                of
                the term of the Option.

            

    

    

    
      	 	
              d.

            	
              Notwithstanding
                anything herein to the contrary, if subsequent to a Participant’s
                termination of employment, termination of director status or termination
                of consultancy, but prior to the exercise of an Option, the Board
                of
                Directors determines that, either prior or subsequent to the Participant’s
                termination, the Participant engaged in conduct which would constitute
                Cause, then such Participant shall forthwith cease to have any right
                to
                exercise any Option.

            

    

    

    
      	 	
              e.

            	
              A
                Participant to whom an Option has been granted under the Plan who
                is
                absent from the Company or an Affiliate because of temporary disability
                (any disability other than a Disability as defined in Paragraph 1
                hereof),
                or who is on leave of absence for any purpose, shall not, during
                the
                period of any such absence, be deemed, by virtue of such absence
                alone, to
                have terminated such Participant’s employment, director status or
                consultancy with the Company or with an Affiliate, except as the
                Administrator may otherwise expressly provide; provided however that
                for
                ISOs any leave of absence granted by the Administrator of greater
                than
                ninety days unless pursuant to a contract or statute that guarantees
                the
                right to reemployment shall cause such ISO to become a Non-Qualified
                Option. 

            

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	 	
              f.

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

            

    

    

    

    
      	
              14.

            	
              EFFECT
                ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.

            

    

    

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

    

    
      	 	
              a.

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

            

    

    

    
      	 	
              b.

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

            

    

    

    

    
      	
              15.

            	
              EFFECT
                ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

            

    

    

    Except
      as
      otherwise provided in a Participant’s Option Agreement:

    

    
      	 	
              a.
                

            	
              A
                Participant who ceases to be an employee, director or consultant
                of the
                Company or of an Affiliate by reason of Disability may exercise any
                Option
                granted to such Participant:

            

    

    

    (i) To
      the
      extent that the Option has become exercisable but has not been exercised on
      the
      date of Disability; and

    

    (ii) In
      the
      event rights to exercise the Option accrue periodically, to the extent of a
      pro
      rata portion through the date of Disability of any additional vesting rights
      that would have accrued on the next vesting date had the Participant not become
      Disabled. The proration shall be based upon the number of days accrued in the
      current vesting period prior to the date of Disability.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	 	
              b.

            	
              A
                Disabled Participant may exercise such rights only within the period
                ending one year after the date of the Participant’s Disability,
                notwithstanding that the Participant might have been able to exercise
                the
                Option as to some or all of the Shares on a later date if the Participant
                had not become Disabled and had continued to be an employee, director
                or
                consultant or, if earlier, within the originally prescribed term
                of the
                Option.

            

    

    

    
      	 	
              c.

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

            

    

    

    

    
      	
              16.

            	
              EFFECT
                ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR
                CONSULTANT.

            

    

    

    Except
      as
      otherwise provided in a Participant’s Option Agreement:

    

    
      	 	
              a.

            	
              In
                the event of the death of a Participant while the Participant is
                an
                employee, director or consultant of the Company or of an Affiliate,
                such
                Option may be exercised by the Participant’s
                Survivors:

            

    

    

    (i)
       To
      the
      extent that the Option has become exercisable but has not been exercised on
      the
      date of death; and

    

    (ii) In
      the
      event rights to exercise the Option accrue periodically, to the extent of a
      pro
      rata portion through the date of death of any additional vesting rights that
      would have accrued on the next vesting date had the Participant not died. The
      proration shall be based upon the number of days accrued in the current vesting
      period prior to the Participant’s date of death.

    

    
      	 	
              b.

            	
              If
                the Participant’s Survivors wish to exercise the Option, they must take
                all necessary steps to exercise the Option within one year after
                the date
                of death of such Participant, notwithstanding that the decedent might
                have
                been able to exercise the Option as to some or all of the Shares
                on a
                later date if he or she had not died and had continued to be an employee,
                director or consultant or, if earlier, within the originally prescribed
                term of the Option.

            

    

    

    

    
      	
              17.

            	
              EFFECT
                OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS.

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    In
      the
      event of a termination of service (whether as an employee, director or
      consultant) with the Company or an Affiliate for any reason before the
      Participant has accepted a Stock Grant, such offer shall terminate.

    

    For
      purposes of this Paragraph 17 and Paragraph 18 below, a Participant to whom
      a
      Stock Grant has been offered and accepted under the Plan who is absent from
      work
      with the Company or with an Affiliate because of temporary disability (any
      disability other than a Disability as defined in Paragraph 1 hereof), or who
      is
      on leave of absence for any purpose, shall not, during the period of any such
      absence, be deemed, by virtue of such absence alone, to have terminated such
      Participant’s employment, director status or consultancy with the Company or
      with an Affiliate, except as the Administrator may otherwise expressly
      provide.

    

    In
      addition, for purposes of this Paragraph 17 and Paragraph 18 below, any change
      of employment or other service within or among the Company and any Affiliates
      shall not be treated as a termination of employment, director status or
      consultancy so long as the Participant continues to be an employee, director
      or
      consultant of the Company or any Affiliate.

    

    

    
      	
              18.

            	
              EFFECT
                ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR
                DEATH OR
                DISABILITY.

            

    

    

    Except
      as
      otherwise provided in a Participant’s Stock Grant Agreement, in the event of a
      termination of service (whether as an employee, director or consultant), other
      than termination for Cause, Disability, or death for which events there are
      special rules in Paragraphs 19, 20, and 21, respectively, before all forfeiture
      provisions or Company rights of repurchase shall have lapsed, then the Company
      shall have the right to cancel or repurchase that number of Shares subject
      to a
      Stock Grant as to which the Company’s forfeiture or repurchase rights have not
      lapsed.

    

    

    
      	
              19.

            	
              EFFECT
                ON STOCK GRANTS OF TERMINATION OF SERVICE FOR CAUSE.

            

    

    

    Except
      as
      otherwise provided in a Participant’s Stock Grant Agreement, the following rules
      apply if the Participant’s service (whether as an employee, director or
      consultant) with the Company or an Affiliate is terminated for
      Cause:

    

    
      	 	
              a.

            	
              All
                Shares subject to any Stock Grant that remain subject to forfeiture
                provisions or as to which the Company shall have a repurchase right
                shall
                be immediately forfeited to the Company as of the time the Participant
                is
                notified his or her service is terminated for
                Cause.

            

    

    

    
      	 	
              b.

            	
              Cause
                is not limited to events which have occurred prior to a Participant’s
                termination of service, nor is it necessary that the Administrator’s
                finding of Cause occur prior to termination. If the Administrator
                determines, subsequent to a Participant’s termination of service, that
                either prior or subsequent to the Participant’s termination the
                Participant engaged in conduct which would constitute Cause, then
                the
                Company’s right to repurchase all of such Participant’s Shares shall
                apply.

            

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
              20.

            	
              EFFECT
                ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.

            

    

    

    Except
      as
      otherwise provided in a Participant’s Stock Grant Agreement, the following rules
      apply if a Participant ceases to be an employee, director or consultant of
      the
      Company or of an Affiliate by reason of Disability: to the extent the forfeiture
      provisions or the Company’s rights of repurchase have not lapsed on the date of
      Disability, they shall be exercisable; provided, however, that in the event
      such
      forfeiture provisions or rights of repurchase lapse periodically, such
      provisions or rights shall lapse to the extent of a pro rata portion of the
      Shares subject to such Stock Grant through the date of Disability as would
      have
      lapsed had the Participant not become Disabled. The proration shall be based
      upon the number of days accrued prior to the date of Disability.

    

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

    

    

    
      	
              21.

            	
              EFFECT
                ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR
                CONSULTANT.

            

    

    

    Except
      as
      otherwise provided in a Participant’s Stock Grant Agreement, the following rules
      apply in the event of the death of a Participant while the Participant is an
      employee, director or consultant of the Company or of an Affiliate: to the
      extent the forfeiture provisions or the Company’s rights of repurchase have not
      lapsed on the date of death, they shall be exercisable; provided, however,
      that
      in the event such forfeiture provisions or rights of repurchase lapse
      periodically, such provisions or rights shall lapse to the extent of a pro
      rata
      portion of the Shares subject to such Stock Grant through the date of death
      as
      would have lapsed had the Participant not died. The proration shall be based
      upon the number of days accrued prior to the Participant’s death.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      
        	
                22.

              	
                PURCHASE
                  FOR INVESTMENT.

              

      

    

    

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

    

    
      	 	
              a.

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

            

    

    

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

            

    

    

    
      	 	
              b.

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

            

    

    

    

    
      	
              23.

            	
              DISSOLUTION
                OR LIQUIDATION OF THE COMPANY.

            

    

    

    Upon
      the
      dissolution or liquidation of the Company, all Options granted under this Plan
      which as of such date shall not have been exercised and all Stock Grants and
      Stock-Based Awards which have not been accepted will terminate and become null
      and void; provided, however, that if the rights of a Participant or a
      Participant’s Survivors have not otherwise terminated and expired, the
      Participant or the Participant’s Survivors will have the right immediately prior
      to such dissolution or liquidation to exercise or accept any Stock Right to
      the
      extent that the Stock Right is exercisable or subject to acceptance as of the
      date immediately prior to such dissolution or liquidation. Upon the dissolution
      or liquidation of the Company, any outstanding Stock-Based Awards shall
      immediately terminate unless otherwise determined by the Administrator or
      specifically provided in the applicable Agreement.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    
      	
              24.

            	
              ADJUSTMENTS.

            

    

    

    Upon
      the
      occurrence of any of the following events, a Participant’s rights with respect
      to any Stock Right granted to him or her hereunder shall be adjusted as
      hereinafter provided, unless otherwise specifically provided in a Participant’s
      Agreement:

    

    a. Stock
      Dividends and Stock Splits.
      If
      (i) the shares of Common Stock shall be subdivided or combined into a
      greater or smaller number of shares or if the Company shall issue any shares
      of
      Common Stock as a stock dividend on its outstanding Common Stock, or
      (ii) additional shares or new or different shares or other securities of
      the Company or other non-cash assets are distributed with respect to such shares
      of Common Stock, the number of shares of Common Stock deliverable upon the
      exercise of an Option or acceptance of a Stock Grant shall be appropriately
      increased or decreased proportionately, and appropriate adjustments shall be
      made including, in the purchase price per share, to reflect such events. The
      number of Shares subject to the limitations in Paragraph 3(a) and
      4(c) shall
      also be proportionately adjusted upon the occurrence of such
      events.

    

    b. Corporate
      Transactions.
      If the
      Company is to be consolidated with or acquired by another entity in a merger,
      consolidation, or sale of all or substantially all of the Company’s assets other
      than a transaction to merely change the state of incorporation (a “Corporate
      Transaction”), the Administrator or the board of directors of any entity
      assuming the obligations of the Company hereunder (the “Successor Board”),
      shall, as to outstanding Options, either (i) make appropriate provision for
      the
      continuation of such Options by substituting on an equitable basis for the
      Shares then subject to such Options either the consideration payable with
      respect to the outstanding shares of Common Stock in connection with the
      Corporate Transaction or securities of any successor or acquiring entity; or
      (ii) upon written notice to the Participants, provide that such Options must
      be
      exercised (either (A) to the extent then exercisable or, (B) at the discretion
      of the Administrator, any such Options being made fully exercisable for purposes
      of this Subparagraph), within a specified number of days of the date of such
      notice, at the end of which period such Options shall terminate; or (iii)
      terminate such Options in exchange for a cash payment equal to the excess of
      the
      Fair Market Value of the Shares subject to such Options (either (A) to the
      extent then exercisable or, (B) at the discretion of the Administrator, any
      such
      Options being made fully exercisable for purposes of this Subparagraph) over
      the
      exercise price thereof.

    

    With
      respect to outstanding Stock Grants, the Administrator or the Successor Board,
      shall either (i) make appropriate provisions for the continuation of such Stock
      Grants on the same terms and conditions by substituting on an equitable basis
      for the Shares then subject to such Stock Grants either the consideration
      payable with respect to the outstanding Shares of Common Stock in connection
      with the Corporate Transaction or securities of any successor or acquiring
      entity; or (ii) terminate such Stock Grants in exchange for a cash payment
      equal
      to the excess of the Fair Market Value of the Shares subject to such Stock
      Grants over the purchase price thereof, if any. In addition, in the event of
      a
      Corporate Transaction, the Administrator may waive any or all Company forfeiture
      or repurchase rights with respect to outstanding Stock Grants.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    c. Recapitalization
      or Reorganization.
      In the
      event of a recapitalization or reorganization of the Company other than a
      Corporate Transaction pursuant to which securities of the Company or of another
      corporation are issued with respect to the outstanding shares of Common Stock,
      a
      Participant upon exercising an Option or accepting a Stock Grant after the
      recapitalization or reorganization shall be entitled to receive for the purchase
      price paid upon such exercise or acceptance of the number of replacement
      securities which would have been received if such Option had been exercised
      or
      Stock Grant accepted prior to such recapitalization or
      reorganization.

    

    d. Adjustments
      to Stock-Based Awards.
      Upon
      the happening of any of the events described in Subparagraphs a, b or c above,
      any outstanding Stock-Based Award shall be appropriately adjusted to reflect
      the
      events described in such Subparagraphs. The Administrator or the Successor
      Board
      shall determine the specific adjustments to be made under this Paragraph 24,
      including, but not limited to the effect if any, of a Change of Control and,
      subject to Paragraph 4, its determination shall be conclusive.

    

    e. Modification
      of Options.
      Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph
      a,
      b or c above with respect to Options shall be made only after the Administrator
      determines whether such adjustments would constitute a “modification” of any ISO
      (as that term is defined in Section 424(h) of the Code) or would cause any
      adverse tax consequences for the holders of such Options, including, but not
      limited to, pursuant to Section 409A of the Code. If the Administrator
      determines that such adjustments made with respect to Options would constitute
      a
      modification or other adverse tax consequence, it may refrain from making such
      adjustments, unless the holder of an Option specifically agrees in writing
      that
      such adjustment be made and such writing indicates that the holder has full
      knowledge of the consequences of such “modification” on his or her income tax
      treatment with respect to the Option. This paragraph shall not apply to the
      acceleration of the vesting of any ISO that would cause any portion of the
      ISO
      to violate the annual vesting limitation contained in Section 422(d) of the
      Code, as described in Paragraph 6b(iv).

    

    

    
      	
              25.

            	
              ISSUANCES
                OF SECURITIES.

            

    

    

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

    

    

    
      	
              26.

            	
              FRACTIONAL
                SHARES.

            

    

    

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

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      	
              27.

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

            

    

    

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

    

    

    
      	
              28.

            	
              WITHHOLDING.

            

    

    

    In
      the
      event that any federal, state, or local income taxes, employment taxes, Federal
      Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts are
      required by applicable law or governmental regulation to be withheld from the
      Participant’s salary, wages or other remuneration in connection with the
      exercise or acceptance of a Stock Right or in connection with a Disqualifying
      Disposition (as defined in Paragraph 29) or upon the lapsing of any forfeiture
      provision or right of repurchase or for any other reason required by law, the
      Company may withhold from the Participant’s compensation, if any, or may require
      that the Participant advance in cash to the Company, or to any Affiliate of
      the
      Company which employs or employed the Participant, the statutory minimum amount
      of such withholdings unless a different withholding arrangement, including
      the
      use of shares of the Company’s Common Stock or a promissory note, is authorized
      by the Administrator (and permitted by law). For purposes hereof, the fair
      market value of the shares withheld for purposes of payroll withholding shall
      be
      determined in the manner set forth under the definition of Fair Market Value
      provided in Paragraph 1 above, as of the most recent practicable date prior
      to
      the date of exercise. If the fair market value of the shares withheld is less
      than the amount of payroll withholdings required, the Participant may be
      required to advance the difference in cash to the Company or the Affiliate
      employer. The Administrator in its discretion may condition the exercise of
      an
      Option for less than the then Fair Market Value on the Participant’s payment of
      such additional withholding. 

    

    

    
      	
              29.

            	
              NOTICE
                TO COMPANY OF DISQUALIFYING DISPOSITION.

            

    

    

    Each
      Employee who receives an ISO must agree to notify the Company in writing
      immediately after the Employee makes a Disqualifying Disposition of any shares
      acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is
      defined in Section 424(c) of the Code and includes any disposition (including
      any sale or gift) of such shares before the later of (a) two years after the
      date the Employee was granted the ISO, or (b) one year after the date the
      Employee acquired Shares by exercising the ISO, except as otherwise provided
      in
      Section 424(c) of the Code. If the Employee has died before such stock is sold,
      these holding period requirements do not apply and no Disqualifying Disposition
      can occur thereafter.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      	
              30.

            	
              TERMINATION
                OF THE PLAN.

            

    

    

    The
      Plan
      will terminate on August 17, 2017, the date which is ten years from the
earlier
      of the
      date of its adoption by the Board of Directors and the date of its approval
      by
      the shareholders of the Company. The Plan may be terminated at an earlier date
      by vote of the shareholders or the Board of Directors of the Company; provided,
      however, that any such earlier termination shall not affect any Agreements
      executed prior to the effective date of such termination.

    

    

    
      	
              31.

            	
              AMENDMENT
                OF THE PLAN AND AGREEMENTS.

            

    

    

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

    

    

    
      	
              32.

            	
              EMPLOYMENT
                OR OTHER RELATIONSHIP.

            

    

    

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

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    
      	
              33.

            	
              GOVERNING
                LAW.

            

    

    

    This
      Plan
      shall be construed and enforced in accordance with the law of
      Delaware.

    
      
         

      

      
        21

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