Document:

EXHIBIT 4.1

                        DOBI MEDICAL INTERNATIONAL, INC.

No._____                                                             ____ Shares

                        WARRANT TO PURCHASE COMMON STOCK

                     VOID AFTER 5:30 P.M., EASTERN STANDARD
                          TIME, ON THE EXPIRATION DATE

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.

          FOR VALUE RECEIVED, DOBI MEDICAL INTERNATIONAL, INC., a Nevada
corporation initially operating under the corporate name of Lions Gate
Investment Limited (the "Company"), hereby agrees to sell upon the terms and on
the conditions hereinafter set forth, but no later than 5:30 p.m., Eastern
Standard Time, on the Expiration Date (as hereinafter defined) to
______________________, or registered assigns (the "Holder"), under the terms as
hereinafter set forth, _____________________ (__________) fully paid and
non-assessable shares of the Company's Common Stock, par value $.0001 per share
(the "Warrant Stock"), at a purchase price per share of One Dollar Fifty-Four
Cents ($1.54) (the "Warrant Price"), pursuant to this warrant (this "Warrant").
The number of shares of Warrant Stock to be so issued and the Warrant Price are
subject to adjustment in certain events as hereinafter set forth. The term
"Common Stock" shall mean, when used herein, unless the context otherwise
requires, the stock and other securities and property at the time receivable
upon the exercise of this Warrant.

          This Warrant is one of a series of the Company's Warrants to purchase
Common Stock (collectively, the "Warrants"), issued pursuant to that certain
Confidential Private Placement Memorandum, dated October 22, 2003, as amended by
the First Supplement thereto, dated November 20, 2003 (the "Memorandum").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings attributed thereto in Section 10.

          1. Exercise of Warrant.

             (a) The Holder may exercise this Warrant according to its terms by
surrendering this Warrant to the Company at the address set forth in Section 11,
the subscription form attached hereto having then been duly executed by the
Holder, accompanied by cash, certified check or bank draft in payment of the
purchase price, in lawful money of the United States of America, for the number
of shares of the Warrant Stock specified in the subscription form, or as
otherwise provided in this Warrant prior to 5:30 p.m., Eastern Standard Time, on
__________ __, 2006 (the "Expiration Date").

             (b) This Warrant may be exercised in whole or in part so long as
any exercise in part hereof would not involve the issuance of fractional shares
of Warrant Stock. If

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exercised in part, the Company shall deliver to the Holder a new Warrant,
identical in form, in the name of the Holder, evidencing the right to purchase
the number of shares of Warrant Stock as to which this Warrant has not been
exercised, which new Warrant shall be signed by the Chairman, Chief Executive
Officer or President and the Secretary or Assistant Secretary of the Company.
The term Warrant as used herein shall include any subsequent Warrant issued as
provided herein.

          (c) No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. The Company shall pay cash in lieu
of fractions with respect to the Warrants based upon the fair market value of
such fractional shares of Common Stock (which shall be the closing price of such
shares on the exchange or market on which the Common Stock is then traded) at
the time of exercise of this Warrant.

          (d) In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the Warrant Stock so purchased,
registered in the name of the Holder, shall be delivered to the Holder within a
reasonable time after such rights shall have been so exercised. The person or
entity in whose name any certificate for the Warrant Stock is issued upon
exercise of the rights represented by this Warrant shall for all purposes be
deemed to have become the holder of record of such shares immediately prior to
the close of business on the date on which the Warrant was surrendered and
payment of the Warrant Price and any applicable taxes was made, irrespective of
the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the opening of business on the next succeeding date on which the stock transfer
books are open. Except as provided in Section 4 hereof, the Company shall pay
any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on exercise of this
Warrant.

       2.  Disposition of Warrant Stock and Warrant.

          (a) The Holder hereby acknowledges that this Warrant and any Warrant
Stock purchased pursuant hereto are not being registered (i) under the Act on
the ground that the issuance of this Warrant is exempt from registration under
Section 4(2) of the Act as not involving any public offering or (ii) under any
applicable state securities law because the issuance of this Warrant does not
involve any public offering; and that the Company's reliance on the Section 4(2)
exemption of the Act and under applicable state securities laws is predicated in
part on the representations hereby made to the Company by the Holder that it is
acquiring this Warrant and will acquire the Warrant Stock for investment for its
own account, with no present intention of dividing its participation with others
or reselling or otherwise distributing the same, subject, nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control.

       The Holder hereby agrees that it will not sell or transfer all or any
part of this Warrant and/or Warrant Stock unless and until it shall first have
given notice to the Company describing such sale or transfer and furnished to
the Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or

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transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.

          (b) If, at the time of issuance of the shares issuable upon exercise
of this Warrant, no registration statement is in effect with respect to such
shares under applicable provisions of the Act, the Company may at its election
require that the Holder provide the Company with written reconfirmation of the
Holder's investment intent and that any stock certificate delivered to the
Holder of a surrendered Warrant shall bear legends reading substantially as
follows:

              "TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT
              TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT PURSUANT TO WHICH
              THESE SHARES WERE PURCHASED FROM THE COMPANY. COPIES OF THOSE
              RESTRICTIONS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY,
              AND NO TRANSFER OF SUCH SHARES OR OF THIS CERTIFICATE, OR OF ANY
              SHARES OR OTHER SECURITIES (OR CERTIFICATES THEREFOR) ISSUED IN
              EXCHANGE FOR OR IN RESPECT OF SUCH SHARES, SHALL BE EFFECTIVE
              UNLESS AND UNTIL THE TERMS AND CONDITIONS THEREIN SET FORTH SHALL
              HAVE BEEN COMPLIED WITH."

              "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
              REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD,
              TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
              EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
              OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS
              CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."

In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate "stop transfer"
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.

          3. Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance upon the exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the exercise
price, be validly issued, fully paid and non-assessable, free from all taxes,
liens, charges and

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preemptive rights with respect to the issuance thereof, other than taxes,
if any, in respect of any transfer occurring contemporaneously with such
issuance and other than transfer restrictions imposed by federal and state
securities laws.

          4. Exchange, Transfer or Assignment of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Common Stock purchasable hereunder. Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.

          5. Capital Adjustments. This Warrant is subject to the following
further provisions:

             (a) Recapitalization, Reclassification and Succession. If any
recapitalization of the Company or reclassification of its Common Stock or any
merger or consolidation of the Company into or with a corporation or other
business entity, or the sale or transfer of all or substantially all of the
Company's assets or of any successor corporation's assets to any other
corporation or business entity (any such corporation or other business entity
being included within the meaning of the term "successor corporation") shall be
effected, at any time while this Warrant remains outstanding and unexpired,
then, as a condition of such recapitalization, reclassification, merger,
consolidation, sale or transfer, lawful and adequate provision shall be made
whereby the Holder of this Warrant thereafter shall have the right to receive
upon the exercise hereof as provided in Section 1 and in lieu of the shares of
Common Stock immediately theretofore issuable upon the exercise of this Warrant,
such shares of capital stock, securities or other property as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of shares of Common Stock immediately
theretofore issuable upon the exercise of this Warrant had such
recapitalization, reclassification, merger, consolidation, sale or transfer not
taken place, and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.

             (b) Subdivision or Combination of Shares. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the number of shares of Warrant Stock purchasable upon
exercise of this Warrant and the Warrant Price shall be proportionately
adjusted.

             (c) Stock Dividends and Distributions. If the Company at any time
while this Warrant is outstanding and unexpired shall issue or pay the holders
of its Common Stock, or take a record of the holders of its Common Stock for the
purpose of entitling them to

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receive, a dividend payable in, or other distribution of, Common Stock, then
(i) the Warrant Price shall be adjusted in accordance with Section 5(e) and (ii)
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall be adjusted to the number of shares of Common Stock that Holder would have
owned immediately following such action had this Warrant been exercised
immediately prior thereto.

             (d) Stock and Rights Offering to Shareholders. If at any time after
the date of issuance of this Warrant, the Company shall issue or sell to all
holders of its Common Stock, or fix a record date for the purposes of entitling
all holders of its Common Stock to receive, (i) Common Stock or (ii) rights,
options or warrants entitling the holders thereof to subscribe for or purchase
Common Stock (or securities convertible or exchangeable into or exercisable for
Common Stock), in any such case, at a price per share (or having a conversion,
exchange or exercise price per share) that is less than the closing price per
share of the Company's Common Stock on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or traded on any such exchange, on the National Market or SmallCap Market
of the National Association of Securities Dealers Automated Quotations System
("Nasdaq"), or if not listed or traded on any such exchange or system, the
average of the bid and asked price per share on Nasdaq or, if such quotations
are not available, the fair market value per share of the Company's Common Stock
as reasonably determined by the Board of Directors of the Company (the "Closing
Price") on the date of such issuance or sale or on such record date then,
immediately after the date of such issuance or sale or on such record date, (x)
the Warrant Price shall be adjusted in accordance with Section 5(e), and (y) the
number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall be adjusted to that number determined by multiplying the number of shares
of Warrant Stock purchasable upon exercise of this Warrant immediately before
the date of such issuance or sale or such record date by a fraction, the
denominator of which will be the number of shares of Common Stock outstanding on
such date plus the number of shares of Common Stock that the aggregate offering
price of the total number of shares so offered for subscription or purchase (or
the aggregate initial conversion price, exchange price or exercise price of the
convertible securities or exchangeable securities or rights, options or
warrants, as the case may be, so offered) would purchase at such Closing Price,
and the numerator of which will be the number of shares of Common Stock
outstanding on such date plus the number of additional shares of Common Stock
offered for subscription or purchase (or into which the convertible or
exchangeable securities or rights, options or warrants so offered are initially
convertible or exchangeable or exercisable, as the case may be).

                 If the Company shall at any time after the date of issuance of
this Warrant distribute to all holders of its Common Stock any shares of capital
stock of the Company (other than Common Stock) or evidences of its indebtedness
or assets (excluding cash dividends or distributions paid from retained earnings
or current year's or prior year's earnings of the Company) or rights or warrants
to subscribe for or purchase any of its securities (excluding those referred to
in the immediately preceding paragraph) (any of the foregoing being hereinafter
in this paragraph called the "Securities"), then in each such case, the Company
shall reserve shares or other units of such securities for distribution to the
Holder upon exercise of this Warrant so that, in addition to the shares of the
Common Stock to which such Holder is entitled, such Holder will receive upon
such exercise the amount and kind of such Securities which such

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Holder would have received if the Holder had, immediately prior to the record
date for the distribution of the Securities, exercised this Warrant.

             (e) Warrant Price Adjustment. Whenever the number of shares of
Warrant Stock purchasable upon exercise of this Warrant is adjusted, as herein
provided, the Warrant Price payable upon the exercise of this Warrant shall be
adjusted to that price determined by multiplying the Warrant Price immediately
prior to such adjustment by a fraction (i) the numerator of which shall be the
number of shares of Warrant Stock purchasable upon exercise of this Warrant
immediately prior to such adjustment, and (ii) the denominator of which shall be
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
immediately thereafter.

             (f) Certain Shares Excluded. The number of shares of Common Stock
outstanding at any given time for purposes of the adjustments set forth in this
Section 5 shall exclude any shares then directly or indirectly held in the
treasury of the Company.

             (g) Deferral and Cumulation of De Minimis Adjustments. The Company
shall not be required to make any adjustment pursuant to this Section 5 if the
amount of such adjustment would be less than one percent (1%) of the Warrant
Price in effect immediately before the event that would otherwise have given
rise to such adjustment. In such case, however, any adjustment that would
otherwise have been required to be made shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
or adjustments so carried forward, shall amount to not less than one percent
(1%) of the Warrant Price in effect immediately before the event giving rise to
such next subsequent adjustment.

             (h) Duration of Adjustment. Following each computation or
readjustment as provided in this Section 5, the new adjusted Warrant Price and
number of shares of Warrant Stock purchasable upon exercise of this Warrant
shall remain in effect until a further computation or readjustment thereof is
required.

          6. Notice to Holders.

             (a) Notice of Record Date. In case:

                  (i) the Company shall take a record of the holders of its
          Common Stock (or other stock or securities at the time receivable upon
          the exercise of this Warrant) for the purpose of entitling them to
          receive any dividend (other than a cash dividend payable out of earned
          surplus of the Company) or other distribution, or any right to
          subscribe for or purchase any shares of stock of any class or any
          other securities, or to receive any other right;

                  (ii) of any capital reorganization of the Company, any
          reclassification of the capital stock of the Company, any
          consolidation with or merger of the Company into another corporation,
          or any conveyance of all or substantially all of the assets of the
          Company to another corporation; or

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                  (iii) of any voluntary dissolution, liquidation or winding-up
          of the Company;

then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution or winding-up. Such notice shall
be mailed at least thirty (30) days prior to the record date therein specified,
or if no record date shall have been specified therein, at least thirty (30)
days prior to such specified date.

              (b) Certificate of Adjustment. Whenever any adjustment shall be
made pursuant to Section 5 hereof, the Company shall promptly make a certificate
signed by its Chairman, Chief Executive Officer, President or Vice President and
by its Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, setting
forth in reasonable detail the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Warrant
Price and number of shares of Warrant Stock purchasable upon exercise of this
Warrant after giving effect to such adjustment, and shall promptly cause copies
of such certificates to be mailed (by first class mail, postage prepaid) to the
Holder of this Warrant.

          7. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company
of evidence satisfactory to it, in the exercise of its reasonable discretion, of
the ownership and the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver in lieu thereof,
without expense to the Holder, a new Warrant of like tenor dated the date
hereof.

          8. Warrant Holder Not a Stockholder. The Holder of this Warrant, as
such, shall not be entitled by reason of this Warrant to any rights whatsoever
as a stockholder of the Company.

          9. Registration Rights. This Warrant and the shares of Common Stock
issuable upon exercise of this Warrant will be accorded the registration rights
under the Act set forth in that certain Subscription Agreement between the
Company and the Holders, a form of which agreement is being furnished
concurrently herewith.

          10. Definitions. As used herein, unless the context otherwise
requires, the following terms have the respective meanings:

              (a) "Affiliate": with respect to any Person, the following: (i)
any other Person that at such time directly or indirectly through one or more
intermediaries controls,

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or is controlled by or is under common control with such first Person or (ii)
any Person beneficially owning or holding, directly or indirectly, 10% or more
of any class of voting or equity interests of the Company or any Subsidiary or
any corporation of which the Company and its Subsidiaries beneficially own or
hold, in the aggregate, directly or indirectly, 10% of more of any class of
voting or equity interests. As used in such definition, "controls," "controlled
by" and "under common control," as used with respect to an Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

              (b) "Person": any natural person, corporation, division of a
corporation, partnership, limited liability company, trust, joint venture,
association, company, estate, unincorporated organization or government or any
agency or political subdivision thereof.

              (c) "Subsidiaries": with respect to any Person, any corporation,
association or other business entity (whether now existing or hereafter
organized) of which at least a majority of the securities or other ownership
interests having ordinary voting power for the election of directors is, at the
time as of which any determination is being made, owned or controlled by such
Person or one or more subsidiaries of such Person.

          11. Notices. Any notice required or contemplated by this Warrant shall
be deemed to have been duly given if transmitted by registered or certified
mail, return receipt requested, to the Company at 1200 MacArthur Boulevard,
Mahwah, New Jersey 07430, Attention: President, or to the Holder at the name and
address set forth in the Warrant Register maintained by the Company.

          12. Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES.

          IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed on its behalf, in its corporate name and by its duly authorized officers,
as of this 9th day of December 2003.

                             DOBI MEDICAL INTERNATIONAL, INC.
                             (Operating initially under the name Lions Gate
                             Investment Limited)

                             By:___________________________
                                  Name:
                                  Title:

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                                SUBSCRIPTION FORM

          The undersigned, the Holder of the attached Warrant, hereby
irrevocably elects to exercise purchase rights represented by such Warrant for,
and to purchase thereunder, the following number of shares of Common Stock of
DOBI MEDICAL INTERNATIONAL, INC.:

            Number of Shares                   Purchase Price Per Share

          The undersigned herewith makes payment of $_________ therefor, and
requests that certificates for such shares (and any warrants or other property
issuable upon such exercise) be issued in the name of and delivered to
__________________________ whose address is _______________________________
(social security or taxpayer identification number ___________) and, if such
shares shall not include all of the shares issuable under such warrant, that a
new warrant of like tenor and date for the balance of the shares issuable
thereunder be delivered to the undersigned.

                                         HOLDER:

                                         _____________________________
                                         Signature

                                         _____________________________
                                         Signature, if jointly held

                                         _____________________________
                                         Date

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                                 ASSIGNMENT FORM

FOR VALUE RECEIVED, _______________________________________________________
hereby sells, assigns and transfers unto

Name ________________________________________________________________________
         (Please typewrite or print in block letters)

Social Security or Taxpayer Identification Number

the right to purchase Common Stock of DOBI MEDICAL INTERNATINONAL, INC., a
Nevada corporation, represented by this Warrant to the extent of shares as to
which such right is exercisable and does hereby irrevocably constitute and
appoint _________________, Attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.

DATED:__________________

                                         _______________________________
                                         Signature

                                         _______________________________
                                         Signature, if jointly held

Witness:

____________________________

                                       10EXHIBIT 10.1

                           DOBI MEDICAL SYSTEMS, INC.

                            2000 STOCK INCENTIVE PLAN
                     (AS AMENDED THROUGH DECEMBER 18, 2002)

     1. PURPOSE. The purpose of the DOBI Medical Systems, Inc., 2000 Stock
Incentive Plan as amended through December 18, 2002 (the "Plan") is to provide a
means through which the Company and its Subsidiaries and Affiliates may attract
able persons to enter and remain in the employ of the Company and its
Subsidiaries and Affiliates and to provide a means whereby eligible persons can
acquire and maintain ownership of Stock, or be paid incentive compensation
measured by reference to the value of the Stock, thereby strengthening their
commitment to the welfare of the Company and its Subsidiaries and Affiliates and
promoting an identity of interest between the shareholders of the Company and
these eligible persons.

     So that the appropriate incentive can be provided, the Plan provides for
granting Nonqualified Stock Options, Restricted Stock Awards and Stock Bonuses,
or any combination of the foregoing. This Plan also provides for granting
Incentive Stock Options to the extent that Section 422 of the Code or such other
applicable Section becomes available to give favorable or preferred tax
treatment to the grant of Stock. Capitalized terms not defined in the text are
defined in Section 24.

     2. STOCK SUBJECT TO THE PLAN. Subject to Section 18, the total number of
Stock reserved and available for grant and issuance pursuant to this Plan will
be the lesser of (i) 15% of Common Stock outstanding (determined on a fully
diluted basis exclusive of Common Stock issued or issuable pursuant to options
and other awards granted under the Plan) or (ii) 7,000,000 Common Stock. At all
times the Company shall reserve and keep available a sufficient number of Stock
as shall be required to satisfy the requirements of all outstanding Options
granted under this Plan and all other outstanding but unvested Awards granted
under this Plan. Stock that have been (a) reserved for issuance under Options
which have expired or otherwise terminated without issuance of the underlying
Stock, (b) reserved for issuance or issued under an Award granted hereunder but
have been forfeited or repurchased by the Company at the original issue price,
or (c) reserved for issuance or issued under an Award that otherwise terminates
without Stock being issued, shall again be available for issuance.

     3. ELIGIBILITY. Awards may be granted to employees, officers, managers,
consultants, independent contractors and advisors of the Company or any Parent,
Affiliate or Subsidiary of the Company; provided such consultants, contractors
and advisors render bona fide services not in connection with the offer and sale
of securities in a capital-raising transaction.

     4. ADMINISTRATION.

         4.1. Committee Authority. This Plan will be administered by the
Committee or by the Board. Any power, authority or discretion granted to the
Committee may also be taken by the Board. Subject to the general purposes, terms
and conditions of this Plan, and to the direction of the Board, the Committee
will have full power to implement and carry out this Plan. Without limitation,
the Committee will have the authority to:

          (a)  select persons to receive Awards;

<PAGE>

          (b)  determine the nature, extent, form and terms of Awards and the
               number of Stock or other consideration subject to Awards;

          (c)  subject to the provisions of Section 4.3, determine the vesting,
               exercisability and payment of Awards;

          (d)  correct any defect, supply any omission or reconcile any
               inconsistency in this Plan, any Award or any Award Agreement;

          (e)  determine whether Awards will be granted singly, in combination
               with, in tandem with, in replacement of, or as alternatives to,
               other Awards under this Plan or any other incentive or
               compensation plan of the Company or any Parent or Subsidiary of
               the Company;

          (f)  prescribe, amend and rescind rules and regulations relating to
               this Plan or any Award;

          (g)  construe and interpret this Plan, any Award Agreement and any
               other agreement or document executed pursuant to this Plan;

          (h)  grant waivers of Plan or Award conditions;

          (i)  determine whether an Award has been earned;

          (j)  accelerate the vesting of any Award; and

          (k)  make all other determinations necessary or advisable for the
               administration of this Plan.

         The Committee shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations and to make
all such determinations relating to the Plan as it may deem necessary or
advisable for the administration of the Plan. The Committee's interpretation of
the Plan or any documents evidencing Awards granted pursuant thereto and all
decisions and determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise determined by the
Board.

         4.2. Committee Discretion. Any determination made by the Committee with
respect to any Award will be made in its sole discretion at the time of grant of
the Award or, unless in contravention of any express term of this Plan or Award,
at any later time, and such determination will be final and binding on the
Company and on all persons having an interest in any Award under this Plan.

         4.3. Vesting of Options. Unless an alternative vesting period is
provided by the Committee with respect to any particular Award of Options under
this Plan, 25% of each Award of Options shall vest upon the first anniversary of
each Award, and a like amount shall vest on each subsequent anniversary.

     5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be intended to be "incentive Stock options"
which may give favorable or preferred tax treatment to the Grantee to the extent
that

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Section 422 of the Code or such other applicable section becomes available
("ISO's") or Nonqualified Stock Options ("NQSO's"), the number of shares subject
to the Option, the Exercise Price of the Option, the period during which the
Option may be exercised, and all other terms and conditions of the Option,
subject to the following:

         5.1. Form of Option Grant. Each Option granted under this Plan will be
evidenced by an Award Agreement ("Stock Option Agreement"), which will expressly
identify the Option as an ISO or an NQSO, and will be in such form and contain
such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.

         5.2. Exercise Period. Options may be exercisable to the extent vested
within the times or upon the events determined by the Committee as set forth in
the Stock Option Agreement governing such Option; provided, however, that no
Option will be exercisable after the expiration of ten (10) years from the date
the Option is granted; and provided further that no ISO granted to a person who
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of Stockholders of the Company or of any
Parent or Subsidiary of the Company ("Ten Percent Stockholder") will be
exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for Options to become exercisable at one
time or from time to time, periodically or otherwise, in such number of shares
or percentage of shares as the Committee determines.

         5.3. Exercise Price. The Exercise Price of an Option will be determined
by the Committee when the Option is granted and may be not less than 75% of the
Fair Market Value of the Stock on the date of grant; provided that: (i) the
Exercise Price of an ISO will be not less than 100% of the Fair Market Value of
the Stock on the date of grant; and (ii) the Exercise Price of any ISO granted
to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value
of the Stock on the date of grant. Payment for the Stock purchased shall be made
in accordance with Section 8 of this Plan.

         5.4. Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

         5.5. Method of Exercise. Options may be exercised only by delivery to
the Company of a written option exercise agreement (the "Exercise Agreement") in
a form approved by the Committee (which need not be the same for each
Participant), stating the number of Stock being purchased, the restrictions
imposed on the Stock purchased under such Exercise Agreement, if any, and such
representations and agreements regarding Participant's investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Stock being purchased.

                                       3
<PAGE>

         5.6. Termination. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:

          (a)  If the Participant is an employee, a manager or a director at the
               time an Award is made and is Terminated for any reason except
               death, Disability, Retirement, for Cause, or Voluntary
               Termination (as defined below), then the Participant may exercise
               such Participant's Options only to the extent that such Options
               have vested on or prior to the Termination Date no later than
               three (3) months after the Termination Date (or such shorter or
               longer time period not exceeding five (5) years as may be
               determined by the Committee, with any exercise beyond three (3)
               months after the Termination Date deemed to be an NQSO), but in
               any event, no later than the expiration date of the Options.

          (b)  If the Participant is an employee, a manager or a director at the
               time an Award is made and such Participant voluntarily terminates
               employment with the Company (a "Voluntary Termination"), then the
               Participant may exercise such Participant's Options only to the
               extent that such Options have vested on or prior to the
               Termination Date no later than one (1) month after the
               Termination Date (or such shorter or longer time period not
               exceeding five (5) years as may be determined by the Committee,
               with any exercise beyond three (3) months after the Termination
               Date deemed to be an NQSO), but in any event, no later than the
               expiration date of the Options.

          (c)  If the Participant is an employee, a manager or a director at the
               time an Award is made and is Terminated because of Participant's
               death or Disability, then Participant's Options shall vest in
               full, notwithstanding such Participant's then applicable vesting
               schedule, and must be exercised by Participant (or Participant's
               legal representative or authorized assignee) no later than twelve
               (12) months after the Termination Date (or such shorter or longer
               time period not exceeding five (5) years as may be determined by
               the Committee, with any such exercise beyond twelve (12) months
               after the Termination Date when the Termination is for
               Participant's death or Disability, deemed to be an NQSO), but in
               any event no later than the expiration date of the Options.

          (d)  If the Participant is an employee, a manager or a director at the
               time an Award is made and Termination occurs because of
               Participant's Retirement, then the Participant may exercise such
               Participant's Options only to the extent that such Options have
               vested on or prior to the Termination Date, together with such
               number of Options as are scheduled to vest at the next regularly
               scheduled vesting date in accordance with the specific provisions
               of the vesting schedule contained in such Participant's Award
               Agreement, provided that such regularly scheduled vesting date

                                       4
<PAGE>

               would have occurred not later than twelve (12) months after the
               Termination Date, no later than twelve (12) months after the
               Termination Date (or such shorter or longer time period not
               exceeding five (5) years as may be determined by the Committee,
               with any exercise beyond three (3) months after the Termination
               Date deemed to be an NQSO), but in any event, no later than the
               expiration date of the Options.

          (e)  Notwithstanding the provisions in paragraph 5.6(a) above, if a
               Participant is an employee and is terminated for Cause, neither
               the Participant, the Participant's estate nor such other person
               who may then hold the Option shall be entitled to exercise any
               Option with respect to any Stock whatsoever, after termination of
               service, whether or not after termination of service the
               Participant may receive payment from the Company or Subsidiary
               for vacation pay, for services rendered prior to termination, for
               services rendered for the day on which termination occurs, for
               salary in lieu of notice, or for any other benefits. In making
               such determination, the Board shall give the Participant an
               opportunity to present to the Board evidence on his behalf. For
               the purpose of this paragraph, termination of service shall be
               deemed to occur on the date when the Company dispatches notice or
               advice to the Participant that his service is terminated.

          (f)  If the Participant is not an employee or a director, the Award
               Agreement shall specify treatment of the Award upon Termination.

         5.7. Limitations on ISO. The aggregate Fair Market Value (determined as
of the date of grant) of Stock with respect to which ISO's are exercisable for
the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company, Parent or Subsidiary
of the Company) will not exceed $100,000. If the Fair Market Value of Stock on
the date of grant with respect to which ISO's are exercisable for the first time
by a Participant during any calendar year exceeds $100,000, then the Options for
the first $100,000 worth of Stock to become exercisable in such calendar year
will be ISO's and the Options for the amount in excess of $100,000 that become
exercisable in that calendar year will be NQSO's. In the event that the Code or
the regulations promulgated hereunder are amended after the Effective Date of
this Plan to provide for a different limit on the Fair Market Value of Stock
permitted to be subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.

         5.8. Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefore, provided that, except as expressly provided for in this
Plan or an Award Agreement, any such action may not, without the written consent
of a Participant, impair any of such Participant's rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
The Committee may, by a written notice to affected Participants, reduce the
Exercise Price of

                                       5
<PAGE>

outstanding Options without the consent of such Participants; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 5.3 of this Plan for Options granted on the
date the action is taken to reduce the Exercise Price.

         5.9. Limitations on Exercise. The Committee may specify a reasonable
minimum number of Stock that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Stock for which it is then exercisable.

     6. RESTRICTED STOCK AWARD. A Restricted Stock Award is an offer by the
Company to sell to an eligible person (a "Participant-Offeree") Stock that are
subject to restrictions. The Committee will determine to whom an offer will be
made, the number of Stock the Participant-Offeree may purchase, the price to be
paid (the "Purchase Price"), the restrictions to which the Stock will be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:

         6.1. Form of Restricted Stock Award. All purchases under a Restricted
Stock Award made pursuant to this Plan will be evidenced by an Award Agreement
("Restricted Stock Purchase Agreement") that will be in such form (which need
not be the same for each Participant-Offeree) as the Committee will from time to
time approve, and will comply with and be subject to the terms and conditions of
this Plan. A Participant-Offeree shall evidence his or her acceptance of the
offer of Restricted Stock by executing and delivering the Restricted Stock
Purchase Agreement and full payment for the Stock to the Company not later than
thirty (30) days from the date the Restricted Stock Purchase Agreement is
delivered to the Participant-Offeree. If the Participant-Offeree does not
execute and deliver the Restricted Stock Purchase Agreement and tender full
payment for the Stock to the Company within said thirty (30) days, then the
offer will terminate, unless otherwise determined by the Committee.

         6.2. Purchase Price. The Purchase Price of Stock sold pursuant to a
Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted.

         6.3. Terms of Restricted Stock Awards. Restricted Stock Awards shall be
subject to such restrictions as the Committee may impose. These restrictions may
be based upon completion of a specified number of years of service with the
Company or upon completion of the performance goals as set out in advance in the
Participant's individual Restricted Stock Purchase Agreement. Restricted Stock
Awards may vary from Participant to Participant and between groups of
Participants. Prior to the grant of a Restricted Stock Award, the Committee
shall: (a) determine the nature, length and starting date of any Performance
Period for the Restricted Stock Award; (b) select from among the Performance
Factors to be used to measure performance goals, if any; and (c) determine the
number of Stock that may be awarded to the Participant. Prior to the payment of
any Restricted Stock Award, the Committee shall determine the extent to which
such Restricted Stock Award has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to Restricted Stock
Awards that are subject to different Performance Periods and have different
performance goals and other criteria.

                                       6
<PAGE>

         6.4. Stock Restrictions. Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend until the lapse of all
restrictions with respect to such Stock:

         "Transfer of this certificate and the Stock represented hereby is
restricted pursuant to the terms of a Restricted Stock Purchase Agreement, dated
as of _______, between the Company and ____________, and the Certificate of
Incorporation and the Bylaws of the Company, as amended from time to time. A
copy of the Certificate of Incorporation and Bylaws are on file at the principal
executive offices of the Company."

         Appropriate stop-transfer orders with respect to Restricted Stock shall
be entered on the Company's Stockholder records and/or with the Company's
transfer agent and registrar; provided, however, that the failure or refusal to
enter any stop-transfer order shall not be construed as a modification or waiver
of any provision of the Plan, the Award Agreement, or otherwise.

         6.5. Termination During Performance Period. If a Participant is
Terminated during a Performance Period for any reason, then such Participant
will be entitled to payment (whether in Stock, cash or otherwise) with respect
to the Restricted Stock Award only to the extent earned as of the date of
Termination in accordance with the Restricted Stock Purchase Agreement, unless
the Committee will determine otherwise.

     7. STOCK BONUSES.

         7.1. Awards of Stock Bonuses. A Stock Bonus is an award of Stock (which
may consist, in whole or in part, of Restricted Stock) for services rendered to
the Company or any Parent or Subsidiary of the Company. A Stock Bonus may be
awarded for past services already rendered to the Company, or any Parent or
Subsidiary of the Company pursuant to an Award Agreement (the "Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. A Stock Bonus may
be awarded upon satisfaction of such performance goals as are set out in advance
in the Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Bonuses may
vary from Participant to Participant and between groups of Participants, and may
be based upon the achievement by the Company, Parent or Subsidiary and/or
individual of Performance Factors or such other criteria as the Committee may
determine.

         7.2. Terms of Stock Bonuses. The Committee will determine the number of
Stock to be awarded to the Participant. If the Stock Bonus is being earned upon
the satisfaction of performance goals pursuant to a Performance Stock Bonus
Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any; and
(c) determine the number of Stock that may be awarded to the Participant. Prior
to the payment of any Stock Bonus, the Committee shall determine the extent to
which such Stock Bonuses have been earned. Performance Periods may overlap and
Participants

                                       7
<PAGE>

may participate simultaneously with respect to Stock Bonuses that are subject to
different Performance Periods and different performance goals and other
criteria. The number of Stock may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The
Committee may adjust the Performance Factors applicable to the Stock Bonuses to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.

         7.3. Form of Payment. The earned portion of a Stock Bonus may be paid
currently or on a deferred basis with such interest or dividend equivalent, if
any, as the Committee may determine. Payment may be made in the form of cash or
whole Stock or a combination thereof, either in a lump sum payment or in
installments, all as the Committee may determine.

     8. PAYMENT FOR STOCK PURCHASES.

         8.1. Payment. Payment for Stock purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:

          (a)  by cancellation of indebtedness of the Company to the
               Participant;

          (b)  by surrender of Stock that either: (1) have been owned by
               Participant for more than six (6) months and have been paid for
               within the meaning of SEC Rule 144 (and, if such Stock were
               purchased from the Company by use of a promissory note, such note
               has been fully paid with respect to such Stock); or (2) were
               obtained by Participant in the public market;

          (c)  by tender of a promissory note having such terms as may be
               approved by the Committee and bearing interest at a rate
               sufficient to avoid imputation of income under Sections 483 and
               1274 of the Code; provided, however, that Participants who are
               not employees or directors of the Company will not be entitled to
               purchase Stock with a promissory note unless the note is
               adequately secured by collateral other than the Stock;

          (d)  by waiver of compensation due or accrued to the Participant for
               services rendered;

          (e)  with respect only to purchases upon exercise of an Option, and
               provided that a public market for the Company's Stock exists:

          (f)  through a "same day sale" commitment from the Participant and a
               broker-dealer that is a member of the National Association of
               Securities Dealers (an "NASD Dealer") whereby the Participant
               irrevocably elects to exercise the Option and sell a portion of
               the Stock so purchased to pay for the Exercise Price, and whereby
               the NASD Dealer irrevocably commits upon receipt of such Stock to
               forward the Exercise Price directly to the Company; or

                                       8
<PAGE>

          (g)  through a "margin" commitment from the Participant and an NASD
               Dealer whereby the Participant irrevocably elects to exercise the
               Option and to pledge the Stock so purchased to the NASD Dealer in
               a margin account as security for a loan from the NASD Dealer in
               the amount of the Exercise Price, and whereby the NASD Dealer
               irrevocably commits upon receipt of such Stock to forward the
               Exercise Price directly to the Company; or

          (h)  by any combination of the foregoing.

     9. WITHHOLDING TAXES.

         9.1. Withholding Generally. Whenever Stock are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Stock. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

         9.2. Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may in its sole
discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Stock to be issued
that number of Stock having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Stock
withheld for this purpose will be made in accordance with the requirements
established by the Committee and shall be in writing in a form acceptable to the
Committee.

     10. PRIVILEGES OF STOCK OWNERSHIP. No Participant will have any of the
rights of a Stockholder with respect to any Stock Option until the Participant
has exercised his Stock Option, paid for the Stock, and the Stock has been
issued to the Participant. Thereafter, the Participant will be a Stockholder and
have all the rights of Stockholder with respect to such Stock, including the
right to vote and receive all dividends or other distributions made or paid with
respect to such Stock; provided, that if such Stock are Restricted Stock, then
any new, additional or different securities the Participant may become entitled
to receive with respect to such Stock by virtue of a dividend of Stock, split of
Stock or any other change in the legal or capital structure of the Company will
be subject to the same restrictions as the Restricted Stock; provided, further,
that the Participant will have no right to retain such stock dividends or stock
distributions with respect to Stock that are repurchased at the Participant's
Purchase Price or Exercise Price pursuant to Section 12 hereof.

     11. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by any Participant, and may not
be made subject to execution, attachment or similar process, otherwise than by
will or by the laws of descent and distribution, except as determined by the
Committee and expressly set forth in the Award Agreement.

                                       9
<PAGE>

     12. RESTRICTIONS ON STOCK. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase a portion of or all Stock held by a Participant following
such Participant's Termination at any time within ninety (90) days after the
later of Participant's Termination Date and the date Participant purchases Stock
under this Plan, for cash and/or cancellation of purchase money indebtedness, at
the Participant's Exercise Price or Purchase Price, as the case may be.

     13. CERTIFICATES. All certificates for Stock or other securities delivered
under this Plan will be subject to such stop-transfer orders, legends and other
restrictions consistent with the terms of the Awards as the Committee may deem
necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other
requirements of the SEC or any stock exchange or automated quotation system upon
which the Stock may be listed or quoted. 14. ESCROW; PLEDGE OF STOCK. To enforce
any restrictions on a Participant's Stock, the Committee may require the
Participant to deposit all certificates representing Stock, together with powers
of attorney or other instruments of transfer approved by the Committee,
appropriately endorsed in blank, with the Company or an agent designated by the
Company to hold in escrow until such restrictions have lapsed or terminated, and
the Committee may cause a legend or legends referencing such restrictions to be
placed on the certificates. Any Participant who is permitted to execute a
promissory note as partial or full consideration for the purchase of Stock under
this Plan will be required to pledge and deposit with the Company all or part of
the Stock so purchased as collateral to secure the payment of Participant's
obligation to the Company under the promissory note; provided, however, that the
Committee may require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the Company will have
full recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant's Stock or other collateral. In connection with
any pledge of the Stock, Participant will be required to execute and deliver a
written pledge agreement in such form as the Committee will from time to time
approve. In the discretion of the Committee, the pledge agreement may provide
that the Stock purchased with the promissory note may be released from the
pledge on a pro rata basis as the promissory note is paid.

     15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Stock (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant may agree.

     16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Stock may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. However, in the
event that an Award is not effective as discussed in the preceding sentence, the
Company will use reasonable efforts to modify, revise or renew such Award in a
manner so as to make the Award

                                       10
<PAGE>

effective. Notwithstanding any other provision in this Plan, the Company will
have no obligation to issue or deliver certificates for Stock under this Plan
prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Stock under any state or federal law
or ruling of any governmental body that the Company determines to be necessary
or advisable. The Company will be under no obligation to register the Stock with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.

     17. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship with the Company at any time,
with or without cause.

     18. CORPORATE TRANSACTIONS.

         18.1. Assumption or Replacement of Awards by Successor. If a
Change-of-Control Event occurs:

               (i) the successor company in any Change-of-Control Event may, if
               approved in writing by the Committee prior to any
               Change-of-Control Event:

                    (1) substitute equivalent Options or Awards or provide
               substantially similar consideration to Participants as was
               provided to Stockholders (after taking into account the existing
               provisions of the Awards), or

                    (2) issue, in place of outstanding Stock of the Company held
               by the Participant, substantially similar Stock or other property
               subject to repurchase restrictions no less favorable to the
               Participant.

               (ii) Notwithstanding anything in this Plan to the contrary, the
               Committee may, in its sole discretion, provide that the vesting
               of any or all Options and Awards granted pursuant to this Plan
               will accelerate immediately prior to the consummation of a
               Change-of-Control Event. If the Committee exercises such
               discretion with respect to Options, such Options will become
               exercisable in full prior to the consummation of such event at
               such time and on such conditions as the Committee determines, and
               if such Options are not exercised prior to the consummation of
               such event, they shall terminate at such time as determined by
               the Committee.

         18.2. Other Treatment of Awards. Subject to any greater rights granted
to Participants under Section 18.1, if a Change-of-Control Event occurs or has
occurred, any outstanding Awards will be treated as provided in the applicable

                                       11
<PAGE>

agreement or plan of merger, consolidation, dissolution, liquidation, or sale of
assets constituting the Change-of-Control Event.

         18.3. Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. If the Company assumes an award granted by another
company, the terms and conditions of such award will remain unchanged (except
that the exercise price and the number and nature of Stock issuable upon
exercise of any such option will be adjusted appropriately pursuant to Section
424(a) of the Code). If the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.

         18.4. Adjustment of Stock in Certain Capital Changes.

          (a)  Upon the occurrence of a Change-of-Control Event, an
               extraordinary transaction or other event or circumstance
               affecting the Stock shall occur, including, but not limited to,
               any distribution (whether in the form of cash, Stock or other
               property), reorganization or conversion into a corporation,
               recapitalization, Stock split, reverse Stock split,
               reorganization, merger, consolidation, spin-off, combination,
               repurchase, Stock exchange, sale of assets or other similar
               transaction or event, and the Committee determines that a change
               or adjustment in the terms of any Award is appropriate, then the
               Committee may, in its sole discretion, make such equitable
               changes or adjustments or take any other actions that it deems
               necessary or appropriate (which shall be effective at such time
               as the Committee in its sole discretion determines), including,
               but not limited to (A) causing changes or adjustments to any or
               all of (i) the number and kind of Stock or other securities or
               property which may thereafter be issued in connection with
               Awards, (ii) the number and kind of Stock or other securities or
               property issued or issuable in respect of outstanding Awards,
               (iii) the exercise price relating to any Award, and (iv) the
               number and kind of Stock or other securities reserved for
               issuance under this Plan, and (B) canceling outstanding Awards in
               exchange for replacement awards or cash, in such amounts or for
               such price as the Committee may determine as fair, in its sole
               discretion, it being understood that the Committee shall have the
               authority to cause different changes or adjustments to be made to
               any Awards held by Participants even if such Awards are identical
               and such Participants are similarly situated; further, provided,
               however, that with respect to Options which ------- -------- are
               intended by the Committee to remain ISOs' subsequent to any such
               adjustment, such adjustment shall be made in accordance with
               Section 424 of the Code.

                                       12
<PAGE>

          (b)  If the Company engages in a transaction the principal purpose of
               which is to change the Company from a "pass-through" entity for
               federal income tax purpose to an entity taxed as a corporation,
               the Options and Awards outstanding immediately prior to the
               consummation of transaction shall be treated by the surviving
               company in such transaction in the same manner as specified in
               Section 18.1(b)(i)(1).

     19. ADOPTION AND STOCKHOLDER APPROVAL. This Plan became effective on
December 18, 2002, the date that this Plan was approved by the Stockholders of
the Company, consistent with applicable laws (the "Effective Date").

     20. TERM OF PLAN. Unless earlier terminated as provided herein, this Plan
will terminate ten (10) years from the date this Plan is adopted by the Board
or, if earlier, the date of Stockholder approval.

     21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend this Plan in any respect, including without limitation amendment of any
form of Award Agreement or instrument to be executed pursuant to this Plan;
provided, however, that the Board will not, without the approval of the
Stockholders of the Company, amend this Plan in any manner that requires such
Stockholder approval.

     22. EFFECT OF SECTION 162(M) OF THE CODE. The Plan and all Awards issued
there under are intended to be exempt from the application of Section 162(m) of
the Code, which restricts under certain circumstances the Federal income tax
deduction for compensation paid by a public company to named executives in
excess of $1 million per year. The exemption is based on Treasury Regulation
Section 1.162-27(f) as in effect on the effective date of the Plan, with the
understanding that such regulation generally exempts from the application of
Section 162(m) of the Code compensation paid pursuant to a plan that existed
before a company becomes publicly held. The Committee may, without Stockholder
approval (unless otherwise required to comply with Rule 16b-3 under the Exchange
Act), amend the Plan retroactively and/or prospectively to the extent it
determines necessary in order to comply with any subsequent clarification of
Section 162(m) of the Code required to preserve the Company's Federal income tax
deduction for compensation paid pursuant to the Plan. To the extent that the
Committee determines as of the Date of Grant of an Award that (i) the Award is
intended to comply with Section 162(m) of the Code and (ii) the exemption
described above is no longer available with respect to such Award, such Award
shall not be effective until any Stockholder approval required under Section
162(m) of the Code has been obtained.

     23. GENERAL.

         23.1. Additional Provisions of an Award. Awards under the Plan also may
be subject to such other provisions (whether or not applicable to the benefit
awarded to any other Participant) as the Committee determines appropriate
including, without limitation, provisions to assist the Participant in financing
the purchase of Stock upon the exercise of Options, provisions for the
forfeiture of or restrictions on resale or other disposition of Stock acquired
under any Award, provisions giving the Company the right to repurchase Stock
acquired under any Award in the event the Participant elects to dispose of such
Stock, and provisions to comply with Federal and

                                       13
<PAGE>

state securities laws and Federal and state tax withholding requirements. Any
such provisions shall be reflected in the applicable Award Agreement.

         23.2. Claim to Awards and Employment Rights. Unless otherwise expressly
agreed in writing by the Company, no employee or other person shall have any
claim or right to be granted an Award under the Plan or, having been selected
for the grant of an Award, to be selected for a grant of any other Award.
Neither the Plan nor any action taken hereunder shall be construed as giving any
Participant any right to be retained in the employ or service of the Company, a
Subsidiary or an Affiliate.

         23.3. Designation and Change of Beneficiary. Each Participant shall
file with the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the amounts payable with respect to
an Award of Restricted Stock, if any, due under the Plan upon his death. A
Participant may, from time to time, revoke or change his beneficiary designation
without the consent of any prior beneficiary by filing a new designation with
the Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Participant's death, and in no event shall it be effective as of a date prior to
such receipt. If no beneficiary designation is filed by the Participant, the
beneficiary shall be deemed to be his or her spouse or, if the Participant is
unmarried at the time of death, his or her estate.

         23.4. Payments to Persons Other Than Participants. If the Committee
shall find that any person to whom any amount is payable under the Plan is
unable to care for his or her affairs because of illness or accident, or is a
minor or is otherwise legally incompetent or incapacitated, or has died, then
any payment due to such person or such person's estate (unless a prior claim
therefore has been made by a duly appointed legal representative) may, if the
Committee so directs the Company, be paid to such person's spouse, child,
relative, an institution maintaining or having custody of such person, or any
other person deemed by the Committee, in its absolute discretion, to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Committee and the
Company therefore.

         23.5. No Liability of Committee Members. No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by such Committee member or on his or her behalf in his or her capacity
as a of the Committee nor for any mistake of judgment made in good faith, and
the Company shall indemnify and hold harmless each member of the Committee and
each other employee, officer or Manager of the Company to whom any duty or power
relating to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Operating Agreement or other governing or charter documents,
or as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

                                       14
<PAGE>

         23.6. Governing law. The Plan and all agreements hereunder shall be
governed by and construed in accordance with the internal laws of the State of
Delaware without regard to the principles of conflicts of law thereof.

         23.7. Funding. No provision of the Plan shall require the Company, for
the purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Participants shall
have no rights under the Plan other than as general unsecured creditors of the
Company, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, they shall have the same
rights as other employees under general law.

         23.8. Reliance on Reports. Each member of the Committee and each member
of the Board shall be fully justified in relying, acting or failing or refusing
to act, and shall not be liable for having so relied, acted or failed or refused
to act in good faith, upon any report made by the independent public accountant
of the Company and its Subsidiaries and Affiliates and upon any other
information furnished in connection with the Plan by any person or persons other
than himself.

         23.9. Relationship to Other Benefits. No payment under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary except as otherwise specifically provided in such other plan.

         23.10. Expenses. The expenses of administering the Plan shall be borne
by the Company and its Subsidiaries and Affiliates.

         23.11. Pronouns. Masculine pronouns and other words of masculine gender
shall refer to both men and women.

         23.12. Titles and Headings. The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings shall
control.

         23.13. Termination of Employment. For all purposes herein, a person who
transfers from employment or service with the Company to employment or service
with a Subsidiary or Affiliate or vice versa shall not be deemed to have
terminated employment or service with the Company, a Subsidiary or Affiliate.

         23.14. Nonexclusively of The Plan. Neither the adoption of this Plan by
the Board, the submission of this Plan to the Stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such incentive arrangements as it
may deem desirable, including, without limitation, the granting of Stock options
and bonuses otherwise than under this Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.

                                       15
<PAGE>

     24. DEFINITIONS. As used in this Plan, the following terms will have
the following meanings:

         "Affiliate" means any affiliate of the Company within the meaning of 17
CFR ss. 230.405.

         "Award" means any award under this Plan, including any Option,
Restricted Stock or Stock Bonus.

         "Award Agreement" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.

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

         "Cause" means the Company, a Subsidiary or Affiliate having cause to
terminate a Participant's employment or service under any existing employment,
consulting or any other agreement between the Participant and the Company or a
Subsidiary or Affiliate or, in the absence of such an employment, consulting or
other agreement, upon (i) the determination by the Committee that the
Participant has ceased to perform his duties to the Company, a Subsidiary or
Affiliate (other than as a result of his incapacity due to physical or mental
illness or injury), which failure amounts to an intentional and extended neglect
of his duties to such party, (ii) the Committee's determination that the
Participant has engaged or is about to engage in conduct materially injurious to
the Company, a Subsidiary or Affiliate or (iii) the Participant having been
convicted of a felony or a misdemeanor carrying a jail sentence of six (6)
months or more.

         "Change-of-Control Event" means any one or more of the following:

               (i) a dissolution or liquidation of the Company,

               (ii) a merger or consolidation in which the Company is not the
               surviving corporation (other than a merger or consolidation with
               a wholly-owned subsidiary, are in corporation of the Company in a
               different jurisdiction, or other transaction in which there is no
               substantial change in the Stockholders of the Company or their
               relative Stock holdings and the Awards granted under this Plan
               are assumed, converted or replaced by the successor corporation,
               which assumption will be binding on all Participants),

               (iii) a merger in which the Company is the surviving corporation
               but after which the Stockholders of the Company immediately prior
               to such merger (other than any Stockholder that merges, or which
               owns or controls another corporation that merges, with the
               Company in such merger) cease to own their Stock or other equity
               interest in the Company,

               (iv) the sale of substantially all of the assets of the Company,
               or

                                       16
<PAGE>

               (v) the acquisition, sale, or transfer of more than 50% of the
               outstanding Stock of the Company by tender offer or similar
               transaction.

         Notwithstanding the foregoing, a transaction the principal purpose of
which is to change the Company from a "pass-through" entity for federal income
tax purpose to an entity taxed as a corporation shall not, by itself, constitute
a Change-of-Control Event.

         "Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.

         "Committee" means (i) the Stock Option Committee or such other
committee appointed by the Board consisting of two or more Outside Directors or
(ii) the Board. If no Committee has been appointed, or if no Committee is
serving as such, any reference to the Committee shall include the Board.

         "Company" means DOBI Medical Systems, Inc., a Delaware corporation, and
any successor thereto.

         "Director" means a person who is a director of the Board of Directors
of the Company.

         "Disability" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee.

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

         "Exercise Price" means the price at which a holder of an Option may
purchase the Stock issuable upon exercise of the Option.

         "Fair Market Value" means, as of any date, the value of a Stock
determined as follows:

          (a)  if such Stock are then quoted on the NASDAQ National Market, the
               closing price on the NASDAQ National Market on the date of
               determination as reported in The Wall Street Journal;

          (b)  if such Stock are publicly traded and are then listed on a
               national securities exchange, the closing price on the date of
               determination on the principal national securities exchange on
               which the Stock are listed or admitted to trading as reported in
               The Wall Street Journal;

          (c)  if such Stock are publicly traded but is not quoted on the NASDAQ
               National Market nor listed or admitted to trading on a national
               securities exchange, the average of the closing bid and asked
               prices on the date of determination as reported in The Wall
               Street Journal or, if not reported in The Wall Street Journal,

                                       17
<PAGE>

               as reported by any reputable publisher or quotation service, as
               determined by the Committee in good faith;

          (d)  if none of the foregoing is applicable, by the Committee in good
               faith based upon factors available at the time of the
               determination, including, but not limited to, capital raising
               activities of the Company.

         "ISO" has the meaning set forth in Section 5.

         "Insider" means an officer or Manager of the Company or any other
person whose transactions in the Company's securities would be subject to
Section 16 of the Exchange Act if the Company were subject to the reporting
requirements of the Exchange Act.

         "NQSO" has the meaning set forth in Section 5.

         "Option" means an award of an option to purchase Stock pursuant to
Section 5.

         "Outside Director" means a person who is (i) a member of the Board of
Directors of the Company, (ii) a "non employee director" within the meaning of
Rule 16b-3 under the Exchange Act, or any successor rule or regulation, and
(iii) an "outside director" within the meaning of Section 162(m) of the Code.

         "Parent" means any corporation or other legal entity (other than the
Company) in an unbroken chain of corporations and/or other legal entities ending
with the Company if each of such corporations and other legal entities other
than the Company owns stock, other equity securities or other equity interests
possessing 50% or more of the total combined voting power of all classes of
stock, equity securities or other equity interests in one of the other
corporations or other entities in such chain.

         "Participant" means a person who receives an Award under this Plan.

         "Performance Factors" means the factors selected by the Committee from
time to time, including, but not limited, the following measures to determine
whether the performance goals established by the Committee and applicable to
Awards have been satisfied:

          (a)  Net revenue and/or net revenue growth;

          (b)  Earnings before income taxes and amortization and/or earnings
               before income taxes and amortization growth;

          (c)  Operating income and/or operating income growth;

          (d)  Net income and/or net income growth;

          (e)  Earnings per share and/or earnings per share growth;

          (f)  Total Stockholder return and/or total Stockholder return growth;

                                       18
<PAGE>

          (g)  Return on equity;

          (h)  Operating cash flow return on income;

          (i)  Adjusted operating cash flow return on income;

          (j)  Economic value added;

          (k)  Individual confidential business objectives;

          (l)  Successful capital raises;

          (m)  Obtaining standard FDA approvals;

          (n)  Completion of product development;

          (o)  Recruiting key employees;

          (p)  Actual shipments expressed in Stock or dollars;

          (q)  Successful completion of an audit;

          (r)  Sales levels; and

          (s)  Other factors deemed reasonable and appropriate by the Committee.

         "Performance Period" means the period of service determined by the
Committee, not to exceed five years, during which years of service or
performance is to be measured for Restricted Stock Awards or Stock Bonuses.

         "Plan" means this DOBI Medical Systems, Inc., 2000 Stock Incentive
Plan, as amended from time to time.

         "Restricted Stock Award" means an award of Stock pursuant to Section 6.

         "Retirement" shall mean retirement pursuant to the retirement policy
developed by the Committee, if any, as may be applicable at the time that a
Participant in question voluntarily ceases to be an employee, manager or
director of the Company following attaining retirement age, which retirement age
shall initially be set at age 65, unless and until the Committee in its
discretion determines otherwise.

         "SEC" means the Securities and Exchange Commission.

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

         "Stockholder" means any holder of the Company's Blank Check Preferred
Stock, its Class A Preferred Shares, or its Common Stock, as defined in the
Company's Certificate of Incorporation, as it may be amended from time to time,
which stock has been duly authorized and validly issued.

                                       19
<PAGE>

         "Subsidiary" means any corporation or other legal entity (other than
the Company) in an unbroken chain of corporations and/or other legal entities
beginning with the Company if each of the corporations and entities other than
the last corporation or entity in the unbroken chain owns stock, other equity
securities or other equity interests possessing 50% or more of the total
combined voting power of all classes of stock, other equity securities or other
equity interests in one of the other corporations or entities in such chain.

         "Ten Percent Stockholder" has the meaning set forth in Section 5.2.

         "Termination" or "Terminated" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director Manager, consultant,
independent contractor, or advisor to the Company or a Parent or Subsidiary of
the Company. An employee will not be deemed to have ceased to provide services
in the case of (i) sick leave, (ii) military leave, or (iii) any other leave of
absence approved by the Committee, provided, that such leave is for a period of
not more than 90 days, unless re-employment upon the expiration of such leave is
guaranteed by contract or statute or unless provided otherwise pursuant to
formal policy adopted from time to time by the Company and issued and
promulgated to employees in writing. In the case of any employee on an approved
leave of absence, the Committee may make such provisions respecting suspension
of vesting of the Award while on leave from the employ of the Company or a
Subsidiary as it may deem appropriate, except that in no event may an Option be
exercised after the expiration of the term set forth in the Option agreement.
The Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").

         "Stock" means the common stock of the Company having a par value of
$0.001 per share, and as defined in the Company's Certificate of Incorporation,
as it maybe amended from time to time, which Stock has been or is hereafter
reserved for issuance under this Plan, as adjusted pursuant to Sections 2 and 18
hereof, and any successor security.

         "Stock Bonus" means an award of Stock, or cash in lieu of Stock,
pursuant to Section 7.

         "Unvested Stock" means "Unvested Stock" as defined in the Award
Agreement.

         "Vested Stock" means "Vested Stock" as defined in the Award Agreement.

                                       20
<PAGE>

                                  CERTIFICATION

     The undersigned, being the Chairman and Chief Executive Officer of DOBI
Medical Systems, Inc. , a Delaware Corporation, hereby certifies that the
foregoing is a true and complete copy of the DOBI Medical Systems, Inc., 2000
Stock Incentive Plan, as originally adopted by the Board of Managers and Members
of the Company on September 13, 2000, as amended by the Board of Managers and
Members thereafter from time to time through December 18, 2002, and as DOBI
Medical Systems, LLC converted into DOBI Medical Systems, Inc as of January 1,
2003, and that said Plan is in full force and effect on the date hereof, without
further amendment or modification.

Dated As Of January 1, 2003.

     /s/ Philip C. Thomas
     -------------------------
     Phillip C. Thomas
     Chairman and Chief Executive Officer

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