Document:

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EXHIBIT 10.3
                              CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT (the "Agreement") is made effective as of the 6TH day
of August, 2003, by and between Russ Courtnall of 3120 Humber Road, Victoria, BC
V8R 3T1 ("Consultant") and MIV Therapeutics, Inc., a Nevada corporation with its
offices located in #1 - 8765 Ash Street, Vancouver, B.C. V6P 6T3 (the
"Company").

         WHEREAS, the Consultant is an individual with experience in public
relations advisory services; and

         WHEREAS, the Company desires to retain Consultant to advise and assist
the Company in its development on the terms and conditions set forth below.

         NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and
Consultant agree as follows:

1.       ENGAGEMENT

         The Company hereby retains Consultant, effective as of the date hereof
         (the "Effective Date") and continuing until termination, as provided
         herein, to provide the Company with such regular and customary public
         relations advisory and media liaison services as are reasonably
         requested by the Company, provided that Consultant shall not be
         required to undertake duties not reasonably within the scope of the
         advisory services in which it is generally engaged. In performance of
         its duties, Consultant shall provide the Company with the benefits of
         its best judgment and efforts. It is understood and acknowledged by the
         parties that the value of Consultant's advice is not measurable in a
         quantitative manner and Consultant shall be obligated to render advice,
         upon the request of the Company, in good faith, as shall be determined
         by Consultant. Consultant's duties may include, but will not
         necessarily be limited to the services described above (collectively
         the "Services").

         The Services shall expressly exclude any tax, legal, regulatory,
         actuarial, accounting, or other specialist advice which require
         licenses or certification which Consultant may not have.

2.       TERM

         This Agreement shall have a term of three (3) months (the "Primary
         Term"), commencing with the Effective Date.

3.       TIME AND EFFORT OF CONSULTANT

         Consultant shall allocate time and Consultant's Personnel as it deems
         necessary to provide the Services. The particular amount of time may
         vary from day to day or week to week. Except as otherwise agreed,
         Consultant's monthly statement identifying, in general, tasks performed
         for the Company shall be conclusive evidence that the Services have
         been performed. Additionally, in the absence of willful misfeasance,
         bad faith, negligence or reckless disregard for the obligations or
         duties hereunder by Consultant, neither Consultant nor Consultant's

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         Personnel shall be liable to the Company or any of its shareholders for
         any act or omission in the course of or connected with rendering the
         Services, including but not limited to losses that may be sustained in
         any corporate act in any subsequent Business Opportunity (as defined
         herein) undertaken by the Company as a result of advice provided by
         Consultant or Consultant's Personnel.

4.       COMPENSATION

         The Company agrees to pay Consultant a fee for the Services
         ("Consulting Fee") in the amount of 250,000 (two hundred and fifty
         thousand) warrants to purchase common stock. The warrants are priced at
         $0.40 per share with an expiry date of 3 (three) months from the
         declared effective date of the Form SB-2 under which the warrants are
         registered.

5.       REGISTRATION OF SHARES

         The Company agrees that any shares underlying the warrants issued under
         this Agreement will be registered on Form SB-2 with the Securities and
         Exchange Commission and will be unrestricted shares.

6.       COSTS AND EXPENSES

         All third party and out-of-pocket expenses incurred by Consultant in
         the performance of the Services or for the settlement of debts shall be
         paid by the Company, or Consultant shall be reimbursed if paid by
         Consultant on behalf of the Company, within ten (10) days of receipt of
         written notice by Consultant, provided that the Company must approve in
         advance all such expenses in excess of USD$100 per month.

7.       PLACE OF SERVICES

         The Services provided by Consultant or Consultant's Personnel hereunder
         will be performed at Consultant's offices except as otherwise mutually
         agreed by Consultant and the Company.

8.       INDEPENDENT CONTRACTOR

         Consultant and Consultant's Personnel will act as an independent
         contractor in the performance of its duties under this Agreement.
         Accordingly, Consultant will be responsible for payment of all federal,
         state, and local taxes, if any, on compensation paid under this
         Agreement, including income and social security taxes, unemployment
         insurance, and any other taxes due relative to Consultant's Personnel,
         and any and all business license fees as may be required. This
         Agreement neither expressly NOR impliedly creates a relationship of
         principal and agent, or employee and employer, between Consultant's
         Personnel and the Company. Neither Consultant nor Consultant's
         Personnel are authorized to enter into any agreements on behalf of the
         Company. The Company expressly retains the right to approve, in its
         sole discretion, each Asset Opportunity or Business Opportunity
         introduced by Consultant, and to make all final decisions with respect
         to effecting a transaction on any Business Opportunity.

9.       NO AGENCY EXPRESS OR IMPLIED

         This Agreement neither expressly nor impliedly creates a relationship
         of principal and agent between the Company and Consultant, or employee
         and employer as between Consultant's Personnel and the Company.

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10.      TERMINATION

         The Company and Consultant may terminate this Agreement prior to the
         expiration of the Term upon thirty (30) days written notice with mutual
         written consent. Failing to have mutual consent, without prejudice to
         any other remedy to which the terminating party may be entitled, if
         any, either party may terminate this Agreement with thirty (30) days
         written notice under the following conditions:

         (A)      BY THE COMPANY.
                  ---------------

                  (i)      If during the Primary Term of this Agreement or any
                           Extension Period, Consultant is unable to provide the
                           Services as set forth herein for thirty (30)
                           consecutive business days because of illness,
                           accident, or other incapacity of Consultant's
                           Personnel; or,

                  (ii)     If Consultant willfully breaches or neglects the
                           duties required to be performed hereunder; or,

                  (iii)    At Company's option without cause upon 30 days
                           written notice to Consultant; or

         (B)      BY CONSULTANT.
                  --------------

                  (i)      If the Company breaches this Agreement or fails to
                           make any payments or provide information required
                           hereunder; or,

                  (ii)     If the Company ceases business or, sells a
                           controlling interest to a third party, or agrees to a
                           consolidation or merger of itself with or into
                           another corporation, or enters into such a
                           transaction outside of the scope of this Agreement,
                           or sells substantially all of its assets to another
                           corporation, entity or individual outside of the
                           scope of this Agreement; or,

                  (iii)    If the Company subsequent to the execution hereof has
                           a receiver appointed for its business or assets, or
                           otherwise becomes insolvent or unable to timely
                           satisfy its obligations in the ordinary course of,
                           including but not limited to the obligation to pay
                           the Initial Fee, the Transaction fee, or the
                           Consulting Fee; or,

                  (iv)     If the Company subsequent to the execution hereof
                           institutes, makes a general assignment for the
                           benefit of creditors, has instituted against it any
                           bankruptcy proceeding for reorganization for
                           rearrangement of its financial affairs, files a
                           petition in a court of bankruptcy, or is adjudicated
                           a bankrupt; or,

                  (v)      If any of the disclosures made herein or subsequent
                           hereto by the Company to Consultant are determined to
                           be materially false or misleading.

         In the event Consultant elects to terminate without cause or this
         Agreement is terminated prior to the expiration of the Primary Term or
         any Extension Period by mutual written agreement, or by the Company for
         the reasons set forth in A(i) and (ii) above, the Company shall only be
         responsible to pay Consultant for unreimbursed expenses, Consulting Fee
         and Transaction Fee accrued up to and including the effective date of
         termination. If this Agreement is terminated by the Company for any

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         other reason, or by Consultant for reasons set forth in B(i) through
         (v) above, Consultant shall be entitled to any outstanding unpaid
         portion of reimbursable expenses, Transaction Fee, if any, and for the
         remainder of the unexpired portion of the applicable term of the
         Agreement.

11.      INDEMNIFICATION

         Subject to the provisions herein, the Company and Consultant agree to
         indemnify, defend and hold each other harmless from and against all
         demands, claims, actions, losses, damages, liabilities, costs and
         expenses, including without limitation, interest, penalties and
         attorneys' fees and expenses asserted against or imposed or incurred by
         either party by reason of or resulting from any action or a breach of
         any representation, warranty, covenant, condition, or agreement of the
         other party to this Agreement.

12.      REMEDIES

         Consultant and the Company acknowledge that in the event of a breach of
         this Agreement by either party, money damages would be inadequate and
         the non-breaching party would have no adequate remedy at law.
         Accordingly, in the event of any controversy concerning the rights or
         obligations under this Agreement, such rights or obligations shall be
         enforceable in a court of equity by a decree of specific performance.
         Such remedy, however, shall be cumulative and nonexclusive and shall be
         in addition to any other remedy to which the parties may be entitled.

13.      MISCELLANEOUS

         (A)      SUBSEQUENT EVENTS. Consultant and the Company each agree to
                  notify the other party if, subsequent to the date of this
                  Agreement, either party incurs obligations which could
                  compromise its efforts and obligations under this Agreement.

         (B)      AMENDMENT. This Agreement may be amended or modified at any
                  time and in any manner only by an instrument in writing
                  executed by the parties hereto.

         (C)      FURTHER ACTIONS AND ASSURANCES. At any time and from time to
                  time, each party agrees, at its or their expense, to take
                  actions and to execute and deliver documents as may be
                  reasonably necessary to effectuate the purposes of this
                  Agreement.

         (D)      WAIVER. Any failure of any party to this Agreement to comply
                  with any of its obligations, agreements, or conditions
                  hereunder may be waived in writing by the party to whom such
                  compliance is owed. The failure of any party to this Agreement
                  to enforce at any time any of the provisions of this Agreement
                  shall in no way be construed to be a waiver of any such
                  provision or a waiver of the right of such party thereafter to
                  enforce each and every such provision. No waiver of any breach
                  of or noncompliance with this Agreement shall be held to be a
                  waiver of any other or subsequent breach or noncompliance.

         (E)      ASSIGNMENT. Neither this Agreement nor any right created by it
                  shall be assignable by either party without the prior written
                  consent of the other.

         (F)      NOTICES. Any notice or other communication required or
                  permitted by this Agreement must be in writing and shall be
                  deemed to be properly given when delivered in person to an
                  officer of the other party, when deposited in the United
                  States or Canada mails for transmittal by certified or
                  registered mail, postage prepaid, or when deposited with a

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                  public telegraph company for transmittal, or when sent by
                  facsimile transmission charges prepared, provided that the
                  communication is addressed:

                  (i)      In the case of the Company:

                                                   MIV Therapeutics, Inc.
                                                   Suite 1, 8765 Ash Street
                                                   Vancouver, BC V6P 6T3
                                                   Telephone: (604) 301-9545
                                                   Telefax:   (604) 301-9546

                                                   Attn: Alan Lindsay, President

                  (ii)     In the case of Consultant:

                                                   Russ Courtnall
                                                   3120 Humber Road
                                                   Victoria, BC 3T1

                  or to such other person or address designated in writing by
                  the Company or Consultant to receive notice.

         (G)      HEADINGS. The section and subsection headings in this
                  Agreement are inserted for convenience only and shall not
                  affect in any way the meaning or interpretation of this
                  Agreement.

         (H)      GOVERNING LAW. This Agreement was negotiated and is being
                  contracted for in British Columbia, and shall be governed by
                  the laws of the Province of British Columbia, and Canada,
                  notwithstanding any conflict-of-law provision to the contrary.

         (I)      BINDING EFFECT. This Agreement shall be binding upon the
                  parties hereto and inure to the benefit of the parties, their
                  respective heirs, administrators, executors, successors, and
                  assigns.

         (J)      ENTIRE AGREEMENT. This Agreement contains the entire agreement
                  between the parties hereto and supersedes any and all prior
                  agreements, arrangements, or understandings between the
                  parties relating to the subject matter of this Agreement. No
                  oral understandings, statements, promises, or inducements
                  contrary to the terms of this Agreement exist. No
                  representations, warranties, covenants, or conditions, express
                  or implied, other than as set forth herein, have been made by
                  any party.

         (K)      SEVERABILITY. If any part of this Agreement is deemed to be
                  unenforceable the balance of the Agreement shall remain in
                  full force and effect.

         (L)      COUNTERPARTS. A facsimile, telecopy, or other reproduction of
                  this Agreement may be executed simultaneously in two or more
                  counterparts, each of which shall be deemed an original, but
                  all of which together shall constitute one and the same
                  instrument, by one or more parties hereto and such executed
                  copy may be delivered by facsimile or similar instantaneous
                  electronic transmission device pursuant to which the signature
                  of or on behalf of such party can be seen. In this event, such
                  execution and delivery shall be considered valid, binding and
                  effective for all purposes. At the request of any party
                  hereto, all parties agree to execute an original of this
                  Agreement as well as any facsimile, telecopy or other
                  reproduction hereof.

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         (M)      TIME IS OF THE ESSENCE. Time is of the essence of this
                  Agreement and of each and every provision hereof.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
above date.

         The "Company"                               The "Consultant"
         MIV Therapeutics, Inc.
         A Nevada Corporation

         /S/ PATRICK MCGOWAN                         /S/ RUSS COURTNALL
         -------------------                         ------------------
         Patrick McGowan                             Russ Courtnall
         CFO

                                       6<PAGE>

                                                                     Exhibit 4.1

                      SECURED DIVERSIFIED INVESTMENT, LTD.

                            2003 STOCK INCENTIVE PLAN

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                      SECURED DIVERSIFIED INVESTMENT, LTD.
                            2003 STOCK INCENTIVE PLAN

                                   ARTICLE ONE
                               GENERAL PROVISIONS

         I.       PURPOSE OF THE PLAN

         This 2003 Stock Incentive Plan is intended to promote the interests of
Secured Diversified Investment, Ltd., a Nevada corporation, by providing
eligible persons in the Corporation's service with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Corporation as an incentive for them to remain in such service.

         II.      STRUCTURE OF THE PLAN

                  A. The Plan shall be divided into two separate equity
         incentives programs:

                           - The Discretionary Option Grant Program under which
                  eligible persons may, at the discretion of the Plan
                  Administrator, be granted options to purchase shares of Common
                  Stock, and
                           - The Stock Issuance Program under which eligible
                  persons may, at the discretion of the Plan Administrator, be
                  issued shares of Common Stock directly, either through the
                  immediate purchase of such shares or as a bonus for services
                  rendered the Corporation (or any Parent or Subsidiary) or the
                  attainment of designated milestones.

                  B. The provisions of Articles One and Four shall apply to all
         equity programs under the Plan and shall govern the interests of all
         persons under the Plan.

         III.     ADMINISTRATION OF THE PLAN

                  A. The Primary Committee shall have sole and exclusive
         authority to administer the Discretionary Option Grant and Stock
         Issuance Programs with respect to Section 16 Insiders. The Primary
         Committee shall also have full power and authority to administer the
         Discretionary Option Grant and Stock Issuance Programs with respect to
         all other persons eligible to participate in those programs. However,
         the Board may, in its sole discretion, appoint a Secondary Committee to
         exercise separate but concurrent jurisdiction with the Primary
         Committee in the administration of the Discretionary Option Grant and
         Stock Issuance Programs with respect to one or more groups of persons
         eligible to participate in those programs other than Section 16
         Insiders. The Board may also, in its sole discretion, retain the power
         to administer those programs with respect to all persons other than
         Section 16 Insiders.

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                  B. Members of the Primary Committee or any Secondary Committee
         shall serve for such period of time as the Board may determine and may
         be removed by the Board at any time. The Board may also at any time
         terminate the functions of any Secondary Committee and reassume all
         powers and authority previously delegated to such committee.

                  C. Each Plan Administrator shall, within the scope of its
         administrative functions under the Plan, have full power and authority
         (subject to the provisions of the Plan) to establish such rules and
         regulations as it may deem appropriate for proper administration of the
         Discretionary Option Grant and Stock Issuance Programs and to make such
         determinations under, and issue such interpretations of, the provisions
         of those programs and any outstanding options or stock issuances
         thereunder as it may deem necessary or advisable. Decisions of the Plan
         Administrator within the scope of its administrative functions under
         the Plan shall be final and binding on all parties who have an interest
         in the Discretionary Option Grant and Stock Issuance Programs under its
         jurisdiction or any stock option or stock issuance thereunder.

                  D. Subject to the express limitations of the Plan, the Plan
         Administrator shall, within the scope of its administrative authority
         under the Plan, have full power and authority to structure or otherwise
         modify any awards made under the Discretionary Option Grant and Stock
         Issuance Programs to persons residing in foreign jurisdictions or held
         by any such persons so as to comply with the applicable laws and
         regulations of the jurisdictions in which those awards are made or
         outstanding.

                  E. Service on the Primary Committee or the Secondary Committee
         shall constitute service as a Board member, and members of each such
         committee shall accordingly be entitled to full indemnification and
         reimbursement as Board members for their service on such committee. No
         member of the Primary Committee or the Secondary Committee shall be
         liable for any act or omission made in good faith with respect to the
         Plan or any option grants or stock issuances under the Plan.

         IV.      ELIGIBILITY

                  A. The persons eligible to participate in the Discretionary
         Option Grant and Stock Issuance Programs are as follows: (i) Employees,
         and (ii) consultants and other independent advisors who provide
         services to the Corporation (or any Parent or Subsidiary).

                  B. Non-employee Board members shall not be eligible to
         participate in either the Discretionary Option Grant or Stock Issuance
         Program.

                  C. Each Plan Administrator shall, within the scope of its
         administrative jurisdiction under the Plan, have full authority to
         determine, (i) with respect to the option grants under the
         Discretionary Option Grant Program, which eligible persons are to
         receive such grants, the time or times when those grants are to be
         made, the number of shares to be covered by each such grant, the status
         of the granted option as either an Incentive Option or a Non-Statutory
         Option, the time or times when each option is to become exercisable,
         the vesting schedule (if any) applicable to the option shares and the

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         maximum term for which the option is to remain outstanding and (ii)
         with respect to stock issuances under the Stock Issuance Program, which
         eligible persons are to receive such issuances, the time or times when
         the issuances are to be made, the number of shares to be issued to each
         Participant, the vesting schedule (if any) applicable to the issued
         shares and the consideration for such shares.

                  D. The Plan Administrator shall have the absolute discretion
         either to grant options in accordance with the Discretionary Option
         Grant Program or to effect stock issuances in accordance with the Stock
         Issuance Program.

         V.       STOCK SUBJECT TO THE PLAN

                  A. The stock issuable under the Plan shall be shares of
         authorized but unissued or reacquired Common Stock, including shares
         repurchased by the Corporation on the open market. The number of shares
         of Common Stock reserved for issuance over the term of the Plan shall
         not exceed Ten Million (10,000,000) shares. Such reserve shall be in
         addition to the shares of Common Stock reserved for issuance under the
         Corporation's 2003 Non-Employee Director and Consultant Stock Incentive
         Plan. Accordingly, issuances under the 2003 Non-Employee Director and
         Consultant Stock Incentive Plan shall not reduce the number of shares
         of Common Stock reserved for issuance under this Plan, nor shall
         issuances under this Plan reduce the number of shares of Common Stock
         available for issuance under the 2003 Non-Employee Director and
         Consultant Stock Incentive Plan.

                  B. No one person participating in the Plan may receive stock
         options and direct stock issuances for more than 2,000,000 shares of
         Common Stock in the aggregate per calendar year.

                  C. Shares of Common Stock subject to outstanding options shall
         be available for subsequent issuance under the Plan to the extent those
         options expire, terminate or are cancelled for any reason prior to
         exercise in full. Unvested shares issued under the Plan and
         subsequently repurchased by the Corporation, at a price per share not
         greater than the original issue price paid per share, pursuant to the
         Corporation's repurchase rights under the Plan shall be added back to
         the number of shares of Common Stock reserved for issuance under the
         Plan and shall accordingly be available for reissuance through one or
         more subsequent option grants or direct stock issuances under the Plan.
         However, should the exercise price of an option under the Plan be paid
         with shares of Common Stock or should shares of Common Stock otherwise
         issuable under the Plan be withheld by the Corporation in satisfaction
         of the withholding taxes incurred in connection with the exercise of an
         option or the vesting of a stock issuance under the Plan, then the
         number of shares of Common Stock available for issuance under the Plan
         shall be reduced by the gross number of shares for which the option is
         exercised or which vest under the stock issuance, and not by the net
         number of shares of Common Stock issued to the holder of such option or
         stock issuance.

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                  D. If any change is made to the Common Stock by reason of any
         stock split, stock dividend, recapitalization, combination of shares,
         exchange of shares or other change affecting the outstanding Common
         Stock as a class without the Corporation's receipt of consideration,
         appropriate adjustments shall be made by the Plan Administrator to (i)
         the maximum number and/or class of securities issuable under the Plan,
         (ii) the maximum number and/or class of securities for which any one
         person may be granted stock options and direct stock issuances under
         the Plan per calendar year and (iii) the number and/or class of
         securities and the exercise price per share in effect under each
         outstanding option under the Plan. Such adjustments to the outstanding
         options are to be effected in a manner which shall preclude the
         enlargement or dilution of rights and benefits under such options. The
         adjustments determined by the Plan Administrator shall be final,
         binding and conclusive.

                                   ARTICLE TWO
                       DISCRETIONARY OPTION GRANT PROGRAM

         I.       OPTION TERMS

         Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.

                  A.       EXERCISE PRICE.

                           1. The exercise price per share shall be fixed by the
         Plan Administrator but shall not be less than one hundred percent
         (100%) of the Fair Market Value per share of Common Stock on the option
         grant date.

                           2. The exercise price shall become immediately due
         upon exercise of the option and shall be payable in one or more of the
         forms specified below as determined by the Plan Administrator at the
         time of grant and set forth in the applicable stock option agreement:

                                    i. cash or check made payable to the
                  Corporation,

                                    ii. shares of Common Stock held for the
                  requisite period necessary to avoid a charge to the
                  Corporation's earnings for financial reporting purposes and
                  valued at Fair Market Value on the Exercise Date, or

                                    iii. to the extent the option is exercised
                  for vested shares, through a special sale and remittance
                  procedure pursuant to which the Optionee shall concurrently
                  provide irrevocable instructions to (a) a brokerage firm
                  (reasonably satisfactory to the Corporation for purposes of
                  administrating such procedure in compliance with the
                  Corporation's pre-notification/pre clearance policies) to
                  effect the immediate sale of the purchased shares and remit to
                  the Corporation, out of the sale proceeds available on the

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                  settlement date, sufficient funds to cover the aggregate
                  exercise price payable for the purchased shares plus all
                  applicable income and employment taxes required to be withheld
                  by the Corporation by reason of such exercise and (b) the
                  Corporation to deliver the certificates for the purchased
                  shares directly to such brokerage firm in order to complete
                  the sale. Except to the extent such sale and remittance
                  procedure is utilized, payment of the exercise price for the
                  purchased shares must be made on the Exercise Date.

                  B.       EXERCISE AND TERM OF OPTIONS.

         Each option shall be exercisable at such time or times, during such
period and for such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the option. However, no
option shall have a term in excess of ten (10) years measured from the option
grant date.

                  C.       EFFECT OF TERMINATION OF SERVICE.

                           1. The following provisions shall govern the exercise
         of any options held by the Optionee at the time of cessation of Service
         or death: (i) Any option outstanding at the time of the Optionee's
         cessation of Service for any reason shall remain exercisable for such
         period of time thereafter as shall be determined by the Plan
         Administrator and set forth in the documents evidencing the option, but
         no such option shall be exercisable after the expiration of the option
         term. (ii) Any option held by the Optionee at the time of death and
         exercisable in whole or in part at that time may be subsequently
         exercised by the personal representative of the Optionee's estate or by
         the person or persons to whom the option is transferred pursuant to the
         Optionee's will or the laws of inheritance or by the Optionee's
         designated beneficiary or beneficiaries of that option. (iii) Should
         the Optionee's Service be terminated for Misconduct or should the
         Optionee otherwise engage in Misconduct while holding one or more
         outstanding options under this Article Two, then all those options
         shall terminate immediately and cease to be outstanding. (iv) During
         the applicable post-Service exercise period, the option may not be
         exercised in the aggregate for more than the number of vested shares
         for which the option is exercisable on the date of the Optionee's
         cessation of Service. No additional shares shall vest under the option
         following the Optionee's cessation of Service, except to the extent (if
         any) specifically authorized by the Plan Administrator in its sole
         discretion pursuant to an express written agreement with Optionee. Upon
         the expiration of the applicable exercise period or (if earlier) upon
         the expiration of the option term, the option shall terminate and cease
         to be outstanding for any vested shares for which the option has not
         been exercised.

                  2. The Plan Administrator shall have complete discretion,
         exercisable either at the time an option is granted or at any time
         while the option remains outstanding, to: (i) extend the period of time
         for which the option is to remain exercisable following the Optionee's
         cessation of Service from the limited exercise period otherwise in
         effect for that option to such greater period of time as the Plan

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         Administrator shall deem appropriate, but in no event beyond the
         expiration of the option term, and/or (ii) permit the option to be
         exercised, during the applicable post-Service exercise period, not only
         with respect to the number of vested shares of Common Stock for which
         such option is exercisable at the time of the Optionee's cessation of
         Service but also with respect to one or more additional installments in
         which the Optionee would have vested had the Optionee continued in
         Service.

                  D.       STOCKHOLDER RIGHTS.

                  The holder of an option shall have no stockholder rights with
         respect to the shares subject to the option until such person shall
         have exercised the option, paid the exercise price and become a holder
         of record of the purchased shares.

                  E.       REPURCHASE RIGHTS.

                  The Plan Administrator shall have the discretion to grant
         options which are exercisable for unvested shares of Common Stock.
         Should the Optionee cease Service while holding such unvested shares,
         the Corporation shall have the right to repurchase any or all of those
         unvested shares at a price per share equal to the LOWER of (i) the
         exercise price paid per share or (ii) the Fair Market Value per share
         of Common Stock at the time of the Optionee's cessation of Service. The
         terms upon which such repurchase right shall be exercisable (including
         the period and procedure for exercise and the appropriate vesting
         schedule for the purchased shares) shall be established by the Plan
         Administrator and set forth in the document evidencing such repurchase
         right.

                  F.       LIMITED TRANSFERABILITY OF OPTIONS.

                  During the lifetime of the Optionee, Incentive Options shall
         be exercisable only by the Optionee and shall not be assignable or
         transferable other than by will or the laws of inheritance following
         the Optionee's death. Non-Statutory Options shall be subject to the
         same restriction, except that the Plan Administrator may structure one
         or more Non-Statutory Options under the Discretionary Option Grant
         Program so that each such option may be assigned in whole or in part
         during the Optionee's lifetime to one or more members of the Optionee's
         family or to a trust established exclusively for one or more such
         family members or to Optionee's former spouse, to the extent such
         assignment is in connection with the Optionee's estate plan or pursuant
         to a domestic relations order. The assigned portion may only be
         exercised by the person or persons who acquire a proprietary interest
         in the option pursuant to the assignment. The terms applicable to the
         assigned portion shall be the same as those in effect for the option
         immediately prior to such assignment and shall be set forth in such

                                       7
<PAGE>

         documents issued to the assignee as the Plan Administrator may deem
         appropriate. Notwithstanding the foregoing, the Optionee may also
         designate one or more persons as the beneficiary or beneficiaries of
         his or her outstanding options under this Article Two, and those
         options shall, in accordance with such designation, automatically be
         transferred to such beneficiary or beneficiaries upon the Optionee's
         death while holding those options. Such beneficiary or beneficiaries
         shall take the transferred options subject to all the terms and
         conditions of the applicable agreement evidencing each such transferred
         option, including (without limitation) the limited time period during
         which the option may be exercised following the Optionee's death.

         II.      INCENTIVE OPTIONS

         The terms specified below shall be applicable to all Incentive Options.
Except as modified by the provisions of this Section II, all the provisions of
Articles One, Two and Seven shall be applicable to Incentive Options. Options
which are specifically designated as Non-Statutory Options when issued under the
Plan shall not be subject to the terms of this Section II.

                  A. ELIGIBILITY. Incentive Options may only be granted to
         Employees.

                  B. DOLLAR LIMITATION. The aggregate Fair Market Value of the
         shares of Common Stock (determined as of the respective date or dates
         of grant) for which one or more options granted to any Employee under
         the Plan (or any other option plan of the Corporation or any Parent or
         Subsidiary) may for the first time become exercisable as Incentive
         Options during any one calendar year shall not exceed the sum of One
         Hundred Thousand Dollars ($100,000). To the extent the Employee holds
         two (2) or more such options which become exercisable for the first
         time in the same calendar year, the foregoing limitation on the
         exercisability of such options as Incentive Options shall be applied on
         the basis of the order in which such options are granted.

                  C. 10% STOCKHOLDER. If any Employee to whom an Incentive
         Option is granted is a 10% Stockholder, then the exercise price per
         share shall not be less than one hundred ten percent (110%) of the Fair
         Market Value per share of Common Stock on the option grant date, and
         the option term shall not exceed five (5) years measured from the
         option grant date.

         III.     CHANGE IN CONTROL/HOSTILE TAKE-OVER

                  A. In the event of a Change in Control, each outstanding
         option under the Discretionary Option Grant Program shall automatically
         accelerate so that each such option shall, immediately prior to the
         effective date of that Change in Control, become exercisable for all
         the shares of Common Stock at the time subject to such option and may
         be exercised for any or all of those shares as fully vested shares of
         Common Stock. However, an outstanding option shall NOT become
         exercisable on such an accelerated basis if and to the extent: (i) such
         option is to be assumed by the successor corporation (or parent
         thereof) or is otherwise to continue in full force and effect pursuant
         to the terms of the Change in Control transaction or (ii) such option
         is to be replaced with a cash incentive program of the successor
         corporation which preserves the spread existing at the time of the
         Change in Control on any shares for which the option is not otherwise
         at that time exercisable and provides for subsequent payout of that
         spread in accordance with the same exercise/vesting schedule applicable
         to those option shares or (iii) the acceleration of such option is
         subject to other limitations imposed by the Plan Administrator at the
         time of the option grant.

                                       8
<PAGE>

                  B. All outstanding repurchase rights under the Discretionary
         Option Grant Program shall automatically terminate, and the shares of
         Common Stock subject to those terminated rights shall immediately vest
         in full, in the event of a Change in Control, except to the extent: (i)
         those repurchase rights are to be assigned to the successor corporation
         (or parent thereof) or are otherwise to continue in full force and
         effect pursuant to the terms of the Change in Control transaction or
         (ii) such accelerated vesting is precluded by other limitations imposed
         by the Plan Administrator at the time the repurchase right is issued.

                  C. Immediately following the consummation of the Change in
         Control, all outstanding options under the Discretionary Option Grant
         Program shall terminate and cease to be outstanding, except to the
         extent assumed by the successor corporation (or parent thereof) or
         otherwise continued in full force and effect pursuant to the terms of
         the Change in Control transaction.

                  D. Each option which is assumed in connection with a Change in
         Control or otherwise continued in effect shall be appropriately
         adjusted, immediately after such Change in Control, to apply to the
         number and class of securities which would have been issuable to the
         Optionee in consummation of such Change in Control had the option been
         exercised immediately prior to such Change in Control. Appropriate
         adjustments to reflect such Change in Control shall also be made to (i)
         the exercise price payable per share under each outstanding option,
         provided the aggregate exercise price payable for such securities shall
         remain the same, (ii) the maximum number and/or class of securities
         available for issuance over the remaining term of the Plan and (iii)
         the maximum number and/or class of securities for which any one person
         may be granted stock options and direct stock issuances under the Plan
         per calendar year. To the extent the actual holders of the
         Corporation's outstanding Common Stock receive cash consideration for
         their Common Stock in consummation of the Change in Control, the
         successor corporation may, in connection with the assumption of the
         outstanding options under the Discretionary Option Grant Program,
         substitute one or more shares of its own common stock with a fair
         market value equivalent to the cash consideration paid per share of
         Common Stock in such Change in Control transaction.

                  E. The Plan Administrator shall have the discretionary
         authority to structure one or more outstanding options under the
         Discretionary Option Grant Program so that those options shall,
         immediately prior to the effective date of a Change in Control, become
         exercisable for all the shares of Common Stock at the time subject to
         those options and may be exercised for any or all of those shares as
         fully vested shares of Common Stock, whether or not those options are
         to be assumed in the Change in Control transaction or otherwise
         continued in effect. In addition, the Plan Administrator shall have the
         discretionary authority to structure one or more of the Corporation's
         repurchase rights under the Discretionary Option Grant Program so that
         those rights shall immediately terminate upon the consummation of the
         Change in Control transaction, and the shares subject to those
         terminated rights shall thereupon vest in full.

                                       9
<PAGE>

                  F. The Plan Administrator shall have full power and authority
         to structure one or more outstanding options under the Discretionary
         Option Grant Program so that those options shall become exercisable for
         all the shares of Common Stock at the time subject to those options in
         the event the Optionee's Service is subsequently terminated by reason
         of an Involuntary Termination within a designated period (not to exceed
         eighteen (18) months) following the effective date of any Change in
         Control transaction in which those options do not otherwise accelerate.
         In addition, the Plan Administrator may structure one or more of the
         Corporation's repurchase rights so that those rights shall immediately
         terminate with respect to any shares held by the Optionee at the time
         of such Involuntary Termination, and the shares subject to those
         terminated repurchase rights shall accordingly vest in full at that
         time.

                  G. The Plan Administrator shall have the discretionary
         authority to structure one or more outstanding options under the
         Discretionary Option Grant Program so that those options shall,
         immediately prior to the effective date of a Hostile Take-Over, become
         exercisable for all the shares of Common Stock at the time subject to
         those options and may be exercised for any or all of those shares as
         fully vested shares of Common Stock. In addition, the Plan
         Administrator shall have the discretionary authority to structure one
         or more of the Corporation's repurchase rights under the Discretionary
         Option Grant Program so that those rights shall terminate automatically
         upon the consummation of such Hostile Take-Over, and the shares subject
         to those terminated rights shall thereupon vest in full. Alternatively,
         the Plan Administrator may condition the automatic acceleration of one
         or more outstanding options under the Discretionary Option Grant
         Program and the termination of one or more of the Corporation's
         outstanding repurchase rights under such program upon the subsequent
         termination of the Optionee's Service by reason of an Involuntary
         Termination within a designated period (not to exceed eighteen (18)
         months) following the effective date of such Hostile Take-Over.

                  H. The portion of any Incentive Option accelerated in
         connection with a Change in Control or Hostile Take-Over shall remain
         exercisable as an Incentive Option only to the extent the applicable
         One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To
         the extent such dollar limitation is exceeded, the accelerated portion
         of such option shall be exercisable as a Nonstatutory Option under the
         Federal tax laws. I. The outstanding options shall in no way affect the
         right of the Corporation to adjust, reclassify, reorganize or otherwise
         change its capital or business structure or to merge, consolidate,
         dissolve, liquidate or sell or transfer all or any part of its business
         or assets.

                                       10
<PAGE>

                                  ARTICLE THREE
                             STOCK ISSUANCE PROGRAM

         I.       STOCK ISSUANCE TERMS

         Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants. In
no event, however, may more than fifty percent (50%) of the total number of
shares of Common Stock from time to time authorized for issuance under the Plan
be issued pursuant to the Stock Issuance Program. Each stock issuance under the
program shall be evidenced by a Stock Issuance Agreement which complies with the
terms specified below. Shares of Common Stock may also be issued under the Stock
Issuance Program pursuant to share right awards which entitle the recipients to
receive those shares upon the attainment of designated performance goals or the
satisfaction of specified Service requirements.

                  A.       ISSUE PRICE.

                           1. The consideration per share at which shares of
                  Common Stock may be issued under the Stock Issuance Program
                  shall be fixed by the Plan Administrator, but shall not be
                  less than one hundred percent (100%) of the Fair Market Value
                  per share of Common Stock on the issuance date; provided,
                  however, the Corporation may issue Common Stock as a bonus to
                  any Participant without any cash consideration.

                           2. Shares of Common Stock may be issued under the
                  Stock Issuance Program for any of the following items of
                  consideration which the Plan Administrator may deem
                  appropriate in each individual instance: (i) cash or check
                  made payable to the Corporation, or (ii) past services
                  rendered to the Corporation (or any Parent or Subsidiary).

                  B.       VESTING PROVISIONS.

                           1. Shares of Common Stock issued under the Stock
                  Issuance Program may, in the discretion of the Plan
                  Administrator, be fully and immediately vested upon issuance
                  or may vest in one or more installments over the Participant's
                  period of Service or upon attainment of specified performance
                  objectives. The elements of the vesting schedule applicable to
                  any unvested shares of Common Stock issued under the Stock
                  Issuance Program shall be determined by the Plan Administrator
                  and incorporated into the Stock Issuance Agreement. Shares of
                  Common Stock may also be issued under the Stock Issuance
                  Program pursuant to share right awards which entitle the
                  recipients to receive those shares upon the attainment of
                  designated performance goals or the satisfaction of specified
                  Service requirements.

                           2. For any Common Stock issuance which is to vest
                  solely on the basis of Service, a minimum period of three (3)
                  years of Service shall be required as condition to such
                  vesting. The required Service period shall be measured from
                  the issue date of the shares in the event of a direct issuance
                  or from the grant date of the share right award for any shares
                  to be subsequently issued pursuant to such award. However, any
                  such Common Stock issuance shall be subject to the vesting
                  acceleration provisions of this Article Three.

                                       11
<PAGE>

                           3. The Plan Administrator shall also have the
                  discretionary authority, consistent with Code Section 162(m),
                  to structure one or more share right awards so that the shares
                  of Common Stock subject to those awards shall be issuable upon
                  the achievement of certain pre-established corporate
                  performance goals based on one or more of the following
                  criteria: (1) return on total stockholder equity; (2) earnings
                  per share of Common Stock; (3) net income (before or after
                  taxes); (4) earnings before interest, taxes, depreciation and
                  amortization; (5) sales or revenues; (6) growth in assets (net
                  or gross); (7) return on assets, capital or investment; (8)
                  market share; (9) budget comparisons; (10) implementation or
                  completion of critical projects or processes; (11) customer
                  satisfaction; (12) any combination of, or a specified increase
                  in, any of the foregoing; and (13) the formation of joint
                  ventures or the completion of other corporate transactions. In
                  addition, such performance goals may be based upon the
                  attainment of specified levels of the Corporation's
                  performance under one or more of the measures described above
                  relative to the performance of other entities and may also be
                  based on the performance of any of the Corporation's business
                  units or divisions or any Parent or Subsidiary. Performance
                  goals may include a minimum threshold level of performance
                  below which no award will be earned, levels of performance at
                  which specified portions of an award will be earned and a
                  maximum level of performance at which an award will be fully
                  earned.

                           4. Any new, substituted or additional securities or
                  other property (including money paid other than as a regular
                  cash dividend) which the Participant may have the right to
                  receive with respect to the Participant's unvested shares of
                  Common Stock by reason of any stock dividend, stock split,
                  recapitalization, combination of shares, exchange of shares or
                  other change affecting the outstanding Common Stock as a class
                  without the Corporation's receipt of consideration shall be
                  issued subject to (i) the same vesting requirements applicable
                  to the Participant's unvested shares of Common Stock and (ii)
                  such escrow arrangements as the Plan Administrator shall deem
                  appropriate.

                           5. The Participant shall have full stockholder rights
                  with respect to any shares of Common Stock issued to the
                  Participant under the Stock Issuance Program, whether or not
                  the Participant's interest in those shares is vested.
                  Accordingly, the Participant shall have the right to vote such
                  shares and to receive any regular cash dividends paid on such
                  shares.

                           6. Should the Participant cease to remain in Service
                  while holding one or more unvested shares of Common Stock
                  issued under the Stock Issuance Program or should the
                  performance objectives not be attained with respect to one or
                  more such unvested shares of Common Stock, then those shares
                  shall be immediately surrendered to the Corporation for
                  cancellation, and the Participant shall have no further
                  stockholder rights with respect to those shares. To the extent
                  the surrendered shares were previously issued to the

                                       12
<PAGE>

                  Participant for consideration paid in cash or cash equivalent
                  (including the Participant's purchase-money indebtedness), the
                  Corporation shall repay to the Participant the LOWER of (i)
                  the cash consideration paid for the surrendered shares or (ii)
                  the Fair Market Value of those shares at the time of
                  cancellation and shall cancel the unpaid principal balance of
                  any outstanding purchase-money note of the Participant
                  attributable to the surrendered shares by the applicable
                  clause (i) or (ii) amount.

                           7. The Plan Administrator may in its discretion waive
                  the surrender and cancellation of one or more unvested shares
                  of Common Stock which would otherwise occur upon the cessation
                  of the Participant's Service or the non-attainment of the
                  performance objectives applicable to those shares, to the
                  extent the Plan Administrator deems such waiver to be an
                  appropriate severance benefit under the circumstances. Such
                  waiver shall result in the immediate vesting of the
                  Participant's interest in the shares of Common Stock as to
                  which the waiver applies.

                           8. Outstanding share right awards under the Stock
                  Issuance Program shall automatically terminate, and no shares
                  of Common Stock shall actually be issued in satisfaction of
                  those awards, if the performance goals or Service requirements
                  established for such awards are not attained or satisfied. The
                  Plan Administrator, however, shall have the discretionary
                  authority to issue shares of Common Stock under one or more
                  outstanding share right awards as to which the designated
                  performance goals or Service requirements have not been
                  attained or satisfied, to the extent the Plan Administrator
                  deems such issuance to be an appropriate severance benefit
                  under the circumstances.

         II.      CHANGE IN CONTROL/HOSTILE TAKE-OVER

                  A. All of the Corporation's outstanding repurchase rights
         under the Stock Issuance Program shall terminate automatically, and all
         the shares of Common Stock subject to those terminated rights shall
         immediately vest in full, in the event of any Change in Control, except
         to the extent (i) those repurchase rights are to be assigned to the
         successor corporation (or parent thereof) or are otherwise to continue
         in full force and effect pursuant to the terms of the Change in Control
         transaction or (ii) such accelerated vesting is precluded by other
         limitations imposed in the Stock Issuance Agreement.

                  B. The Plan Administrator shall have the discretionary
         authority to structure one or more of the Corporation's repurchase
         rights under the Stock Issuance Program so that those rights shall
         automatically terminate in whole or in part, and the shares of Common
         Stock subject to those terminated rights shall vest, either immediately
         upon the effective date of a Change in Control or subsequently upon an
         Involuntary Termination of the Participant's Service within a
         designated period (not to exceed eighteen (18) months) following the
         effective date of any Change in Control transaction in which those
         repurchase rights are assigned to the successor corporation (or parent
         thereof) or are otherwise continued in effect.

                                       13
<PAGE>

                  C. The Plan Administrator shall also have the discretionary
         authority to structure one or more of the Corporation's repurchase
         rights under the Stock Issuance Program so that those rights shall
         automatically terminate in whole or in part, and the shares of Common
         Stock subject to those terminated rights shall immediately vest, either
         upon the occurrence of a Hostile Take-Over or upon the subsequent
         termination of the Participant's Service by reason of an Involuntary
         Termination within a designated period (not to exceed eighteen (18)
         months) following the effective date of that Hostile Take-Over.

         III.     SHARE ESCROW/LEGENDS

         Unvested shares may, in the Plan Administrator's discretion, be held in
escrow by the Corporation until the Participant's interest in such shares vests
or may be issued directly to the Participant with restrictive legends on the
certificates evidencing those unvested shares.

                                  ARTICLE FOUR
                                  MISCELLANEOUS

         I.       TAX WITHHOLDING

                  A. The Corporation's obligation to deliver shares of Common
         Stock upon the exercise of options or the issuance or vesting of such
         shares under the Plan shall be subject to the satisfaction of all
         applicable income and employment tax withholding requirements. The
         Corporation shall also make appropriate arrangements for the
         satisfaction by participants of all applicable foreign tax withholding
         requirements which may be imposed in connection with the grant, vesting
         or exercise of options under the Plan or other taxable event or the
         issuance or vesting of shares of Common Stock under the Plan.

                  B. The Plan Administrator may, in its discretion, provide any
         or all Optionees or Participants under the Plan with the right to use
         shares of Common Stock in satisfaction of all or part of the
         Withholding Taxes to which such individuals may become subject in
         connection with the grant or exercise of their options or the issuance
         or vesting of their shares. Such right may be provided to any such
         holder in either or both of the following formats: Stock Withholding:
         The election to have the Corporation withhold, from the shares of
         Common Stock otherwise issuable upon the exercise of options or the
         issuance or the vesting of such shares, a portion of those shares with
         an aggregate Fair Market Value equal to the percentage of the
         Withholding Taxes (not to exceed one hundred percent (100%)) designated
         by the holder. Stock Delivery: The election to deliver to the
         Corporation, at the time the option is granted or exercised or the
         shares are issued or vest, one or more shares of Common Stock
         previously acquired by such holder (other than in connection with the
         option exercise or share vesting triggering the Withholding Taxes) with
         an aggregate Fair Market Value equal to the percentage of the
         Withholding Taxes (not to exceed one hundred percent (100%)) designated
         by the holder.

                                       14
<PAGE>

         II.      EFFECTIVE DATE AND TERM OF THE PLAN

                  A. The Plan shall become effective immediately on the Plan
         Effective Date.

                  B. The Plan shall terminate upon the earliest to occur of (i)
         August 16, 2013, (ii) the date on which all shares available for
         issuance under the Plan shall have been issued as fully vested shares
         or (iii) the termination of all outstanding options in connection with
         a Change in Control. Should the Plan terminate on August 16, 2013, then
         all option grants and unvested stock issuances outstanding at that time
         shall continue to have force and effect in accordance with the
         provisions of the documents evidencing such grants or issuances.

         III.     AMENDMENT OF THE PLAN

                  A. The Board shall have complete and exclusive power and
         authority to amend or modify the Plan in any or all respects. However,
         no such amendment or modification shall adversely affect the rights and
         obligations with respect to stock options or unvested stock issuances
         at the time outstanding under the Plan unless the Optionee or the
         Participant consents to such amendment or modification. In addition,
         stockholder approval shall be required for any amendment which (i)
         increases the number of shares of Common Stock reserved for issuance
         under the Plan, (ii) materially modifies the eligibility requirements
         for participation in the Plan or (iii) materially increases the
         benefits accruing to Optionees or Participants under the Plan.

         IV.      USE OF PROCEEDS

                  Any cash proceeds received by the Corporation from the sale of
         shares of Common Stock under the Plan shall be used for general
         corporate purposes.

         V.       REGULATORY APPROVALS

                  A. The implementation of the Plan, the granting of any stock
         option under the Plan and the issuance of any shares of Common Stock
         (i) upon the exercise of any granted option or (ii) under the Stock
         Issuance Program shall be subject to the Corporation's procurement of
         all approvals and permits required by regulatory authorities having
         jurisdiction over the Plan, the stock options granted under it and the
         shares of Common Stock issued pursuant to it.

                  B. No shares of Common Stock or other assets shall be issued
         or delivered under the Plan unless and until there shall have been
         compliance with all applicable requirements of applicable securities
         laws, including the filing and effectiveness of the Form S-8
         registration statement for the shares of Common Stock issuable under
         the Plan, and all applicable listing requirements of any stock exchange
         (or the Nasdaq National Market, if applicable) on which Common Stock is
         then listed for trading.

         VI.      NO EMPLOYMENT/SERVICE RIGHTS

         Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.

                                       15
<PAGE>

                                    APPENDIX

         The following definitions shall be in effect under the Plan:

         A.       BOARD shall mean the Corporation's Board of Directors.

         B.       CHANGE IN CONTROL shall mean a change in ownership or control
                  of the Corporation effected through any of the following
                  transactions: (i) a merger, consolidation or other
                  reorganization approved by the Corporation's stockholders,
                  unless securities representing more than fifty percent (50%)
                  of the total combined voting power of the voting securities of
                  the successor corporation are immediately thereafter
                  beneficially owned, directly or indirectly and in
                  substantially the same proportion, by the persons who
                  beneficially owned the Corporation's outstanding voting
                  securities immediately prior to such transaction, or (ii) the
                  sale, transfer or other disposition of all or substantially
                  all of the Corporation's assets in complete liquidation or
                  dissolution of the Corporation, or (iii) any transaction or
                  series of related transactions pursuant to which any person or
                  any group of persons comprising a "group" within the meaning
                  of Rule 13d-5(b)(1) under the 1934 Act (other than the
                  Corporation or a person that, prior to such transaction or
                  series of related transactions, directly or indirectly
                  controls, is controlled by or is under common control with,
                  the Corporation) becomes directly or indirectly the beneficial
                  owner (within the meaning of Rule 13d-3 under the 1934 Act) of
                  securities possessing (or convertible into or exercisable for
                  securities possessing) more than fifty percent (50%) of the
                  total combined voting power of the Corporation's securities
                  outstanding immediately after the consummation of such
                  transaction or series of related transactions, whether such
                  transaction involves a direct issuance from the Corporation or
                  the acquisition of outstanding securities held by one or more
                  of the Corporation's stockholders.

         C.       CODE shall mean the Internal Revenue Code of 1986, as amended.

         D.       COMMON STOCK shall mean the Corporation's common stock.

         E.       CORPORATION shall mean Secured Diversified Investment, Ltd., a
                  Nevada corporation, and any corporate successor to all or
                  substantially all of the assets or voting stock of Secured
                  Diversified Investment, Ltd. which shall by appropriate action
                  adopt the Plan.

         F.       DISCRETIONARY OPTION GRANT PROGRAM shall mean the
                  discretionary option grant program in effect under Article Two
                  of the Plan.

         G.       EMPLOYEE shall mean an individual who is in the employ of the
                  Corporation (or any Parent or Subsidiary), subject to the
                  control and direction of the employer entity as to both the
                  work to be performed and the manner and method of performance.

         H.       EXERCISE DATE shall mean the date on which the Corporation
                  shall have received written notice of the option exercise.

                                       1
<PAGE>

         I.       FAIR MARKET VALUE per share of Common Stock on any relevant
                  date shall be determined in accordance with the following
                  provisions: (i) If the Common Stock is at the time traded on
                  the Nasdaq National Market, then the Fair Market Value shall
                  be the closing selling price per share of Common Stock on the
                  date in question, as such price is reported by the National
                  Association of Securities Dealers on the Nasdaq National
                  Market and published in THE WALL STREET JOURNAL. If there is
                  no closing selling price for the Common Stock on the date in
                  question, then the Fair Market Value shall be the closing
                  selling price on the last preceding date for which such
                  quotation exists. (ii) If the Common Stock is at the time
                  listed on any Stock Exchange, then the Fair Market Value shall
                  be the closing selling sale price per share of Common Stock on
                  the date in question on the Stock Exchange determined by the
                  Plan Administrator to be the primary market for the Common
                  Stock, as such price is officially quoted in the composite
                  tape of transactions on such exchange and published in THE
                  WALL STREET JOURNAL. If there is no closing selling price for
                  the Common Stock on the date in question, then the Fair Market
                  Value shall be the closing selling price on the last preceding
                  date for which such quotation exists.

         J.       HOSTILE TAKE-OVER shall mean a change in ownership or control
                  of the Corporation effected through either of the following
                  transactions: (i) a change in the composition of the Board
                  over a period of thirty-six (36) consecutive months or less
                  such that a majority of the Board members ceases, by reason of
                  one or more contested elections for Board membership, to be
                  comprised of individuals who either (A) have been Board
                  members continuously since the beginning of such period or (B)
                  have been elected or nominated for election as Board members
                  during such period by at least a majority of the Board members
                  described in clause (A) who were still in office at the time
                  the Board approved such election or nomination, or (ii) the
                  acquisition, directly or indirectly, by any person or related
                  group of persons (other than the Corporation or a person that
                  directly or indirectly controls, is controlled by, or is under
                  common control with, the Corporation) of beneficial ownership
                  (within the meaning of Rule 13d-3 of the 1934 Act) of
                  securities possessing more than thirty percent (30%) of the
                  total combined voting power of the Corporation's outstanding
                  securities pursuant to a tender or exchange offer made
                  directly to the Corporation's stockholders which the Board
                  does not recommend such stockholders to accept.

         K.       INCENTIVE OPTION shall mean an option which satisfies the
                  requirements of Code Section 422.

         L.       INVOLUNTARY TERMINATION shall mean the termination of the
                  Service of any individual which occurs by reason of: (i) such
                  individual's involuntary dismissal or discharge by the
                  Corporation for reasons other than Misconduct, or (ii) such
                  individual's voluntary resignation following (A) a change in
                  his or her position with the Corporation which materially
                  reduces his or her duties and responsibilities or the level of
                  management to which he or she reports, (B) a reduction in his
                  or her aggregate level of base salary and target bonus under
                  any corporate-performance based bonus or incentive program by

                                       2
<PAGE>

                  more than fifteen percent (15%) or (C) a relocation of such
                  individual's place of employment by more than fifty (50)
                  miles, provided and only if such change, reduction or
                  relocation is effected by the Corporation without the
                  individual's consent.

         M.       MISCONDUCT shall mean the commission of any act of fraud,
                  embezzlement or dishonesty by the Optionee or Participant, any
                  intentional unauthorized use or disclosure by such person of
                  confidential information or trade secrets of the Corporation
                  (or any Parent or Subsidiary), or any other intentional
                  misconduct by such person adversely affecting the business or
                  affairs of the Corporation (or any Parent or Subsidiary) in a
                  material manner. The foregoing definition shall not in any way
                  preclude or restrict the right of the Corporation (or any
                  Parent or Subsidiary) to discharge or dismiss any Optionee,
                  Participant or other person in the Service of the Corporation
                  (or any Parent or Subsidiary) for any other acts or omissions,
                  but such other acts or omissions shall not be deemed, for
                  purposes of the Plan, to constitute grounds for termination
                  for Misconduct.

         N.       1934 ACT shall mean the Securities Exchange Act of 1934, as
                  amended.

         O.       NON-STATUTORY OPTION shall mean an option not intended to
                  satisfy the requirements of Code Section 422. P. OPTIONEE
                  shall mean any person to whom an option is granted under the
                  Discretionary Option Grant Program.

         Q.       PARENT shall mean any corporation (other than the Corporation)
                  in an unbroken chain of corporations ending with the
                  Corporation, provided each corporation in the unbroken chain
                  (other than the Corporation) owns, at the time of the
                  determination, stock possessing fifty percent (50%) or more of
                  the total combined voting power of all classes of stock in one
                  of the other corporations in such chain.

         R.       PARTICIPANT shall mean any person who is issued shares of
                  Common Stock under the Stock Issuance Program.

         S.       PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
                  inability of the Optionee or the Participant to engage in any
                  substantial gainful activity by reason of any medically
                  determinable physical or mental impairment expected to result
                  in death or to be of continuous duration of twelve (12) months
                  or more.

         T.       PLAN shall mean the Corporation's 2003 Stock Incentive Plan,
                  as set forth in this document.

         U.       PLAN ADMINISTRATOR shall mean the particular entity, whether
                  the Primary Committee, the Secondary Committee or the Board,
                  which is authorized to administer the Discretionary Option
                  Grant and Stock Issuance Programs with respect to one or more
                  classes of eligible persons, to the extent such entity is
                  carrying out its administrative functions under those programs
                  with respect to the persons under its jurisdiction.

                                       3
<PAGE>

         V.       PLAN EFFECTIVE DATE shall mean the date the Plan becomes
                  effective and shall be coincidental with the date the Plan is
                  approved by the Corporation's stockholders. The Plan Effective
                  Date shall accordingly be the date of the 2003 Annual
                  Stockholders Meeting, provided the stockholders approve the
                  Plan at such meeting.

         W.       PRIMARY COMMITTEE shall mean the committee of two (2) or more
                  non-employee Board members appointed by the Board to
                  administer the Discretionary Option Grant and Stock Issuance
                  Programs with respect to Section 16 Insiders.

         X.       SECONDARY COMMITTEE shall mean a committee of one or more
                  Board members appointed by the Board to administer the
                  Discretionary Option Grant and Stock Issuance Programs with
                  respect to eligible persons other than Section 16 Insiders.

         Y.       SECTION 16 INSIDER shall mean an officer or director of the
                  Corporation subject to the short-swing profit liabilities of
                  Section 16 of the 1934 Act.

         Z.       SERVICE shall mean the performance of services for the
                  Corporation (or any Parent or Subsidiary) by a person in the
                  capacity of an Employee, a non-employee member of the board of
                  directors or a consultant or independent advisor, except to
                  the extent otherwise specifically provided in the documents
                  evidencing the option grant or stock issuance. Service shall
                  not be deemed to cease during a period of military leave, sick
                  leave or other personal leave approved by the Corporation;
                  provided, however, that for a leave which exceeds ninety (90)
                  days, Service shall be deemed, for purposes of determining the
                  period within which any outstanding option held by the
                  Optionee in question may be exercised as an Incentive Option,
                  to cease on the ninety-first (91st) day of such leave, unless
                  the right of that Optionee to return to Service following such
                  leave is guaranteed by law or statute. Except to the extent
                  otherwise required by law or expressly authorized by the Plan
                  Administrator, no Service credit shall be given for vesting
                  purposes for any period the Optionee or Participant is on a
                  leave of absence.

         AA.      STOCK EXCHANGE shall mean either the American Stock Exchange
                  or the New York Stock Exchange.

         BB.      STOCK ISSUANCE AGREEMENT shall mean the agreement entered into
                  by the Corporation and the Participant at the time of issuance
                  of shares of Common Stock under the Stock Issuance Program.

         CC.      STOCK ISSUANCE PROGRAM shall mean the stock issuance program
                  in effect under Article Four of the Plan.

         DD.      SUBSIDIARY shall mean any corporation (other than the
                  Corporation) in an unbroken chain of corporations beginning
                  with the Corporation, provided each corporation (other than
                  the last corporation) in the unbroken chain owns, at the time
                  of the determination, stock possessing fifty percent (50%) or
                  more of the total combined voting power of all classes of
                  stock in one of the other corporations in such chain.

                                       4
<PAGE>

         EE.      10% STOCKHOLDER shall mean the owner of stock (as determined
                  under Code Section 424(d)) possessing more than ten percent
                  (10%) of the total combined voting power of all classes of
                  stock of the Corporation (or any Parent or Subsidiary).

         FF.      WITHHOLDING TAXES shall mean the applicable income and
                  employment withholding taxes to which the holder of an option
                  or shares of Common Stock under the Plan may become subject in
                  connection with the grant, vesting or exercise of those
                  options or other taxable event or the issuance or vesting of
                  those shares.

                                       5

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