Document:

DATED: The 28th day of August, 1999

SPACEDEV

and

                              TECHNICAL & GENERAL
                           GUARANTEE COMPANY LIMITED

                           ---------------------------

                      DEED OF COUNTER INDEMNITY 99/TG1246P

                           ---------------------------

<PAGE>

                           DEED OF COUNTER INDEMNITY
                           -------------------------

DATE:          The 25th day of August, 1999.
-----

PARTIES:
--------

(1)      SPACEDEV whose registered office is situated at 13855 Stowe Drive,
         Poway, California 92064 USA ("the Company")

(2)      TECHNICAL & GENERAL GUARANTEE COMPANY LIMITED of 26 Boulevard Royal,
         L-2449 Luxembourg ("the Guarantor")

OPERATIVE PROVISIONS:
---------------------

1.       DEFINITIONS AND INTERPRETATION
         ------------------------------

         In this Deed the following provisions of this Clause shall govern
         interpretation.

         1.1      "Performance Bond" means any and every contract performance
                  bond, guarantee or agreement granted or to be granted by the
                  Guarantor to any Third Party in connection with all or any of
                  the obligations of SPACE INNOVATIONS LIMITED, a subsidiary
                  company of the Company ("the Subsidiary") to any Third Party
                  to provide Performance Bonds to any Third Party.

                  "Performance Bond Fee" means such fee as shall be agreed
                  between the Guarantor and the Subsidiary by way of
                  consideration for the grant by the Guarantor of each
                  Performance Bond.

                  "Third Party" means the beneficiary under the Performance
                  Bond.

         1.2      Unless the context otherwise requires, words denoting the
                  singular shall include the plural and vice versa; words
                  denoting any one gender shall include all genders; and words
                  denoting personal shall include bodies corporate,
                  unincorporated associations and partnerships.

         1.3      Headings to clauses are included for ease of reference only
                  and shall not affect the construction of this Deed or the
                  Schedules hereto.

PERFORMANCE BOND AND COUNTER-INDEMNITY
--------------------------------------

         2.1      (a)      The Subsidiary shall pay the Performance Bond fee to
                           the Guarantor in consideration of the grant of each
                           Performance Bond to each Third Party.

<PAGE>

                  (b)      The Performance Bond shall be in such form and shall
                           contain such terms and provisions as the Guarantor
                           and the Third Party may from time to time agree. The
                           guarantor and the Third Party may vary the terms and
                           conditions of the Performance Bond in such manner as
                           the Third Party and the Guarantor may in their
                           absolute discretion determine provided always that
                           any such variation shall not be to the detriment of
                           the Subsidiary.

                  (c)      By way of consideration for the Company's obligations
                           hereunder the Company acknowledges the receipt of One
                           pound (pound)1.00 from the Guarantor.

         2.2      In consideration of the Guarantor granting the Performance
                  Bond to the Third Party the Company hereby undertakes:

                  (a)      to save and keep the Guarantor harmless and
                           indemnified against all actions proceedings losses
                           costs damages expenses claims and demands which the
                           Guarantor may incur or sustain by reason of or
                           arising in any way whatsoever in connection with the
                           Performance Bond and/or this Deed and to place the
                           Guarantor in cleared funds on demand sufficient in
                           amount to cover the Subsidiary's total actual and
                           contingent liability under or arising out of the
                           Performance Bond and/or this Deed.

                  (b)      to save and keep the Guarantor harmless and
                           indemnified against all actions proceedings losses
                           costs damages expenses claims and demands in
                           connection with the enforcement or attempted
                           enforcement of this Deed.

                  (c)      to pay on demand interest to the Guarantor on all
                           sums due and payable hereunder from the time each
                           such sum became due and until payment in full.
                           Interest shall be payable (as well after as before
                           judgment) at the rate of 5% per annum over Lloyds
                           Bank Plc base rate from time to time. Interest will
                           accrue from day to day and be calculated on the basis
                           of the actual numbers of days elapsed and a 365-day
                           year. Interest will be compounded monthly.

         2.3      The Company hereby irrevocably authorises the Guarantor to
                  make any payments and comply with any demands which may be
                  claimed in accordance with the terms of the Performance Bond
                  from or made upon the Guarantor in connection with the
                  Performance Bond without any reference to or further authority
                  from the Company and the Company hereby agrees that it shall
                  not be incumbent upon the Guarantor to enquire or to take
                  notice whether or not any dispute exists between the
                  Subsidiary and the Third Party and the Company further agrees
                  that any payment which the Guarantor shall make in accordance
                  with or apparently or purporting to be in accordance with or
                  which the Guarantor believes is in

                                  page 2 of 6
<PAGE>

                  accordance with the Performance Bond shall be binding upon the
                  Company and shall be accepted by the Company as conclusive
                  evidence that the Guarantor is liable to make such payments or
                  comply with such demand and further that the Guarantor may at
                  any time vary or determine the Performance Bond or make any
                  compromise or arrangement with the Third Party and in
                  particular without limitation take any action or make any
                  omission with respect to the Performance Bond that the
                  Guarantor may in the Guarantor's absolute discretion think
                  fit.

         2.4      It shall not be a defense to a claim by the Guarantor against
                  the Company under this Deed that the Subsidiary could have
                  resisted any claim by the Third Party under or pursuant to the
                  Performance Bond. The Company requests and authorises the
                  Guarantor to make payments to the Third Party on demand by the
                  Third Party pursuant to the Performance Bond in the amount and
                  in the manner thereby required.

         2.5      A certificate submitted by the Guarantor as to any amounts or
                  amounts due or to become due from the Company to the Guarantor
                  in connection with this Deed shall be conclusive and binding
                  on the Company.

         2.6      The Company hereby waives any and all existing and future
                  counter-claims and set-offs against any payments due to the
                  Guarantor hereunder and agrees to make all such payments in
                  full irrespective of any equity or set-off or counter-claim of
                  the Company against the Guarantor.

         2.7      The Company's obligations hereunder shall not be in any way
                  discharged or impaired by reason of any time or other
                  indulgence granted to the Subsidiary by the Third Party or any
                  other person or by any variation or determination of the
                  Performance Bond or any related insurance policy agreement or
                  arrangement or of the operations thereunder and shall exist
                  irrespective of any present or future total or partial
                  invalidity illegality or unenforceability of the Performance
                  Bond.

         2.8      All payments to be made by the Company hereunder shall be made
                  without deduction or withholding unless (i) the Company is
                  required by law to make any deduction or withholding from any
                  sum due from the Company to the Guarantor hereunder or (ii)
                  the Guarantor is required by law to make any payment on or in
                  relation to any amount received or receivable by the Guarantor
                  hereunder on account of tax (other than tax on the
                  Guarantor's overall net income) or otherwise. In such
                  circumstances as are mentioned in (i) and (ii) above the sum
                  due from the Company to the Guarantor in respect of which such
                  deduction withholding or payment is required to be made shall
                  be increased to the extent necessary to ensure that after the
                  making of such deduction withholding or payment the Guarantor
                  receives remains in possession of and is beneficially entitled
                  to free from any such deduction withholding or payment as is
                  mentioned above a net sum equal to the sum which the Guarantor
                  would have received and to which the

                                  Page 3 of 6

<PAGE>
                  Guarantor would have been so entitled had no such deduction
                  withholding or payment been made.

         2.9      This Deed shall remain in full force and effect until the
                  Guarantor confirms to the Company that the Company is released
                  from further obligations under this Deed.

NOTICES
-------

         3.1      The Company and each of its officers and directors undertake
                  to notify the Guarantor immediately of any notice served by
                  the Company or on the Company pursuant to or in respect of the
                  Insolvency Act. Failure to provide such notification will
                  render the directors and officers of the Company personally
                  liable for any debts arising under this Deed.

         3.2      Every notice which is required to be given hereunder shall be
                  in writing and shall be delivered personally or sent by first
                  class prepaid post telex or facsimile transmission to:

                  3.2.1    the address of the recipient set out herein or to
                           such other address as shall from time to time have
                           been notified to the sender in accordance with the
                           provisions of this Clause; or

                  3.2.2    the registered office for the time being of the
                           recipient.

         3.3      Every such notice shall be marked in the case of the Guarantor
                  for the attention of the Company Secretary and in the case of
                  the Company for the attention of the Company Secretary.

         3.4      Such notice shall be deemed to have been served:

                  3.4.1    if delivered personally when delivered;

                  3.4.2    if sent by first class post before the last scheduled
                           collection of letters from the place of posting on
                           any day, at 10:00 a.m. on the second business day
                           following posting (notwithstanding that it may
                           subsequently be returned undelivered); and

                  3.4.3    if sent by telex or facsimile transmission during
                           normal business hours when sent, or if outside normal
                           business hours, at 10:00 a.m. on the next business
                           day.

                                  Page 4 of 6

<PAGE>

4.       SUCCESSORS
         ----------

         This Deed shall be binding on and shall enure for the benefit of the
         successors and assigns of each of the parties hereto.

5.       FURTHER ASSURANCE
         -----------------

         The Company shall (and shall use all reasonable endeavours to procure
         that any necessary third party shall) promptly do execute and perform
         at the Company's expense all such further deeds documents assurances
         acts and things as the Guarantor may reasonably require by notice in
         writing to the Company in order to carry the provisions of this Deed
         into full force and effect.

6.       TIME OF THE ESSENCE
         -------------------

         Save that any date period or time limit mentioned in this Deed may be
         extended or abridged by written agreement between the parties hereto
         time shall be of the essence of this Deed.

7.       VARIATION
         ---------

         No variation or waiver of any of the provisions of this Deed shall be
         valid or effective unless made in writing and signed by both parties
         hereto.

8.       WAIVER; REMEDIES CUMULATIVE
         ---------------------------

         No failure on the part of either party hereto to exercise and no delay
         by either party in exercising any right power privilege or remedy under
         this Deed shall operate as a waiver thereof nor shall any single or
         partial exercise of any right power privilege or remedy preclude any
         other or further exercise thereof or the exercise of any other right
         power privilege or remedy. The rights and remedies provided in this
         Deed are cumulative and are not exclusive of any other rights or
         remedies otherwise available to a party at law or in equity.

9.       SEVERABILITY
         ------------

         Each of the provisions of this Deed is severable and distinct from the
         others and notwithstanding that at any time one or more of such
         provisions is or becomes or proves to be invalid illegal or
         unenforceable the validity legality and enforceability of the remaining
         provisions hereof shall not in any way be affected or impaired thereby.

10.      GOVERNING LAW
         -------------

         This Deed shall be governed by and construed in accordance with the
         laws of England.

                                  Page 5 of 6

<PAGE>

11.      JURISDICTION
         ------------

         11.1     Each party hereto submits to the non-exclusive jurisdiction of
                  the Courts of England.

         11.2     This Company hereby agrees that any legal action or proceeding
                  arising out of or in connection with this document may be
                  brought in the High Court of Justice in England and the
                  Company irrevocably submits to the non-exclusive jurisdiction
                  of such courts.

EXECUTED and DELIVERED as a Deed the 25 day of August, 1999.

THE COMMON SEAL of                           )          [Spacedev seal here]
SPACEDEV                                     )
was hereunto affixed in the presence of.     )

               /s/ Jim Benson
               --------------------------
               Director

               /s/ Susan Benson
               --------------------------
               Director/Secretary

THE COMMON SEAL of                           )          [Technical seal here]
TECHNICAL & GENERAL                          )
GUARANTEE COMPANY LIMITED                    )
was hereunto affixed in the presence of      )

               /s/ signature
               --------------------------
               Authorised Signatory

               /s/ signature
               --------------------------
               Witness

                                  Page 6 of 6<PAGE>

                                                                    EXHIBIT 10.4

                         X10 WIRELESS TECHNOLOGY, INC.

                          2000 EQUITY INCENTIVE PLAN

                             ADOPTED July 27, 2000
                APPROVED BY STOCKHOLDERS _______________, 200__
                       TERMINATION DATE:  July 26, 2010

1.  PURPOSES.

    (a)  ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive Stock
awards are the Employees, Directors and Consultants of the Company and its
Affiliates.

    (b)  AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide a means
by which eligible recipients of Stock Awards may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of the
following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.

    (c)  GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain the
services of the group of persons eligible to receive Stock Awards, to secure and
retain the services of new members of this group and to provide incentives for
such persons to exert maximum efforts for the success of the Company and its
Affiliates.

2.  DEFINITIONS.

    (a)  "AFFILIATE" means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.

    (b)  "BOARD" means the Board of Directors of the Company.

    (c)  "CODE" means the Internal Revenue Code of 1986, as amended.

    (d)  "COMMITTEE" means a committee of one or more members of the Board
appointed by the Board in accordance with subsection 3(c).

    (e)  "COMMON STOCK" means the common stock of the Company.

    (f)  "COMPANY" means X10 Wireless Technology, Inc., a Delaware corporation.

    (g)  "CONSULTANT" means any person, including an advisor, (i) engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or (ii) who is a member of the Board of Directors
of an Affiliate. However, the

                                       1.
<PAGE>

term "Consultant" shall not include either Directors who are not compensated by
the Company for their services as Directors or Directors who are merely paid a
director's fee by the Company for their services as Directors.

    (h)  "CONTINUOUS SERVICE" means that the Participant's service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. The Participant's Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.

    (i)  "COVERED EMPLOYEE" means the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required to be reported to stockholders under the Exchange Act, as determined
for purposes of Section 162(m) of the Code.

    (j)  "DIRECTOR" means a member of the Board of Directors of the Company.

    (k)  "DISABILITY" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

    (l)  "EMPLOYEE" means any person employed by the Company or an Affiliate.
Mere service as a Director or payment of a director's fee by the Company or an
Affiliate shall not be sufficient to constitute "employment" by the Company or
an Affiliate.

    (m)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

    (n)  "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock determined as follows:

         (i)   If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable.

         (ii)  In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.

                                       2.
<PAGE>

    (o)  "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

    (p)  "IPO DATE" means the effective date of the Company's registration
statement under the Securities Act with respect to the initial offering of
shares of the Company's Common Stock.

    (q)  "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

    (r)  "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as
an Incentive Stock Option.

    (s)  "OFFICER" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

    (t)  "OPTION" means an Incentive Stock Option or a Nonstatutory Stock Option
granted pursuant to the Plan.

    (u)  "OPTION AGREEMENT" means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.

    (v)  "OPTIONHOLDER" means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.

    (w)  "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.

    (x)  "PARTICIPANT" means a person to whom a Stock Award is granted pursuant
to Plan or, if applicable, such other person who holds an outstanding Stock
Award.

    (y)  "PLAN" means this X10 Wireless Technology, Inc. 2000 Equity Incentive
Plan.

                                       3.
<PAGE>

    (z)  "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

    (aa) "SECURITIES ACT" means the Securities Act of 1933, as amended.

    (bb) "STOCK AWARD" means any right granted under the Plan, including an
Option, a stock bonus and a right to acquire restricted stock.

    (cc) "STOCK AWARD AGREEMENT" means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

    (dd) "TEN PERCENT STOCKHOLDER" means a person who owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of any of its Affiliates.

3.  ADMINISTRATION.

    (a)  ADMINISTRATION BY BOARD. The Board shall administer the Plan unless and
until the Board delegates administration to a Committee, as provided in
subsection 3(c).

    (b)  POWERS OF BOARD. The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:

         (i)   To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; what type or combination of types of Stock Award shall be
granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.

         (ii)  To construe and interpret the Plan and Stock Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

         (iii) To amend the Plan or a Stock Award as provided in Section 12.

         (iv)  Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.

    (c)  DELEGATION TO COMMITTEE.

         (i)   GENERAL. The Board may delegate administration of the Plan to a
Committee or Committees of one (1) or more members of the Board, and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated. If

                                       4.
<PAGE>

administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

         (ii)  COMMITTEE COMPOSITION WHEN COMMON STOCK IS PUBLICLY TRADED. At
such time as the Common Stock is publicly traded, in the discretion of the
Board, a Committee may consist solely of two or more Outside Directors, in
accordance with Section 162(m) of the Code, and/or solely of two or more Non-
Employee Directors, in accordance with Rule 16b-3. Within the scope of such
authority, the Board or the Committee may (1) delegate to a committee of one or
more members of the Board who are not Outside Directors the authority to grant
Stock Awards to eligible persons who are either (a) not then Covered Employees
and are not expected to be Covered Employees at the time of recognition of
income resulting from such Stock Award or (b) not persons with respect to whom
the Company wishes to comply with Section 162(m) of the Code and/or) (2)
delegate to a committee of one or more members of the Board who are not Non-
Employee Directors the authority to grant Stock Awards to eligible persons who
are not then subject to Section 16 of the Exchange Act.

    (d)  EFFECT OF BOARD'S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

4.  SHARES SUBJECT TO THE PLAN.

    (a)  SHARE RESERVE. Subject to the provisions of Section 11 relating to
adjustments upon changes in Common Stock, the Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate three million
(3,000,000) shares of Common Stock (the "Reserved Shares"). As of each January
1, beginning on January 1, 2002 and continuing through and including January 1,
2010, the number of Reserved Shares will be increased automatically by the
lowest of (i) five percent (5%) of the total number of shares of Common Stock
outstanding on such date, (ii) one million five hundred thousand (1,500,000)
shares or (iii) a number of shares determined by the Board prior to each January
1, which number shall be less than each of (i) and (ii) above.

    (b)  REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award shall for
any expire or otherwise terminate, in whole or in part, without having been
exercised in full, the shares of Common Stock not acquired under such Stock
Award shall revert to and again become available for issuance under the Plan.

    (c)  SOURCE OF SHARES. The shares of Common Stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or otherwise.

                                       5.
<PAGE>

5.  ELIGIBILITY.

    (a)  ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Incentive Stock Options may be
granted only to Employees. Stock Awards other than Incentive Stock Options may
be granted to Employees, Directors and Consultants.

    (b)  TEN PERCENT STOCKHOLDERS. A Ten Percent Stockholder shall not be
granted an Incentive Stock Option unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock at the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant.

    (c)  SECTION 162(m) LIMITATION. Subject to the provisions of Section 11
relating to adjustments upon changes in the shares of Common Stock, no Employee
shall be eligible to be granted Options covering more than two million
(2,000,000) shares of Common Stock during any calendar year.

    (d)  CONSULTANTS.

         (i)   A Consultant shall not be eligible for the grant of a Stock Award
if, at the time of grant, a Form S-8 Registration Statement under the Securities
Act ("Form S-8") is not available to register either the offer or the sale of
the Company's securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions.

         (ii)  Form S-8 generally is available to consultants and advisors only
if (i) they are natural persons; (ii) they provide bona fide services to the
issuer, its parents, its majority-owned subsidiaries or majority-owned
subsidiaries of the issuer's parent; and (iii) the services are not in
connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer's securities.

6.  OPTION PROVISIONS.

    Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical, but each
Option shall include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following provisions:

    (a)  TERM.  Subject to the provisions of subsection 5(b) regarding Ten
Percent Stockholders, no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the date it was granted.

                                       6.
<PAGE>

    (b)  EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the provisions
of subsection 5(b) regarding Ten Percent Stockholders, the exercise price of
each Incentive Stock Option shall be not less than one hundred percent (100%) of
the Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may
be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

    (c)  EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. Unless otherwise
approved by the Board, the exercise price of each Nonstatutory Stock Option
shall be not less than eighty-five percent (85%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with
an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.

    (d)  CONSIDERATION. The purchase price of Common Stock acquired pursuant to
an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised or (ii) at
the discretion of the Board at the time of the grant of the Option (or
subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the
Company of other Common Stock, (2) according to a deferred payment or other
similar arrangement with the Optionholder or (3) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise specifically
provided in the Option, the purchase price of Common Stock acquired pursuant to
an Option that is paid by delivery to the Company of other Common Stock
acquired, directly or indirectly from the Company, shall be paid only by shares
of the Common Stock of the Company that have been held for more than six (6)
months (or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes). At any time that the Company is
incorporated in Delaware, payment of the Common Stock's "par value," as defined
in the Delaware General Corporation Law, shall not be made by deferred payment.

    In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

    (e)  TRANSFERABILITY OF AN INCENTIVE STOCK OPTION. An Incentive Stock Option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

    (f)  TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory Stock
Option shall be transferable to the extent provided in the Option Agreement. If
the Nonstatutory Stock Option does not provide for transferability, then the
Nonstatutory Stock Option shall not be

                                       7.
<PAGE>

transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

    (g)  VESTING GENERALLY. The total number of shares of Common Stock subject
to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(g) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised.

    (h)  TERMINATION OF CONTINUOUS SERVICE. In the event an Optionholder's
Continuous Service terminates (other than upon the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.

    (i)  EXTENSION OF TERMINATION DATE. An Optionholder's Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionholder's Continuous Service (other than upon the Optionholder's death or
Disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in subsection 6(a) or (ii) the
expiration of a period of three (3) months after the termination of the
Optionholder's Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.

    (j)  DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement) or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

    (k)  DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's Continuous
Service terminates as a result of the Optionholder's death or (ii) the
Optionholder dies within the period (if any) specified in the Option Agreement
after the termination of the Optionholder's Continuous Service for a reason
other than death, then the Option may be exercised (to the extent

                                       8.
<PAGE>

the Optionholder was entitled to exercise such Option as of the date of death)
by the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder's death pursuant to subsection 6(e) or 6(f), but
only within the period ending on the earlier of (1) the date eighteen (18)
months following the date of death (or such longer or shorter period specified
in the Option Agreement) or (2) the expiration of the term of such Option as set
forth in the Option Agreement. If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.

    (l)  EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder's
Continuous Service terminates to exercise the Option as to any part or all of
the shares of Common Stock subject to the Option prior to the full vesting of
the Option. Any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate.

7.  PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

    (a)  STOCK BONUS AWARDS. Each stock bonus agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate.
The terms and conditions of stock bonus agreements may change from time to time,
and the terms and conditions of separate stock bonus agreements need not be
identical, but each stock bonus agreement shall include (through incorporation
of provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:

         (i)   CONSIDERATION. A stock bonus may be awarded in consideration of
past services actually rendered to the Company or an Affiliate for its benefit.

         (ii)  VESTING. Shares of Common Stock awarded under the stock bonus
agreement may, but need not, be subject to a share repurchase option in favor of
the Company in accordance with a vesting schedule to be determined by the Board.

         (iii) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event a
Participant's Continuous Service terminates, the Company may reacquire any or
all of the shares of Common Stock held by the Participant that have not vested
as of the date of termination under the terms of the stock bonus agreement.

         (iv)  TRANSFERABILITY. Rights to acquire shares of Common Stock under
the stock agreement shall be transferable by the Participant only upon such
terms and conditions as are set forth in the stock bonus agreement, as the Board
shall determine in its discretion, so long as Common Stock awarded under the
stock bonus agreement remains subject to the terms of the stock bonus agreement.

    (b)  RESTRICTED STOCK AWARDS. Each restricted stock purchase agreement shall
be in such form and shall contain such terms and conditions as the Board shall
deem appropriate. The terms and conditions of the restricted stock purchase
agreements may change from time to time, and the terms and conditions of
separate restricted stock purchase agreements need not be identical, but each
restricted stock purchase agreement shall include (through incorporation of

                                       9.
<PAGE>

provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:

         (i)   PURCHASE PRICE. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board shall determine and
designate in such restricted stock purchase agreement. Unless otherwise
determined by the Board, the purchase price shall not be less than eighty-five
percent (85%) of the Common Stock's Fair Market Value on the date such award is
made or at the time the purchase is consummated.

         (ii)  CONSIDERATION. The purchase price of Common Stock acquired
pursuant to the restricted stock purchase agreement shall be paid either: (i) in
cash at the time of purchase; (ii) at the discretion of the Board, according to
a deferred payment or other similar arrangement with the Participant; or (iii)
in any other form of legal consideration that may be acceptable to the Board in
its discretion; provided, however, that at any time that the Company is
incorporated in Delaware, then payment of the Common Stock's "par value," as
defined in the Delaware General Corporation Law, shall not be made by deferred
payment.

         (iii) VESTING. Shares of Common Stock acquired under the restricted
stock purchase agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.

         (iv)  TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event a
Continuous Service terminates, the Company may repurchase or otherwise reacquire
any or all of the shares of Common Stock held by the Participant that have not
vested as of the date of termination under the terms of the restricted stock
purchase agreement.

         (v)   TRANSFERABILITY. Rights to acquire shares of Common Stock under
the restricted stock purchase agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the restricted stock
purchase agreement, as the Board shall determine in its discretion, so long as
Common Stock awarded under the restricted stock purchase agreement remains
subject to the terms of the restricted stock purchase agreement.

8.  COVENANTS OF THE COMPANY.

    (a)  AVAILABILITY OF SHARES. During the terms of the Stock Awards, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Stock Awards.

    (b)  SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved of any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards unless and until
such authority is obtained.

                                      10.
<PAGE>

9.  USE OF PROCEEDS FROM STOCK.

    Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

10. MISCELLANEOUS.

    (a)  ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have the
power to accelerate the time at which a Stock Award may first be exercised or
the time during which a Stock Award or any part thereof will vest in accordance
with the Plan, notwithstanding the provisions in the Stock Award stating the
time at which it may first be exercised or the time during which it will vest.

    (b)  STOCKHOLDER RIGHTS. No Participant shall be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any shares of Common
Stock subject to such Stock Award unless and until such Participant has
satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

    (c)  NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or any
executed or Stock Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Stock Award was granted or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant's agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.

    (d)  INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that the
aggregate Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as Nonstatutory Stock Options.

    (e)  INVESTMENT ASSURANCES. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered

                                      11.
<PAGE>

under a then currently effective registration statement under the Securities Act
or (2) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the transfer
of the Common Stock.

    (f)  WITHHOLDING OBLIGATIONS. To the extent provided by the terms of a Stock
Award Agreement, the Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock
under a Stock Award by any of the following means (in addition to the Company's
right to withhold from any compensation paid to the Participant by the Company)
or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Stock Award, provided that no shares of
Common Stock are withheld with a value exceeding the minimum amount of tax
required to be withheld by law; or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.

11.  ADJUSTMENTS UPON CHANGES IN STOCK.

     (a)  CAPITALIZATION ADJUSTMENTS. If any change is made in the Common Stock
subject to the Plan, or subject to any Stock Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the maximum number of securities subject to
award to any person pursuant to subsection 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities
and price per share of Common Stock subject to such outstanding Stock Awards.
The Board shall make such adjustments, and its determination shall be final,
binding and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a transaction "without receipt of consideration"
by the Company.)

    (b)  DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate
immediately prior to such event.

    (c)  ASSET SALE, MERGER, CONSOLIDATION OR REVERSE MERGER. In the event of
(i) a sale, lease or other disposition of all or substantially all of the assets
of the Company, (ii) a merger or consolidation in which the Company is not the
surviving corporation or (iii) a reverse merger in which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise (individually, a "Corporate
Transaction"), then any surviving corporation or acquiring corporation shall
assume any Stock Awards outstanding under the Plan or shall substitute similar
stock awards (including an award to acquire the same consideration paid to the
stockholders in the Corporate Transaction for those

                                      12.
<PAGE>

outstanding under the Plan). In the event any surviving corporation or acquiring
corporation refuses to assume such Stock Awards or to substitute similar stock
awards for those outstanding under the Plan, then with respect to Stock Awards
held by Participants whose Continuous Service has not terminated, the vesting of
such Stock Awards (and, if applicable, the time during which such Stock Awards
may be exercised) shall be accelerated in full, and the Stock Awards shall
terminate if not exercised (if applicable) at or prior to the Corporate
Transaction. With respect to any other Stock Awards outstanding under the Plan,
such Stock Awards shall terminate if not exercised (if applicable) prior to the
Corporate Transaction.

12. AMENDMENT OF THE PLAN AND STOCK AWARDS.

    (a)  AMENDMENT OF PLAN. The Board at any time, and from time to time, may
amend the Plan. However, except as provided in Section 11 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Section 422 of the Code.

    (b)  STOCKHOLDER APPROVAL. The Board may, in its sole discretion, submit any
other amendment to the Plan for stockholder approval, including, but not limited
to, amendments to the Plan intended to satisfy the requirements of Section
162(m) of the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

    (c)  CONTEMPLATED AMENDMENTS. It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.

    (d)  NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

    (e)  AMENDMENT OF STOCK AWARDS. The Board at any time, and from time to
time, may amend the terms of any one or more Stock Awards; provided, however,
that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.

13. TERMINATION OR SUSPENSION OF THE PLAN.

    (a)  PLAN TERM. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board or approved by
the stockholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

                                      13.
<PAGE>

    (b)  NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall
not impair rights and obligations under any Stock Award granted while the Plan
is in effect except with the written consent of the Participant.

                                      14.
<PAGE>

14. EFFECTIVE DATE OF PLAN.

    The Plan shall become effective on the IPO Date, but no Stock Award shall
be exercised (or, in the case of a stock bonus, shall be granted) unless and
until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan is
adopted by the Board.

15. CHOICE OF LAW.

    The law of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state's conflict of laws rules.

                                      15.

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