Document:

efc8-0352_emailedex1010.htm

    Exhibit
10.10

     

     

    
 

    SCHEDULE

    to
the

    March 1,
2007 Master Agreement

    dated
as of [trade date of first transaction / signature date if no
transaction]

    between

     

    
      	
              UBS
      AG

            	
              and

            	
              UBS
      Managed Futures (Aspect) LLC

            
	
              (“Party
      A”)

            	 
      	
              (“Party
      B”)

            

    

    

    Part 1

    Termination
Provisions

    

    (a)            “Specified
Entity” means:

    

    (i)           for
Party A for the purpose of:

    

    Section 5(a)(v)
of this
Agreement,                                                                UBS
Securities LLC and UBS Limited,

    Section 5(a)(vi)
of this
Agreement,                                                               none,

    Section 5(a)(vii)
of this
Agreement,                                                              none,

    Section 5(b)(iv)
of this
Agreement                                                                none;
and

    

    (ii)           for
Party B for the purpose of:

    

    Section 5(a)(v)
of this
Agreement,                                                                the
Investment Adviser of Party B,

    Section 5(a)(vi)
of this
Agreement,                                                               the
Investment Adviser of Party B,

    Section 5(a)(vii)
of this
Agreement,                                                              the
Investment Adviser of Party B,

    Section 5(b)(iv)
of this
Agreement                                                                none.

    

    
      	
              (b)

            	
              “Specified
      Transaction” has the meaning specified in
      Section 14 of this Agreement and also means repurchase agreements,
      reverse repurchase agreements, securities lending agreements, forward
      contracts, precious metals transactions, letters of credit reimbursement
      obligations, indebtedness for borrowed money (whether or not evidenced by
      a note or similar instrument) and any amounts payable under exchange
      traded derivative agreements between one party to this Agreement (or any
      Credit Support Provider or applicable Specified Entity of that party) and
      the other party to this Agreement (or any Credit Support Provider or
      applicable Specified Entity of that other
  party).

            

    

    

    
      	
              (c)

            	
              The
      “Cross
      Default”
      provisions of Section 5(a)(vi) of this Agreement apply to
      Party A and to Party B with the addition of the following at the
      end:

            

    

    

    “however,
an Event of Default does not occur under either (1) or (2) above if such
party demonstrates to the reasonable satisfaction of the other that (a) the
event or condition referred to in (1) or the failure to pay referred to in
(2) is, or is due to, a failure to pay caused by an error or omission of an
administrative or operational nature; (b) funds were available to such
party to enable it to make the relevant payment when due; and (c) the
relevant payment is made within three Local Business Days following receipt of
written notice from an interested party of the failure to pay.”

    

    “Specified
Indebtedness” means any obligation (whether present or future, contingent
or otherwise as principal or surety or otherwise) for the payment or repayment
of any money.

     

    
 

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
 

    “Threshold
Amount” means:

     

    
      	
              (i)  

            	
              for
      Party A:  an amount equal to 2% of shareholders’ equity (however
      described) of Party A as shown on the most recent annual audited financial
      statements of Party A; and

            

    

     

    
      	
              (ii)  

            	
              for
      Party B, or any Credit Support Provider or Specified Entity of Party
      B:  the lesser of USD 10,000,000 (or the equivalent in other
      currencies) and an amount equal to 2% of Net Asset Value (as defined in
      Part 5 below) of Party B.

            

    

     

    
      	
              (d)  

            	
              The
      “Credit
      Event Upon Merger” provisions of Section 5(b)(iv) of this
      Agreement will apply to Party A and Party
B.

            

    

     

    
      	
              (e)  

            	
              The
      “Automatic
      Early Termination” provision of Section 6(a) of this Agreement
      applies to Party A and does/does not apply to Party
  B.

            

    

     

    
      	
              (f)  

            	
              Payments on
      Early Termination for the purpose of Section 6(e) of this
      Agreement:  (i) Loss applies; and (ii) the Second
      Method applies.

            

    

     

    
      	
              (g)  

            	
              “Termination
      Currency” means a currency
      in which payments are required to be made under a Confirmation for a
      Terminated Transaction, that is selected by the Non-defaulting Party or
      non-Affected Party, or, if there are two Affected Parties, as agreed
      between the parties or, failing agreement or if the currency selected is
      not freely available, the Termination Currency is U.S.
      Dollars.

            

    

     

    
      	
              (h)  

            	
              Additional
      Termination Event.  The following are Additional
      Termination Events for which Party B is the Affected
  Parry:

            

    

     

    
      	
              (A)  

            	
              Decline in
      Net Asset Value.  Party B’s Net Asset Value (as at the
      last day of any calendar month (such date, “X”)) declines by (i) 15%
      or greater within one calendar month of X, or (ii) 30% or greater
      within 3 calendar months of X or (iii) 40% or greater within 12
      calendar months of X;

            

    

     

    
      	
              (B)  

            	
              

                Minimum Partnership
      Capital/Net Asset Value.  The Partnership
      Capital/Net Asset Value of Party B is equal to or less than (i) 50%
      of Party B’s Partnership Capital/Net Asset Value as of the signing of this
      agreement or (ii) 50% of Party B’s Partnership Capital/Net Asset
      Value as of the 31st
      December of the previous calendar
year;

              

            

       

    

    
      	
              (C)  

            	
              Change of
      Adviser.  Aspect Capital Limited
      (the “Investment Adviser”) ceases to be the investment adviser to
      Party B;

            

    

     

    
      	
              (D)  

            	
              Change in
      Management.  Either Michael Adam or Anthony Todd ceases
      to be actively involved in and responsible for the management of the
      assets of Party B (as reasonably determined by
    Party A);

            

    

     

    
      	
              (E)  

            	
              Failure to
      Deliver Net Asset Value Statement.  Party B fails to
      deliver a statement of its Net Asset Value or its monthly investment
      report on or before the third Local Business Day of Party A notifying
      Party B (whether in writing or orally) of Party B’s failure to provide the
      report on the required delivery date specified in Part 3 of this
      Schedule; and

            

    

     

    
      	
              (F)  

            	
              Change in Regulatory Status.  The Investment
      Adviser ceases to be regulated by a recognized regulatory body in a FATF
      (Financial Action Task Force)
country.

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    Part 2

     

    Tax Representations

     

    
      	
              (a)  

            	
              Payer Tax
      Representations.  For the purpose of Section 3(e) of
      this Agreement, Party A and Party B each make the following
      representation:

            

    

     

    It is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment (other
than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
made by it to the other party under this Agreement.  In making this
representation, it may rely on (i) the accuracy of any representations made
by the other party pursuant to Section 3(f) of this Agreement,
(ii) the satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of any document
provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of
this Agreement and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement, PROVIDED THAT it is not a
breach of this representation where reliance is placed on sub-clause (ii)
above and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.

     

    
      	
              (b)  

            	
              Payee Tax
      Representations.  For the purpose of Section 3(f) of
      this Agreement, Party A and Party B make no
    representations.

            

    

     

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    Part 3

     

    Agreement
to Deliver Documents

     

    For the
purposes of Sections 3(d), 4(a)(i) and (ii) of this Agreement, each
party agrees to supply the following documents:

     

    
      	
              PARTY
      REQUIRED

            	
              FORM/DOCUMENT/

            	
              DATE
      BY WHICH

            	
              COVERED
      BY SECTION

            
	
              TO
      DELIVER DOCUMENT:

            	
              CERTIFICATE:

            	
              TO
      BE DELIVERED:

            	
              3(d)
      REPRESENTATION:

            
	 	 	 	 
	
              Party
      A and Party B

            	
              Evidence
      of the authority

            	
              On
      or before execution of

            	
              Yes

            
	 
      	
              and
      true signatures of each

            	
              this
      Agreement and each

            	 
      
	 
      	
              official
      or representative

            	
              Confirmation
      forming a part

            	 
      
	 
      	
              signing
      this Agreement or

            	
              of
      this Agreement.

            	 
      
	 
      	
              Confirmation
      on its behalf.

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Opinion
      of Party B’s legal

            	
              On
      or before execution of

            	
              Yes

            
	 
      	
              counsel
      in a form

            	
              this
      Agreement.

            	 
      
	 
      	
              satisfactory
      to Party A

            	 
      	 
      
	 
      	
              regarding
      (inter alia) the

            	 
      	 
      
	 
      	
              power
      and authority of Party

            	 
      	 
      
	 
      	
              B
      to enter into this

            	 
      	 
      
	 
      	
              Agreement
      and

            	 
      	 
      
	 
      	
              Transactions
      hereunder.

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Evidence
      reasonably

            	
              On
      or before execution of

            	
              Yes

            
	 
      	
              satisfactory
      to Party A

            	
              this
      Agreement.

            	 
      
	 
      	
              authorising
      Party B’s

            	 
      	 
      
	 
      	
              execution
      of this Agreement

            	 
      	 
      
	 
      	
              and
      each Confirmation and

            	 
      	 
      
	 
      	
              performance
      of Party B’s

            	 
      	 
      
	 
      	
              obligations.

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Annual
      Audited

            	
              As
      soon as practicable but

            	
              Yes

            
	 
      	
              Financial
      Statements

            	
              in
      any event within 90

            	 
      
	 
      	 
      	
              days
      of the end of each

            	 
      
	 
      	 
      	
              financial
      year

            	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Copy
      of the monthly

            	
              Within
      15 days of the last

            	
              Yes

            
	 
      	
              investment
      report

            	
              Local
      Business Day in

            	 
      
	 
      	
              prepared
      by the

            	
              each
      calendar month

            	 
      
	 
      	
              investment
      adviser and

            	 
      	 
      
	 
      	
              sent
      to investors, to

            	 
      	 
      
	 
      	
              include
      NAV information,

            	 
      	 
      
	 
      	
              performance

            	 
      	 
      
	 
      	
              commentary/attribution,

            	 
      	 
      
	 
      	
              and
      summary portfolio

            	 
      	 
      
	 
      	
              information

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Confirmation
      of the NAV

            	
              Within
      15 days of the last

            	
              Yes

            
	 
      	
              and
      NAV per share of Party

            	
              Local
      Business Day in

            	 
      

    

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    
      	 
      	
              B
      to be provided directly

            	
              each
      calendar month

            	 
      
	 
      	
              from
      Party B’s Administrator

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Any
      other information which

            	
              Upon
      request of Party A

            	
              Yes

            
	 
      	
              Party
      A may reasonably

            	 
      	 
      
	 
      	
              request
      from Party B from

            	 
      	 
      
	 
      	
              time
      to time

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Letter
      of Process Agent of

            	
              On
      or before execution of

            	
              Yes

            
	 
      	
              Party
      B confirming

            	
              this
      Agreement.

            	 
      
	 
      	
              acceptance
      of appointment.

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              Party
      B

            	
              Certified
      copy of the

            	
              On
      or before execution of

            	
              Yes

            
	 
      	
              resolution
      of Party B’s

            	
              this
      Agreement.

            	 
      
	 
      	
              Board
      of Directors (or

            	 
      	 
      
	 
      	
              equivalent
      authorising

            	 
      	 
      
	 
      	
              documentation)
      authorising

            	 
      	 
      
	 
      	
              the
      execution and delivery

            	 
      	 
      
	 
      	
              of
      this Agreement and each

            	 
      	 
      
	 
      	
              Confirmation
      and

            	 
      	 
      
	 
      	
              performance
      of its

            	 
      	 
      
	 
      	
              obligations
      hereunder.

            	 
      	 
      

    

    

    

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    Part 4

     

    Miscellaneous

     

    
      	
              (a)  

            	
              Address for
      Notices.  For the purpose of Section 12(a) of this
      Agreement:

            

    

     

    Address for notices or communications
to Party A:

    

    For a
particular Transaction, the address, telex number or facsimile number specified
in the Confirmation and for any other notice the address specified
below:

     

    Address:                      100
Liverpool Street, London EC2M 2RH

    Attention:                    Credit
Risk Management - Documentation Unit / Legal Department

    Facsimile
no:               +44
20 7567 4406 / +44 20 7568 9247

    Telephone
no:            +44
20 7567 8000

     

    Address
for notices or communications to Party B:

     

    Address:                      PLEASE
ADVISE
Attention:
Telex:                          
Answerback:
Facsimile:                    Telephone:
Electronic
Messaging Details:

     

    
      	
              (b)  

            	
              Process
      Agent.  For the purpose of Section 13(c) of this
      Agreement:  For Party A:  not
      applicable.  For Party B:  [please state the name and
      permanent address (in England and Wales) of the process agent that you
      have appointed to receive court papers as your agent in the event of legal
      proceedings in England.]

            

    

     

    
      	
              (c)  

            	
              Offices.  The provisions of
      Section 10(a) of this Agreement apply to Party A and Party
      B.

            

       

      
        	
                (d)  

              	
                Multibranch
      Party.  For the purpose of
      Section 10(c) of this
  Agreement:

              

        
           

          Party A
is a Multibranch Party and may act through its branches in any of the following
territories or countries:  England and Wales, Australia, Hong Kong,
United States of America, Singapore, and Switzerland.  Party B is not
a Multibranch Party.

        

         

        
          	
                  (e)  

                	
                  Calculation Agent.  The Calculation Agent is
      Party A, unless otherwise specified in the Confirmation for the relevant
      Transaction.

                

           

          
            	
                    (f)  

                  	
                    Credit
      Support Document.  Details of any Credit
      Support Document for Party A and Party B:  not
      applicable.

                  

             

          

        

      

    

    
      	
              (g)  

            	
              Credit
      Support Provider.  Credit Support Provider
      means for Party A and Party B, not
    applicable.

            

       

      
        	
                (h)  

              	
                Governing
      Law.  This
      Agreement is governed by and must be construed in accordance with English
      law.

              

         

      

    

    
      	
              (i)  

            	
              Netting of
      Payments.  Subparagraph (ii) of
      Section 2(c) of this Agreement applies except for FX and Currency
      Option Transactions and energy commodity transactions where subparagraph
      (ii) of Section 2(c) does not apply.  Payments in FX
      and Currency Option Transactions are netted with payments in other FX and
      Currency Option Transactions in the same currency but not with
      Transactions other than FX and Currency Option
      Transactions.  Payments in energy commodity transactions are
      netted with other payments in energy commodity transactions in the same
      currency but not with Transactions other than energy commodity
      transactions.

            

    

     

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    
       

      
        	
                (j)  

              	
                “Affiliate” has
      the meaning specified in Section 14 of this
      Agreement.

              

         

      

       

      

        
          
             

          

          
            25

            
              

            

          

          
             

          

        

    

    Part 5

     

    Other
Provisions

     

    
      	
              (a)  

            	
              Set-off.  Without
      affecting the provisions of the Agreement requiring the calculation of
      certain net payment amounts, all payments under this Agreement will be
      made without set-off or counterclaim; provided, however, that upon the
      designation of an Early Termination Date following an Event of Default, or
      a Termination Event under Section 5(b)(iv) or Section 5(b)(v),
      in addition to and not in limitation of any other right or remedy
      (including any right to set off, counterclaim, or otherwise withhold
      payment or any recourse to any Credit Support Document) under applicable
      law the Non-defaulting Party or non-Affected Party (in either case, “X”)
      may without prior notice to any person set off any sum or obligation
      (whether or not arising under this Agreement and whether matured or
      unmatured, whether or not contingent and irrespective of the currency,
      place of payment or booking office of the sum or obligation) owed by the
      Defaulting Party or Affected Party (in either case, “Y”) to X or any
      Affiliate of X against any sum or obligation (whether or not arising
      under this Agreement, whether matured or unmatured, whether or not
      contingent and irrespective of the currency, place of payment or booking
      office of the sum or obligation) owed by X or any Affiliate of X
      to Y and, for this purpose, may convert one currency into another at a
      market rate determined by X. If any sum or obligation is
      unascertained, X may in good faith estimate that sum or obligation
      and set-off in respect of that estimate, subject to X or Y, as the
      case may be, accounting to the other party when such sum or obligation is
      ascertained.  Nothing in this Agreement shall create or be
      deemed to create any charge under English
law.

            

    

     

    
      	
              (b)  

            	
              Representations.  Section 3(a)
      of this Agreement is hereby amended by the deletion of “and” at the end of
      Section 3(a)(iv); the substitution of the word “; and” for the full
      stop at the end of Section 3(a)(v) and the addition of
      Section 3(a)(vi) as follows:

            

    

     

    
      	
               
      

            	
              “(vi)

            	
              No
      Agency.  It is entering into this Agreement and each
      Transaction as principal (and not as agent
      or in any other capacity, fiduciary or
  otherwise).”

            

    

     

    
      	
              (c)  

            	
              Waiver
      Of Jury Trial.  Each
      party waives, to the fullest extent permitted by law, any right it may
      have to a trial by jury in respect of any suit, action or proceeding
      relating to this agreement or any credit support document or any
      transaction.  Each party (i) certifies that no
      representative, agent or attorney of the other party or any credit support
      provider has represented, expressly or otherwise, that the other party
      would not seek to enforce this waiver in the event of any such suit,
      action or proceeding and (ii) acknowledges that it and the other
      party have entered into this agreement and any credit support document, as
      applicable, in reliance on, among other things, the mutual waivers and
      certifications in this section.

            

    

     

    
      	
              (d)  

            	
              Consent to
      Recording.  Each Party (i) consents to the recording
      of all telephone conversations between trading, operations and marketing
      personnel of the parties and their Affiliates in connection with this
      Agreement or any potential Transaction; (ii) agrees to give notice to
      such personnel of it and its Affiliates that their calls will be recorded;
      and (iii) agrees that in any Proceedings, it will not object to the
      introduction of such recordings in evidence on the ground that consent was
      not properly given.

            

    

     

    
      	
              (e)  

            	
              Scope of
      Agreement.  Upon the effectiveness of this Agreement and
      unless the parties to this Agreement otherwise agree in writing, by
      specific reference to this Agreement, that this provision does not apply,
      all Derivative Transactions (as defined below) then outstanding, or which
      may be entered into thereafter, between the parties, including
      Transactions entered into by the parties through Offices, if any, listed
      in Part 4(d), are deemed to be Transactions governed by this
      Agreement and any confirmation or other confirming evidence of the
      Transaction is deemed to be a
Confirmation.

            

    

     

    ‘Derivative
Transaction’ means any transaction (including an agreement with respect thereto)
which is a rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction,

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option, credit protection
transaction, credit swap, credit default swap, credit default option, total
return swap, credit spread transaction, weather index transaction,
bullion/precious metal transaction, base meta’ transaction, or forward purchase
or sale of a security, commodity or other financial instrument or interest, or
any other similar transaction (including any option with respect to any of these
transactions) and any combination of these transactions.

     

    ISDA Definitions.  (i) The provisions of the 1998 FX
and Currency Option Definitions (as published by the International Swaps and
Derivatives Association, Inc., the Emerging Markets Traders Association and the
Foreign Exchange Committee) (the “1998 FX Definitions”) are hereby incorporated
in their entirety and shall apply to any FX Transaction or Currency Option
Transaction as defined in Section 1.12 and Section 1.5, respectively,
of Article 1 of the 1998 FX Definitions (each an “FX Transaction” or
“Currency Option Transaction”, respectively) entered into by the parties hereto
(unless, in relation to a particular FX Transaction or Currency Option
Transaction, as otherwise specified in the relevant Confirmation) ;
and

     

    (ii) The
provisions of the 2005 ISDA Commodity Definitions (as published by the
International Swaps and Derivatives Association, Inc.) (the “Commodity
Definitions”) are hereby incorporated in their entirety and shall apply to any
Transaction as defined in Section 1.1 of Article 1 of the Commodity
Definitions (each a “Commodity Transaction”) entered into by the parties hereto
(unless, in relation to a particular Commodity Transaction, as otherwise
specified in the relevant Confirmation) .

     

    (f)           Relationship
between the Parties.  This Agreement is amended by the addition
of Section 15 as follows:

     

    “15.           Relationship between the
Parties.

     

    Each
party is deemed to represent to the other party on the date on which it enters
into a Transaction (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that
Transaction):

     

    
      	
              (a)  

            	
              Non
      Reliance.  It is acting for its own account, and it has
      made its own independent decisions to enter into that transaction and as
      to whether that Transaction is appropriate or proper for it based upon its
      own judgement and upon advice from such advisers as it has deemed
      necessary.  It is not relying on any communication (written or
      oral) of the other party as investment advice or as a recommendation to
      enter into that Transaction; it being understood that information and
      explanations related to the terms and conditions of a Transaction shall
      not be considered investment advice or a recommendation to enter into that
      Transaction.  No communication (written or oral) received from
      the other party shall be deemed to be an assurance or guarantee as to the
      expected results of that
Transaction.

            

    

     

    
      	
              (b)  

            	
              Assessment
      and Understanding.  It is capable of assessing the merits
      of and understanding (on its own behalf or through independent
      professional advice), and understands and accepts, the terms, conditions
      and risks of that Transaction.  It is also capable of assuming,
      and assumes, the risks of that
Transaction.

            

    

     

    
      	
              (c)  

            	
              Status of
      Parties.  The other party is not acting as a fiduciary
      for or an adviser to it in respect of that
  Transaction.”

            

    

     

    References
in this clause to a “party”, for UBS AG and where the context allows,
includes any Affiliate of UBS AG.

     

    
      	
              (g)

            	
              Prior
      Agreements.  This
      Agreement supersedes all Agreements between the parties entered into prior
      to the execution of this Agreement governing any Specified Transaction
      between the parties and all confirmations
for

            

    

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    those
Specified Transactions supplement, form part of, and are subject to this
Agreement, such confirmations are Confirmations and such Specified Transactions
are Transactions.  For the purposes of this provision the definition
of Specified Transaction is as defined in Section 14 of the Master
Agreement, amended by the deletion of the words “, subject to the schedule,”
from the first line and “this Agreement or” from the final line.

     

    (h)           Agreements.  Section 4
of this Agreement is amended by the addition of Section 4(f) as
follows:

     

    
      	
                    
      "(f)

            	
              Physical
      Delivery.  In respect of any physically settled
      Transactions, it will, at the time of delivery, be the legal and
      beneficial owner, free of liens and other encumbrances, of any securities
      or commodities it delivers to the other party; and, in addition, with
      respect to any breach of this Section 4(f), Section 5(a)(ii) of
      this Agreement is amended by the insertion of a full stop after
      “Agreement” on the fifth line and the deletion of the remainder of the
      Section.”

            

    

     

    (i)           Failure to Pay or
Deliver.  For Party B only, Section 5(a)(i) is deleted in
its entirety and replaced by:

     

    
       

      
        	
                (i)  

              	
                
                  Failure to Pay or
      Deliver.  Failure by Party B to make, when due, any
      payment under this Agreement or any delivery under Section 2(a)(i) or
      2(e) required to be made by
it.”

                

              

      

       

    

    
      
        	
                (j)

              	
                Further Representation of
      Party B.  In
      addition to its representations under Section 3, Party B represents
      to Party A (which representations are deemed to be repeated by Party B on
      each date on which any Transaction exists)
that:

              

      

       

    

    
      	
              (i)  

            	
              It
      has appointed the Investment Adviser to act as its agent for all purposes
      under this Agreement (including, without limitation, for the purpose of
      entering into Transactions on its behalf) (each such Transaction an
      “Agency Transaction”); and

            

    

     

    
      	
              (ii)  

            	
              Any
      person (including, without limitation, the Investment Adviser and any
      person representing or purporting to represent the Investment Adviser)
      signing the Agreement or any Confirmation, and any such person entering
      into any Transaction, is authorised to do so on behalf of Party
      B.

            

    

     

    
      	
              (k)

            	
              Further
      Agreements of Party B.  In addition
      to its agreements under Section 4, Party B agrees with Party A that,
      so long as either party has or may have any obligations under this
      Agreement:

            

    

     

    
      	
              (i)  

            	
              Any
      amounts payable by Party A under this Agreement are deemed satisfied when
      paid to an account as instructed by the Investment
  Adviser.

            

    

     

    
      	
              (ii)  

            	
              Party
      B is bound as principal of any Agency Transaction entered into by the
      Investment Adviser or any other person representing or purporting to
      represent the Investment Adviser, despite any lack of power or authority
      on the part of the Investment Adviser or such other
  person.

            

    

     

    
      	
              (l)

            	
              Reliance on
      Notices.  Except as otherwise stated herein, each
      party may rely upon any oral or written notices and instructions
      reasonably believed to be originated from the other party or its duly
      authorised agent (including, for Party B, the Investment Adviser) and does
      not incur any liability to the other party in acting in accordance with
      those notices and instructions.

            

       

      
        	
                (m)

              	
                
                  Termination
      Notice.  Section 6(b)(i) of this Agreement is
      modified by the addition of the words “and in any
      event within one Local Business Day,” after the words “promptly upon
      becoming aware of it,” in the first and second lines
      thereof.

                

              

         

        
          	
                  (n)

                	
                  
                    Definitions.  Section 14
      is amended to include the following definition in its appropriate
      alphabetical position:

                  

                

           

        

      

    

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    ‘Net Asset Value’ or
‘NAV’
means the result in U.S. Dollars of subtracting the total value of all
liabilities (including but not limited to the aggregate mark-to-market value of
all trading positions constituting liabilities) from the total value of all
assets (including but not limited to cash, deposit accounts and instruments,
securities, and the aggregate mark-to­-market value of all trading positions
constituting assets).  For purposes of this computation, amounts
denominated in a currency other than U.S. Dollars are converted to U.S. Dollars
at the then-prevailing spot rate.

     

    
      	
              (o)

            	
              
                Break clause for
      Transactions.  Party A may, by giving 3 Local
      Business Days’ notice to Party B, designate an Early Termination Date for
      any Transaction on each anniversary of the trade date of that Transaction,
      in which case the Transaction is Cash-Settled under Section 17 of the
      ISDA 2000 Definitions, using Cash Price Settlement Method and Quotation
      Rate of Mid.

              

            

       

    

    (p)           Indian
transactions

     

    For any
Transaction that references a share listed on a stock exchange in India, Party A
and Party B:

     

    
      	
              (1)  

            	
              consent
      to the other party providing any Indian government or regulatory authority
      with any information regarding it and the Transaction as required under
      Indian regulations or as requested by any Indian government or regulatory
      authority;

            

    

     

    
      	
              (2)  

            	
              agree
      to provide to the other party any additional information that the other
      party considers necessary or appropriate in order for that other party to
      comply with any such regulations or
requests;

            

    

     

    
      	
              (3)  

            	
              represent
      to the other that the Transaction is not being entered into for the
      benefit or account of, or pursuant to or in connection with any
      back-to-back transaction with:  (i) a Person Resident in
      India as the term is used in the Foreign Exchange Management Act, 1999
      (the “Act”), or , (ii) a “Non-Resident Indian”, a “Person of Indian
      Origin” or an “Overseas Corporate Body”, as those terms are used in the
      Foreign Exchange Management (Deposit) Regulations 2000 as notified by the
      Reserve Bank of India or (iii) any entity or person that is not
      regulated (as that term is used in the Securities and Exchange Board of
      India (Foreign Institutional Investors Amendment) Regulations, 2004)
      (each, a “Restricted Entity”);

            

    

     

    
      	
              (4)  

            	
              represent
      to the other that it is not a Restricted Entity;
  and

            

       

    

    
      	
              (5)  

            	
              agree
      not to, directly or indirectly, sell, transfer, assign, novate or
      otherwise dispose of the Transaction to or for the benefit or account of
      any Restricted Entity.

            

    

     

    (q)           Taiwanese
transactions

     

    For any
Transaction that references a share listed on a stock exchange in Taiwan, Party
A and Party B each represent to the other that:

     

    
      	
              (1)  

            	
              it
      is not entering into the Transaction for the benefit or account of, or
      pursuant to or in connection with any back-to back transaction with
      (A) any residents of the People’s Republic of China (“PRC”),
      corporations in the PRC, or corporations outside the PRC that are
      beneficially owned by residents of the PRC or (B) any residents of
      the Republic of China (“Taiwan”), corporations in Taiwan, or corporations
      outside Taiwan that are beneficially owned by residents of
      Taiwan.

            

    

     

    
      	
              (2)  

            	
              it
      will not, directly or indirectly, sell, transfer, assign, novate or
      otherwise dispose of the Transaction to or for the benefit or account
      (i) any residents of the PRC, corporations
  in

            

    

     

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    the PRC,
or corporations outside the PRC that are beneficially owned by residents of the
PRC or (ii) any residents of Taiwan, corporations in Taiwan, or
corporations outside Taiwan that are beneficially owned by residents of
Taiwan.

     

    
      	
              (3)  

            	
              details
      of the Transaction (including the identity of the parties) may,
      (1) upon request or order by any competent authority, regulatory or
      enforcement organisation, governmental or otherwise, including the stock
      exchange on which the underlying shares are listed, (2) as required
      by applicable law, rules, regulations, codes or guidelines (whether having
      the force of law or otherwise), be disclosed in accordance with such
      request, order, law, rules, regulations, codes or guidelines (whether such
      disclosure is to be made to third parties or otherwise).  By
      entering into the Transaction, each party agrees to such disclosure and
      releases the other (and its subsidiaries and affiliates) from any duty of
      confidentiality owed to it in relation to such
  information.

            

       

    

     

    (r)           Chinese
transactions

     

    For any
Transaction that references a share listed on a stock exchange in People’s
Republic of China (“PRC”), Party A and Party B each represent to the other
that:

     

    
      	
              (1)  

            	
              it
      is not entering into the Transaction for the benefit or account of, or
      pursuant to or in connection with any back-to back transaction with any
      Domestic Investor or any person for the account of any Domestic
      Investor.

            

    

     

    
      	
              (2)  

            	
              it
      will not, directly or indirectly, sell, transfer, assign, novate or
      otherwise dispose of the Transaction, directly or indirectly, to any
      Domestic Investor or any person for the account of any Domestic
      Investor.

            

    

     

    
      	
              (3)  

            	
              details
      of the Transaction (including identity of the parties) may (a) upon
      request or order by any competent authority, regulatory or enforcement
      organisation, governmental or otherwise, including without limitation, the
      Securities and Futures Bureau of the Financial Supervisory Commission of
      the Republic of China, and including the stock exchange on which the
      underlying shares are listed, (b) as required by applicable law,
      rules, regulations, codes or guidelines (whether having the force of law
      or otherwise), be disclosed in accordance with such request, order, law,
      rules, regulations, codes or guidelines (whether such disclosure is to be
      made to third parties or otherwise).  By entering into the
      Transaction, each party agrees to such disclosure and releases the other
      (and its subsidiaries and affiliates) from any duty of confidentiality
      regarding such disclosure.

            

    

     

    “Domestic Investor” is defined in the
Administrative Rules of Securities Accounts of China Securities Depository and
Clearing Corporation Limited and includes the following:

     

    
      	
              (i)  

            	
              PRC
      citizens resident in the PRC (excluding Hong Kong, Macau and
      Taiwan);

            

       

      
        	
                (ii)  

              	
                
                  PRC
      citizens resident outside the PRC who are not permanent residents of
      another country or permanent residents of Hong Kong, Macau or
      Taiwan;

                

              

         

        
          	
                  (iii)  

                	
                  Legal
      persons registered in the PRC (excluding Hong Kong, Macau and
      Taiwan).

                

           

        

      

    

    “PRC
citizens” used in the rules do not include persons who are
permanent residents of Hong Kong, Macau or Taiwan.

     

    “Legal persons
registered in the PRC” excludes foreign entities incorporated or
organised in other jurisdictions even though they may have an office (i.e. a
branch) in the PRC.

     

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

     

    

    
 

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    Paragraph
11.  Elections and
Variables

     

    (a)           Base Currency and Eligible
Currency.

     

    (i)    “Base
Currency” means United States Dollars.

     

    (ii)    “Eligible
Currency” means the Base Currency,

     

    (b)          
Credit
Support Obligations.

     

    (i)           
Delivery Amount, Return Amount
and Credit Support Amount.

     

    (A) “Delivery Amount” has the meaning
specified in Paragraph 2(a).

     

    (B) “Return Amount”
has the meaning specified in paragraph 2(b).

     

    (C) “Credit Support
Amount” has the meaning specified in Paragraph 10

     

    
      	
              (ii)

            	
              Eligible
      Credit Support.

            	
              The
      following items will qualify as “Eligible
      Credit Support”
      for the party
specified:

            

    

     

    

    
      	 
      	
              Party
      A

            	
              Party
      B

            	
              Valuation
      Percentage

            
	 	 	 	 
	
              (A) 
      cash in an Eligible Currency

            	
              N/A

            	
              YES

            	
              100%

            
	 	 	 	 
	
              (B) 
      negotiable debt obligations having a residual maturity of not more than
      one year issued by any of the following governments:
- United States of
      America (US Treasury Department issues only)
-
      Germany
-
      France

            	
              N/A

            	
              YES

            	
              98%

            
	 	 	 	 
	
              (C) 
      negotiable debt obligations having a residual maturity of more than one
      year but less than or equal to 5 years issued by any of the following
      governments:
-
      United States of America (US Treasury Department issues
      only)
-
      Germany
-
      France

            	
              N/A

            	
              YES

            	
              96%

            
	 	 	 	 
	
              (D) 
      negotiable debt obligations having a residual maturity of more than 5
      years but less than or equal to 10 years issued by any of the following
      governments:
-
      United States of America (US Treasury Department issues
    only)

            	
              N/A

            	
              YES

            	
              94%

            

    

     

    
 

    
      
        
           

        

        
          11

          
            

          

        

        
           

        

      

    

    

     

    
      	
                      -
      Germany - France

            	
               

            	
               

            	
               

            

       

      In the
case of (B) to (D) only is so far as they are denominated in the
domestic currency of the country or Euro in the case of Euro member
countries,

       

      (iii)           Thresholds.

       

      
        
          	
                  (A)  

                	
                  “Independent
      Amount” means with respect to Party A:  Zero

                  “Independent
      Amount” means with respect to Party B:  an amount agreed
      between the parties at the time of
trading.

                

        

         

        
          	
                  (B)  

                	
                  “Threshold” means with
      respect to Party A:  Infinity

                  “Threshold”
      means with respect to Party
  B:  zero

                

        

         

        provided
however that if an Event of Default has occurred and is continuing with respect
to such party, such party’s Threshold shall be zero.

         

        
          	
                  (C)  

                	
                  “Minimum
      Transfer
      Amount” means with respect to Party A:  USD
      500,000

                  “Minimum
      Transfer Amount” means with respect to Party B:  USD
      50,000.

                

        

         

        provided
however that if an Event of Default has occurred and is continuing with respect
to such party, such party’s Minimum Transfer Amount shall be zero.

         

        
          	
                  (D)  

                	
                  Rounding.  The
      Delivery Amount and the Return Amount will be rounded up and down
      respectively to the nearest integral multiple of USD
    50,000.

                

        

         

        (c)    Valuation and Timing.

         

        
          	
                   
      

                	
                  (i)

                	
                  “Valuation
      Agent” means, Party A, acting in good faith and a commercially
      reasonable manner.

                

        

         

        
          
            	
                     
      

                  	
                    (ii)

                  	
                    “Valuation
      Date” means any
      Local Business Day.

                  

          

           

          
            	
                     
      

                  	
                    (iii)

                  	
                    
                      “Valuation
      Time” means the close of business in the Relevant Market on the
      Local Business Day first preceding the Valuation Date or date of
      calculation, as applicable.

                    

                  

             

          

        

        For the
purposes of this provision, “Relevant Market” means

         

        
          	
                  (a)  

                	
                  with
      respect to the calculation of Value, the principal market in which the
      relevant Eligible Credit Support is traded;
and

                

        

         

        
          
            	
                    (b)  

                  	
                    with
      respect to the calculation of Exposure, the location most closely
      associated with the relevant
Transaction;

                  

          

           

        

        
          
             

          

          
            12

            
              

            

          

          
             

          

        

        each as
determined by the Valuation Agent , or as otherwise agreed between the
parties.

         

        (iv)           “Notification
Time” means 1:00 p.m., London time, on the Local Business
Day.

         

        (d)           Exchange
Date.  “Exchange Date” has the meaning specified in Paragraph
3(c)(ii).

         

        (e)           Dispute Resolution.

         

        
          	
                  (i)  

                	
                  “Resolution
      Time” means 1:00 p.m., London time, on the Local Business Day
      following the date on which the notice is given that gives rise to a
      dispute under Paragraph 4.

                

        

         

        
          	
                  (ii)  

                	
                  Value.  For
      the purpose of Paragraphs 4(a)(4)(i)(C) and 4(a)(4)(ii), the Value of
      the outstanding Credit Support Balance or of any transfer of Eligible
      Credit Support or Equivalent Credit Support, as the case may be, will be
      calculated as follows:  disputes over value will be resolved by
      the Valuation Agent seeking three bid quotes as of the relevant Valuation
      Date or date of Transfer from parties that regularly act as dealers in the
      securities or other property in question.  The Value will be the
      mean of the Base Currency Equivalent of the arithmetic mean of the bid
      prices obtained by the Valuation Agent multiplied by the nominal amount of
      such security, plus any income which, as of such date, has accrued but not
      yet been paid in respect of the security to the extent not included in
      such price as of such date, multiplied by the applicable Valuation
      Percentage.

                

        

         

        
          
            	
                    (iii)  

                  	
                    Alternative.  The
      provisions of Paragraph 4 will
apply.

                  

          

           

        

        (f)           Distributions and Interest
Amount.

         

        
          	
                  (i)  

                	
                  Interest
      Rate.  The
      “Interest Rate” in relation to each Eligible Currency specified below will
      be:

                

        

         

        Eligible
Currency                                          Interest
Rate

         

        
          	
                   
      

                	
                  US
      DOLLARS

                	
                  Fed
      Funds as quoted on Telerate
page 118

                

        

         

        
          	
                  (ii)  

                	
                  Transfer of
      Interest Amount.  The transfer of the Interest Amount
      will be made on or within 5 Local Business Days after the last Local
      Business Day of each calendar month and on any other Local Business Day as
      agreed between the parties
thereafter.

                

        

         

        
          	
                  (iii)  

                	
                  Alternative to Interest
      Amount.  The provisions of Paragraph 5(c)(ii) will
      apply.

                

           

        

         

        (g)           Addresses
for Transfers.

         

        
          
             

          

          
            13

            
              

            

          

          
             

          

        

        Party
A:                 UBS
AG

        100
Liverpool Street
London EC2M 2RH

         

        Tel:  44
20 7567 2684
Fax; 44 20 7567 3894

         

        For the
attention of the Collateral Manager

         

        Party
B:                 PLEASE ADVISE

         

        (h)           Other
Provisions.

         

        (i) The
definition of “Value” in Paragraph 10 of the Annex shall be amended as
follows:

         

        (a) by
deleting the words under (B) and replacing with:

         

        “a
security, the Base Currency Equivalent of the bid price obtained by the
Valuation Agent multiplied by the nominal amount of such security, plus any
income which, as of such date, has accrued but not yet been paid in respect of
the security to the extent not included in such price as of such date,
multiplied by the applicable Valuation Percentage, if any; and”

         

        (b) by adding
at the end of sub-paragraph (i) thereof;

         

        “Provided
that for a Valuation Date which is an Early Termination Date designated or
deemed to have occurred as a result of an Event of Default or an Additional
Termination Event, the Valuation Percentage shall be deemed to be
100%.”

         

        (ii) The
final paragraph of Paragraph 3(a) is replaced by:

         

        “If a
demand for transfer of Eligible Credit Support or Equivalent Credit Support is
received by the Notification Time, then the relevant transfer must be made not
later than the close of business on that Local Business Day, and if the demand
is received after the Notification Time, then the relevant transfer must be made
not later than the close of business on the next following Local Business
Day.”

         

        (iii)
This Annex, including the act of transfer (disposition) itself, will be governed
and construed in accordance with English law.

         

        

        
          
             

          

          
            14

            
              

            

          

          
             

          

        

      

       

      15Untitled Document

Exhibit 10.3

VAUGHAN FOODS, INC.
2006 EQUITY INCENTIVE PLAN

1. Purpose; Types of Awards; Construction.

The purpose of the Vaughan Foods, Inc. 2006 Equity Incentive Plan (the “Plan”) is to align the interests of officers, other key employees, consultants and nonemployee directors of Vaughan
  Foods, Inc. (the “Company”) and its affiliates with those of the stockholders of the Company, to afford an incentive to such officers, employees, consultants and directors to continue as such, to
  increase their efforts on behalf of the Company and to promote the success of the Company’s business. To further such purposes, the Committee may grant options to purchase shares of the
  Company’s common stock. The provisions of the Plan are intended to satisfy the requirements of Section 16(b) of the Securities Exchange Act of 1934 and of Section 162(m) of the Internal Revenue
  Code of 1986, as amended, and shall be interpreted in a manner consistent with the requirements thereof, as now or hereafter construed, interpreted and applied by regulations, rulings and cases.

2. Definitions.

As used in this Plan, the following words and phrases shall have the meanings indicated below:

(a) “Agreement” shall mean a written agreement entered into between the Company and an Optionee in connection with an award under the Plan.

(b) “Board” shall mean the Board of Directors of the Company.

(c) “Cause,” when used in connection with the termination of an Optionee’s employment by the Company or the cessation of an Optionee’s service as a consultant or a member of the Board,
  shall mean (i) the conviction of the Optionee for the commission of a felony, or (ii) the willful and continued failure by the Optionee substantially to perform his duties and obligations to the
  Company or a Subsidiary (other than any such failure resulting from his incapacity due to physical or mental illness), or (iii) the willful engaging by the Optionee in misconduct that is demonstrably
  injurious to the Company or a Subsidiary. For purposes of this Section 2(c), no act, or failure to act, on an Optionee’s part shall be considered “willful” unless done, or omitted to be done, by the
  Optionee in bad faith and without reasonable belief that his action or omission was in the best interest of the Company. The Committee shall determine whether a termination of employment is for
  Cause for purposes of the Plan.

(d) “Change in Control” shall mean the occurrence of the event set forth in any of the following paragraphs:

(i) any Person (as defined below) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of
  the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 50% or more of the combined
  voting power of the Company’s then outstanding securities; or

(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new
  director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the
  election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least
  two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or
  recommended; or

(iii) there is consummated a merger or consolidation of the Company or a direct or indirect subsidiary thereof with any other corporation, other than (A) a merger or consolidation which
  would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being 

converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit
  plan of the Company, at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or
  consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the beneficial owner, directly or
  indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 50%
  or more of the combined voting power of the Company’s then outstanding securities; or

(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the
  Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the
  combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

For purposes of this Section 2(d), “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term
  shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an
  underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same
  proportions as their ownership of stock of the Company.

(e) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(f) “Committee” shall mean a committee established by the Board to administer the Plan.

(g) “Common Stock” shall mean shares of common stock, no par value, of the Company.

(h) “Company” shall mean Vaughan Foods, Inc., a corporation organized under the laws of the State of Oklahoma, or any successor corporation.

(i) “Disability” shall mean an Optionee’s inability to perform his duties with the Company or on the Board by reason of any medically determinable physical or mental impairment, as determined
  by a physician selected by the Optionee and acceptable to the Company.

(j) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and as now or hereafter construed, interpreted and applied by regulations, rulings and cases.

(k) “Fair Market Value” per share as of a particular date shall mean

(i) if the shares of Common Stock are then listed on a national securities exchange, the closing sales price per share of Common Stock on the national securities exchange on which the
  Common Stock is principally traded for the last preceding date on which there was a sale of such Common Stock on such exchange, or

(ii) if the shares of Common Stock are then traded in an over-the-counter market, the closing bid price for the shares of Common Stock in such over-the-counter market for the last
  preceding date on which there was a sale of such Common Stock in such market, or

(iii) if the shares of Common Stock are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, shall
  determine.

(l) “Incentive Stock Option” shall mean any option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code.

(m) “Nonemployee Director” shall mean a member of the Board who is not an employee of the Company.

(n) “Nonqualified Option” shall mean an Option that is not an Incentive Stock Option.

(o) “Option” shall mean the right, granted hereunder, to purchase shares of Common Stock. Options granted by the Committee pursuant to the Plan may constitute either Incentive Stock
  Options or Nonqualified Stock Options.

(p) “Optionee” shall mean a person who receives a grant of an Option.

(q) “Option Price” shall mean the exercise price of the shares of Common Stock covered by an Option.

(r) “Parent” shall mean any company (other than the Company) in an unbroken chain of companies ending with the Company if, at the time of granting an Option, each of the companies other
  than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain.

(s) “Plan” shall mean this Vaughan Foods, Inc. 2006 Equity Incentive Plan.

(t) “Rule 16b-3” shall mean Rule 16b-3, as from time to time in effect, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act, including any successor
  to such Rule.

(u) “Subsidiary” shall mean any company (other than the Company) in an unbroken chain of companies beginning with the Company if, at the time of granting an Option, each of the companies
  other than the last company in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such
  chain.

(v) “Ten Percent Stockholder” shall mean an Optionee who, at the time an Incentive Stock Option is granted, owns (or is deemed to own pursuant to the attribution rules of 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 any Parent or Subsidiary.

3. Administration.

The Plan, except as may otherwise be determined by the Board, shall be administered by the Committee, the members of which shall be “nonemployee directors” under Rule 16b-3 and “outside
  directors” under Section 162(m) of the Code.

The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and
  authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Options; to determine which
  Options shall constitute Incentive Stock Options and which Options shall constitute Nonqualified Stock Options; to determine the purchase price of the shares of Common Stock covered by each
  Option; to determine the persons to whom, and the time or times at which awards shall be granted; to determine the number of shares to be covered by each award; to interpret the Plan; to
  prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the Agreements (which need not be identical) and to cancel or suspend awards, as
  necessary; and to make all other determinations deemed necessary or advisable for the administration of the Plan.

The Committee may not delegate its authority to grant Options. The Committee may employ one or more persons to render advice with respect to any responsibility the Committee may have
  under the Plan. The Board shall have sole authority, unless expressly delegated to the Committee, to grant Options to Nonemployee Directors. All decisions, determination and interpretations of the
  Committee shall be final and binding on all Optionees of any awards under this Plan.

The Board shall have the authority to fill all vacancies, however caused, in the Committee. The Board may from time to time appoint additional members to the Committee, and may at any time
  remove one or more Committee members. One member of the Committee shall be selected by the Board as chairman. The Committee shall hold its meetings at such times and places as it shall
  deem advisable. All determinations of the Committee shall be made by a majority of its members either present in person or participating by conference telephone at a meeting or by written consent.
  The Committee may appoint a secretary and make such rules and regulations for the conduct of its business as it shall deem advisable, and shall keep minutes of its meetings.

No member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any award granted hereunder.

4. Eligibility.

Awards may be granted to officers and other key employees of and consultants to the Company, and its Subsidiaries, including officers and directors who are employees, and to Nonemployee
  Directors. In determining the persons to whom awards shall be granted and the number of shares to be covered by each award, the Committee shall take into account the duties of the respective
  persons, their present and potential contributions to the success of the Company and such other factors as the Committee shall deem relevant in connection with accomplishing the purpose of the
  Plan.

5. Stock.

The maximum number of shares of Common Stock reserved for the grant of awards under the Plan shall be 1,000,000, subject to adjustment as provided in Section 9 hereof. Such shares may, in
  whole or in part, be authorized but unissued shares or shares that shall have been or may be reacquired by the Company.

If any outstanding award under the Plan should for any reason expire, be canceled or be forfeited without having been exercised in full, the shares of Common Stock allocable to the unexercised,
  canceled or terminated portion of such award shall (unless the Plan shall have been terminated) become available for subsequent grants of awards under the Plan.

6. Terms and Conditions of Options.

Each Option granted pursuant to the Plan shall be evidenced by an Agreement, in such form and containing such terms and conditions as the Committee shall from time to time approve, which
  Agreement shall comply with and be subject to the following terms and conditions, unless otherwise specifically provided in such Option Agreement:

(a) Number of Shares. Each Option Agreement shall state the number of shares of Common Stock to which the Option relates.

(b) Type of Option. Each Option Agreement shall specifically state that the Option constitutes an Incentive Stock Option or a Nonqualified Stock Option.

(c) Option Price. Each Option Agreement shall state the Option Price, which shall not be less than one hundred percent (100%) of the Fair Market Value of the shares of Common Stock
  covered by the Option on the date of grant unless, with respect to Nonqualified Stock Options, otherwise determined by the Committee. The Option Price shall be subject to adjustment as provided
  in Section 9 hereof. The date as of which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted, unless such resolution specifies
  a different date.

(d) Medium and Time of Payment. The Option Price shall be paid in full, at the time of exercise, in cash.

(e) Exercise Schedule and Period of Options. Each Option Agreement shall provide the exercise schedule for the Option as determined by the Committee; provided, however, that, the
  Committee shall have the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate. The exercise
  period shall be ten (10) years from the date of the grant of the Option unless otherwise determined by the Committee; provided, however, that, in the case of an Incentive Stock Option, such
  exercise period shall not exceed ten (10) years from the date of grant of such Option. The exercise period shall be subject to earlier termination as provided in Sections 6(f) and 6(g) hereof. An
  Option may be exercised, as to any or all full shares of Common Stock as to which the Option has become exercisable, by written notice delivered in person or by mail to the Secretary of the
  Company, specifying the number of shares of Common Stock with respect to which the Option is being exercised.

(f) Termination. Except as provided in this Section 6(f) and in Section 6(g) hereof, an Option may not be exercised unless (i) with respect to an Optionee who is an employee of the Company,
  the Optionee is then in the employ of the Company or a Subsidiary (or a company or a Parent or Subsidiary company of such company issuing or assuming the Option in a transaction to which 

Section 424(a) of the Code applies), and unless the Optionee has remained continuously so employed since the date of grant of the Option and (ii) with respect to an Optionee who is a
  Nonemployee Director, the Optionee is then serving as a member of the Board or as a member of a board of directors of a company or a Parent or Subsidiary company of such company issuing or
  assuming the Option. In the event that the employment of an Optionee shall terminate or the service of an Optionee as a member of the Board shall cease (other than by reason of death, disability,
  or Cause), all Options of such Optionee that are exercisable at the time of such termination may, unless earlier terminated in accordance with their terms, be exercised within ninety (90) days after
  the date of such termination or service (or such different period as the Committee shall prescribe).

(g) Death or Disability of Optionee. If an Optionee shall die while employed by the Company or a Subsidiary or serving as a member of the Board, or within ninety (90) days after the date of
  termination of such Optionee’s employment or cessation of such Optionee’s service (or within such different period as the Committee may have provided pursuant to Section 6(f) hereof), or if the
  Optionee’s employment shall terminate or service shall cease by reason of Disability, all Options theretofore granted to such Optionee (to the extent otherwise exercisable) may, unless earlier
  terminated in accordance with their terms, be exercised by the Optionee or by his beneficiary, at any time within one year after the death or Disability of the Optionee (or such different period as
  the Committee shall prescribe). In the event that an Option granted hereunder shall be exercised by the legal representatives of a deceased or former Optionee, written notice of such exercise shall
  be accompanied by a certified copy of letters testamentary or equivalent proof of the right of such legal representative to exercise such Option. Unless otherwise determined by the Committee,
  Options not otherwise exercisable on the date of termination of employment shall be forfeited as of such date.

(h) Other Provisions. The Option Agreements evidencing awards under the Plan shall contain such other terms and conditions not inconsistent with the Plan as the Committee may determine,
  including penalties for the commission of competitive acts.

7. Nonqualified Stock Options.

Options granted pursuant to this Section 7 are intended to constitute Nonqualified Stock Options and shall be subject only to the general terms and conditions specified in Section 6 hereof.

8. Incentive Stock Options.

Options granted pursuant to this Section 8 are intended to constitute Incentive Stock Options and shall be subject to the following special terms and conditions, in addition to the general terms
  and conditions specified in Section 6 hereof. An Incentive Stock Option may not be granted to a Nonemployee Director or a consultant to the Company.

(a) Value of Shares. The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the shares of Common Stock with respect to which Incentive Stock
  Options granted under this Plan and all other option plans of any subsidiary become exercisable for the first time by each Optionee during any calendar year shall not exceed $100,000.

(b) Ten Percent Stockholder. In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, (i) the Option Price shall not be less than one hundred ten percent (110%) of the
  Fair Market Value of the shares of Common Stock on the date of grant of such Incentive Stock Option, and (ii) the exercise period shall not exceed five (5) years from the date of grant of such
  Incentive Stock Option.

9. Effect of Certain Changes.

(a) In the event of any extraordinary dividend, stock dividend, recapitalization, merger, consolidation, stock split, warrant or rights issuance, or combination or exchange of such shares, or other
  similar transactions, each of the number of shares of Common Stock available for awards, the number of such shares covered by outstanding awards, and the price per share of Options, as
  appropriate, shall be equitably adjusted by the Committee to reflect such event and preserve the value of such awards.

(b) Upon the occurrence of a Change in Control, each Option granted under the Plan and then outstanding but not yet exercisable shall thereupon become fully exercisable.

10. Surrender and Exchange of Awards.

The Committee may permit the voluntary surrender of all or a portion of any Option granted under the Plan or any option granted under any other plan, program or arrangement of the
  Company or any Subsidiary (“Surrendered Option”), to be conditioned upon the granting to the Optionee of a new Option for the same number of shares of Common Stock as the Surrendered
  Option, or may require such voluntary surrender as a condition precedent to a grant of a new Option to such Optionee. Subject to the provisions of the Plan, such new Option may be an Incentive
  Stock Option or a Nonqualified Stock Option, and shall be exercisable at the price, during such period and on such other terms and conditions as are specified by the Committee at the time the new
  Option is granted.

11. Period During Which Awards May Be Granted.

Awards may be granted pursuant to the Plan from time to time within a period of ten (10) years from the date the Plan is adopted by the Board, or the date the Plan is approved by the
  shareholders of the Company, whichever is earlier, unless the Board shall terminate the Plan at an earlier date.

12. Nontransferability of Awards.

Except as otherwise determined by the Committee, awards granted under the Plan shall not be transferable otherwise than by will or by the laws of descent and distribution, and awards may be
  exercised or otherwise realized, during the lifetime of the Optionee, only by the Optionee or by his guardian or legal representative.

13. Approval of Shareholders.

The Plan shall take effect upon its adoption by the Board and shall terminate on the tenth anniversary of such date, but the Plan (and any grants of awards made prior to the shareholder
  approval mentioned herein) shall be subject to the approval of Company’s shareholders, which approval must occur within twelve months of the date the Plan is adopted by the Board.

14. Agreement by Optionee Regarding Withholding Taxes.

If the Committee shall so require, as a condition of exercise of a Nonqualified Stock Option (a “Tax Event”), each Optionee who is not a Nonemployee Director shall agree that no later than
  the date of the Tax Event, such Optionee will pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by
  law to be withheld upon the Tax Event. Alternatively, the Committee may provide that such an Optionee may elect, to the extent permitted or required by law, to have the Company deduct federal,
  state and local taxes of any kind required by law to be withheld upon the Tax Event from any payment of any kind due the Optionee. The withholding obligation may be satisfied by the withholding
  or delivery of Common Stock. Any decision made by the Committee under this Section 15 shall be made in its sole discretion.

15. Amendment and Termination of the Plan.

The Board at any time and from time to time may suspend, terminate, modify or amend the Plan; provided, however, that, unless otherwise determined by the Board, an amendment that
  requires stockholder approval in order for the Plan to continue to comply with Rule 16b-3, Section 162(m) of the Code or any other law, regulation or stock exchange requirement shall not be
  effective unless approved by the requisite vote of stockholders. Except as provided in Section 9(a) hereof, no suspension, termination, modification or amendment of the Plan may adversely affect any
  award previously granted, unless the written consent of the Optionee is obtained.

16. Rights as a Shareholder.

An Optionee or a transferee of an award shall have no rights as a shareholder with respect to any shares covered by the award until the date of the issuance of a stock certificate to him for such
  shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date
  such stock certificate is issued, except as provided in Section 9(a) hereof.

17. No Rights to Employment or Service as a Director or Consultant.

Nothing in the Plan or in any award granted or Agreement entered into pursuant hereto shall confer upon any Optionee the right to continue in the employ of the Company or any Subsidiary or
  as a member of the Board or a consultant to the Company or any Subsidiary or to be entitled to any remuneration or benefits not set forth in the Plan or such Agreement or to interfere with or
  limit in any way the right of the Company or any such Subsidiary to terminate such Optionee’s employment or service. Awards granted under the Plan shall not be affected by any change in duties
  or position of an employee Optionee as long as such Optionee continues to be employed by the Company or any Subsidiary.

18. Beneficiary.

An Optionee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such
  designation. If no designated beneficiary survives the Optionee, the executor or administrator of the Optionee’s estate shall be deemed to be the Optionee’s beneficiary.

19. Governing Law.

The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Oklahoma.

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