Document:

<PRE>
                          MEMORANDUM OF UNDERSTANDINGS

      THIS MEMORANDUM OF UNDERSTANDINGS  (this  "Agreement") is made and entered
into as of September  3, 2006,  by and between ISAN  Holdings  Ltd.,  an Israeli
company, whose address is 51 David Pinsky street, Haifa ("ISAN"), and Euroweb RE
Corp.,  a Nevada  corporation,  whose  address is 1061 (1)/2 N  Spaulding,  West
Hollywood, CA 90046 ("ERC").

WHEREAS:    ISAN, a company wholly-owned by the Franco family, is engaged in the
            business of real estate  development and promotion and management of
            real estate projects;

WHEREAS:    ERC, a  wholly-owned  subsidiary of Euroweb  International  Corp., a
            Delaware corporation ("Euroweb"), is engaged in the business of real
            estate  development and has available access to funds which could be
            invested to advance real estate projects;

WHEREAS:    the parties  hereto seek to form a joint venture to advance the real
            estate  development  project  entitled  "Hayarkon  Project" (as such
            project is generally described in Exhibit A hereto) (the "Project");
            and

WHEREAS:    the parties desire to enter into a written  agreement  governing the
            affairs of the company to be  established  for carrying on the joint
            venture and the conduct of its business;

      NOW, THEREFORE, for and in consideration of the premises and the covenants
set forth herein, and for other good and valuable  consideration,  the adequacy,
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereby
agree as follows:

I.    The Company

      1.    Formation. Upon entering into this Agreement, the parties organize a
            special  purpose  entity  in the  form of an  Israeli  company  (the
            "Company").

      2.    Purpose and Scope of Business.  The business  purpose of the Company
            shall  be to  engage  solely  in the  following  activities,  all in
            accordance   with  this  Agreement:   (i)   purchasing,   financing,
            developing,  marketing  and  selling the Project and the real estate
            subject thereof,  (ii) performing its obligations  under agreements,
            instruments or other documents to which it is a party, including any
            purchase agreement,  loan agreement, and agreements with contractors
            and consultants in connection  with the Project,  and (iii) engaging
            in those  activities,  including  execution of agreements,  that are
            necessary or desirable to accomplish the foregoing or are incidental
            thereto.

      3.    Ownership.  The  Company  shall be owned in equal  parts by ISAN and
            ERC.  Upon its  formation,  the Company shall issue each of ISAN and
            ERC 50% of the  Company's  shares.  The Company  shall not issue any
            equity  interests or other securities to any third party without the
            written consent of each of ISAN and ERC.

      4.    Shareholders Action. A quorum for any meeting of the shareholders of
            the Company  (which may be held in person or  telephonically)  shall
            require the  participation  of both ISAN and ERC.  Any action of the
            shareholders  of the  Company  (which  may also be taken by  written
            consent) shall require the consent of both ISAN and ERC.

      5.    Board of  Directors.  The Board of  Directors  of the  Company  (the
            "Board of Directors")  shall be initially  comprised of two members,
            one to be  appointed  by ISAN (the  "ISAN  Director")  and one to be
            appointed by ERC (the "ERC Director").  Each shareholder  shall have
            the  right  to  remove  the  director  appointed  by it and fill any
            vacancy  resulting  from such  removal  or the  resignation  of such
            director,  by  appointing a new director who shall be  acceptable by
            both  parties . A quorum for any  meeting of the Board of  Directors
            (which may be held in person or  telephonically)  shall  require the
            participation  of both the ISAN Director and the ERC  Director.  Any
            action of the Board of Directors (which may also be taken by written
            consent) shall require the consent of both the ISAN Director and the
            ERC Director.

<PAGE>

      6.    Management.  The management  and conduct of the day-to-day  business
            and affairs of the Company shall be vested to begin with in ISAN who
            shall be appointed as the general manager of the Company. ISAN shall
            have the right to take all  actions on behalf of the  Company and to
            do all things in  connection  with  managing  the  Company as it may
            reasonably  deem necessary or desirable for the best interest of the
            Project  and  the  Company   (other  than  decisions  with  material
            financial  implications  not  previously  agreed to by the  parties,
            which  shall be  brought  before  the  Board of  Directors.  As such
            agreements  are  generally  described  in  Exhibit  B  added  to the
            establishment documents of the company).

      7.    Deadlock.   In  the  event  that  the  Board  of  Directors  or  the
            shareholders  cannot  reach  a  decision  on a  certain  fundamental
            business or financial  matter (to the extent a board or  shareholder
            action is required  for such  matter  under  applicable  law or this
            Agreement), each party shall have the right to cause such dispute to
            be conclusively  determined by a third party individual who shall be
            selected  by the mutual  agreement  of the  parties  (the  "Deadlock
            Determining  Party").  If the parties cannot come to an agreement on
            the  identity  of the  Determining  Party,  then the  provisions  of
            Section 24 below  shall  apply with  respect  to such  dispute.  The
            expenses  of the  Deadlock  Determining  Party shall be borne by the
            Company.

      8.    Transfer  Restrictions.  Neither  party shall be  permitted to sell,
            transfer or otherwise dispose of its interest in the Company,  other
            than  to  its  wholly-owned  subsidiary  or to an  entity  which  is
            wholly-owned by its current  shareholders (in each case, which shall
            remain so wholly-owned  at all times it holds such interest),  it is
            being  clarified  that nothing  herein shall  prevent ERC or Euroweb
            from doing any  transactions  whatsoever in the share capital of ERC
            (including IPO, spin-off and the like).

      9.    Distributions.  Subject to  restrictions  set forth in any financing
            document entered into by the Company in connection with the Project,
            upon  completion of the Project and  repayment of the  Shareholder's
            Loan (as defined below),  the Company shall distribute its available
            cash  (net  cash  generated  from  sale of the  Project  units  less
            disbursements  and  appropriate  reserves)  to ISAN and ERC based on
            their relative equity interest in the Company.

      10.   Indemnification.  The Company shall  indemnify and hold harmless its
            directors,  officers  and  representatives  to  the  fullest  extent
            permitted  by law,  from and  against  any and all  liabilities  and
            damages (including legal expenses) imposed on or incurred by them in
            any way relating to or arising out of their services to the Company.
            The Company shall purchase an insurance policy providing  directors'
            and officers' liability insurance.

II.   The Project

      11.   Financing.

            a.    ERC  shall  provide  the  financing  for  the  entire  Project
                  (subject  to Section  11d) (the  "Financing").  The  Financing
                  shall  include  (but shall not be limited  to) the cost of the
                  real  estate  of the  Project  and any  improvements,  cost of
                  development  and   construction   of  the  Project,   fees  of
                  subcontractors    of   all   kinds   (including    architects,
                  contractors,   sales  and  marketing  personnel,   appraisers,
                  lawyers and  accountants)  and costs of any other  consultants
                  that may be engaged to work on the Project.

            b.    As part of the Financing,  ERC shall provide the Company, upon
                  its  request,  with  a  shareholder's  loan  (which  shall  be
                  subordinated  only to a bank which will  provide  construction
                  and  development  loan  to the  Company)  in an  amount  of US
                  $4,000,000 or such higher amount agreed to by the parties (the
                  "Shareholder's  Loan").  The Shareholder's Loan shall (i) bear
                  interest in an annual rate of 9% and (ii) be repaid,  together
                  with any interest accrued thereon, only upon the completion of
                  the Project  (following the repayment of any third party debt)
                  or such earlier time as may be decided by the Company  subject
                  to any restrictions in the Company's financing documents.

                                       2
<PAGE>

            c.    As part of the  Financing,  ERC shall provide such  securities
                  and  financial  guarantees as may be required by the financing
                  bank or the seller of the real estate of the Project.

            d.    It is hereby  agreed  that ERC's  obligation  to  provide  the
                  Financing  (including the  Shareholder's  Loan) to the Company
                  shall be subject to the  Company's  reaching an  agreement  in
                  principle  with a bank for the  financing  by such bank of the
                  Project (through a construction loan, a credit arrangement for
                  the  purchase of the real estate  whereby  each of the Company
                  and the bank shall provide half of the purchase  price, or any
                  other manner which is agreed to by the parties).

      12.   Management Services.

            a.    The  management of the Project until its  completion  shall be
                  conducted by ISAN. The management of the Project shall include
                  (but shall not be limited to)  negotiation  and execution of a
                  purchase  agreement  for  the  real  estate  of  the  Project,
                  negotiation   and   execution   of  bank   financing,   hiring
                  subcontractors    of   all   kinds   (including    architects,
                  contractors,   sales  and  marketing   personal,   appraisers,
                  lawyers,  accountants and other consultants),  supervising and
                  managing the  construction  process and marketing and sales of
                  the Project (collectively, the "Management Services").

            b.    It is hereby agreed that any decisions with material financial
                  implications  not previously  agreed to by the parties(as such
                  agreements  are generally  described in Exhibit B added to the
                  establishment  documents  of the  company)  shall  be  brought
                  before the Board of Directors of the Company.

            c.    ERC shall  evaluate from time to time the  performance  of the
                  Management  Services  by ISAN and if, at any  time,  ERC shall
                  reasonably   determine  in  good  faith  that  the  Management
                  Services  are not  satisfactory  to it (based  on  ISAN's  not
                  meeting customary professional  standards),  it shall have the
                  right to appoint a  co-manager  to the  Project who shall have
                  proven  experience  and  knowledge  in  the  construction  and
                  development  business in Israel and who shall be acceptable to
                  both  parties  and  cooperate  in good faith  with  ISAN.  Any
                  dispute  between ISAN and such  co-manager with respect to the
                  management of the Project shall be brought before the Board of
                  Directors.

            d.    In consideration for its Management Services supervising,  the
                  Company  shall pay ISAN a total amount of US $396,000  divided
                  into 24 equal  monthly  payments  starting  the  first  day of
                  construction,  it being clarified that no other fee is or will
                  be paid to ISAN as a "contractor  profit" or for its knowledge
                  or connections.

            e.    It is  hereby  agreed  that  in no  event  ISAN  or any of its
                  officers,  directors,  representatives  or affiliates shall be
                  (or requested to be) held financially responsible for any part
                  of the Financing or  liabilities of the Company or required to
                  provide personal  guarantees in connection with the Project or
                  the Company.

III.  Representations and Warranties of the Parties.

      13.   Representations  and Warranties of ISAN. ISAN hereby  represents and
            warrants that:  (i) this  Agreement has been duly  authorized by all
            necessary  corporate  action  and  constitutes  a valid and  binding
            agreement  enforceable  against ISAN in  accordance  with its terms;
            (ii) ISAN is a company duly organized,  validly existing and in good
            standing  under  the  laws  of the  State  of  Israel,  and  has the
            requisite  corporate power to enter into and perform this Agreement;
            (iii) neither the  execution and delivery of this  Agreement nor the
            consummation of the transactions contemplated hereby will violate or
            result in any  violation of or be in conflict  with or  constitute a
            default under any term of the  organizational  documents of ISAN, or
            be a violation of any law, rules or regulations  applicable to ISAN,
            and will not breach any agreement or  undertaking to which ISAN is a
            party;  and (iv)  ISAN  shall use its  reasonable  best  efforts  to
            complete the Project in a timely,  cost effective,  and economically
            efficient  manner.  ISAN shall use its  reasonable  best  efforts to
            assure that the Project in managed and  completed in  compliance  in
            all material respects with all applicable laws and regulations.

                                       3
<PAGE>

      14.   Representations  and  Warranties of ERC. ERC hereby  represents  and
            warrants that:  (i) this  Agreement has been duly  authorized by all
            necessary  corporate  action  and  constitutes  a valid and  binding
            agreement enforceable against ERC in accordance with its terms; (ii)
            ERC is a  company  duly  organized,  validly  existing  and in  good
            standing  under  the  laws  of the  State  of  Nevada,  and  has the
            requisite  corporate power to enter into and perform this Agreement;
            (iii) neither the  execution and delivery of this  Agreement nor the
            consummation of the transactions contemplated hereby will violate or
            result in any  violation of or be in conflict  with or  constitute a
            default under any term of the organizational documents of ERC, or be
            a violation of any law, rules or regulations  applicable to ERC, and
            will not  breach  any  agreement  or  undertaking  to which ERC is a
            party;  (iv) ERC has  sufficient  funds to provide the Financing and
            such Financing is not subject to conditions not provided herein; and
            (v) ERC has obtained the consent of Euroweb,  its parent company, to
            this Agreement.

      15.   Nature of Transaction.  ERC hereby  acknowledges and agrees that (i)
            the Project and the Financing  involve a substantial  risk,  (ii) it
            has  experience  as  investor  in such  projects  and is  capable of
            evaluating the merits and risks of its investment in the Company and
            the  Project,   (iii)  it  has  conducted  to  its  satisfaction  an
            independent  investigation of the Project (including through outside
            consultants)  and in  making  its  determination  to  invest  in the
            Company and the Project it has relied  solely on the results of such
            independent  investigation and evaluation.  Neither party shall have
            (and each party  hereby  irrevocably  waives) any claim  against the
            other party or any of its directors,  officers,  representatives  or
            affiliates in connection  with the Project  (including its financial
            success  and  the  benefits  derived,  or  expected  to be  derived,
            therefrom or from its investment in the Company).

      16.   Exhibit A. The parties hereby agree and  acknowledge  that Exhibit A
            hereto  reflects  their current  plans,  estimates  and  projections
            regarding  the  Project and there is no  guarantee  that such plans,
            estimates and projections  shall  materialize,  in whole or in part.
            ERC agrees that any development  plans,  cost estimates or forecasts
            that have been  provided  with respect to the Project  (including as
            included  in  Exhibit  A) shall  not be  deemed  representations  or
            warranties of ISAN or its directors,  officers,  representatives  or
            affiliates.

IV.   Miscellaneous

      17.   Detailed Agreement. A detailed agreement shall be signed between the
            parties based upon this Agreement (the "Detailed Agreement") and the
            parties  shall use their  respective  reasonable  efforts to execute
            such Detailed  Agreement  following the  execution  hereof.  For the
            avoidance  of doubt,  it is hereby  acknowledged  and  agreed by the
            parties that, until its substitution by the Detailed Agreement, this
            Agreement  shall be binding on all parties for any and all  purposes
            and shall be considered a full and binding agreement with respect to
            the subject matter hereof .

      18.   Termination.  This  Agreement  shall  terminate and be of no further
            force and effect,  with no liability of any party towards the other,
            upon the  mutual  consent  of all of the  parties  hereto or at such
            earlier  time as (i) the parties  execute  and deliver the  Detailed
            Agreement  or  (ii) a  final  binding  purchase  agreement  for  the
            property  that is the subject  matter of the Project is entered into
            with any purchaser that is not the Company.

      19.   Integration.  This  Agreement  contains  the  entire  agreement  and
            understanding between the parties with respect to the subject matter
            hereof  and  incorporates  and  supersedes  any  and  all  prior  or
            contemporaneous  oral or written  negotiations,  understandings  and
            documents with respect thereto.

                                       4
<PAGE>

      20.   Binding  Nature of  Agreement;  No Third Party  Beneficiaries.  This
            Agreement  shall be binding  upon and inure to the benefit of and be
            enforceable by the parties  hereto or their  successors in interest,
            except as  expressly  otherwise  provided  herein.  Nothing  in this
            Agreement shall convey any rights upon any person or entity which is
            not a party or an assignee of a party to this Agreement.

      21.   Exclusivity.  ISAN shall not initiate or carry on  negotiations  for
            the acquisition, management, development or operation of the Project
            with any  party  other  than ERC  prior to the  termination  of this
            Agreement in accordance with its terms.

      22.   Assignment.  This  Agreement may not be assigned by any party hereto
            without the prior written consent of the other party,  other than to
            its wholly-owned subsidiary or to an entity which is wholly-owned by
            its  current  shareholders  (in each  case,  which  shall  remain so
            wholly-owned  until this Agreement is terminated in accordance  with
            its terms),  it is being clarified that nothing herein shall prevent
            ERC or Euroweb from doing any  transactions  whatsoever in the share
            capital of ERC (including IPO, spin-off and the like).

      23.   Governing Law. This Agreement  shall be governed by and construed in
            accordance with the laws of the State of Israel.

      24.   Negotiation;  Arbitration.  In  the  event  of any  dispute,  claim,
            question, or disagreement arising from or relating to this Agreement
            (including the Project) or the breach thereof, the parties hereto (a
            "Dispute")  shall use their  best  efforts  to settle  the  dispute,
            claim, question, or disagreement. To this effect, they shall consult
            and negotiate with each other in good faith and,  recognizing  their
            mutual  interests and  interests of the Company,  attempt to reach a
            just and equitable solution satisfactory to both parties. If they do
            not reach such solution  within a period of thirty (30) days,  then,
            upon  notice by either  party to the other,  all  Disputes  shall be
            finally  settled by arbitration  (i)  administered  by an arbitrator
            selected  by the  Head  of  the  Israeli  Bar  Association  (ii)  in
            accordance  with  the  Israeli  Arbitration  Law and  (iii)  held in
            Israel.  Judgment  on the award  rendered by the  arbitrator  may be
            entered in any court having  jurisdiction  thereof.  The expenses of
            the  arbitrator  shall be  initially  borne by the  Company and then
            repaid to it upon final  settlement  of the  Dispute by the party so
            determined by the arbitrator.

      25.   Jurisdiction.  ERC hereby submits to the exclusive  jurisdiction  of
            the courts located in Tel-Aviv,  Israel, for purposes of issuing any
            pre-arbitral  injunction or other  preliminary  relief,  an order to
            compel arbitration or other order in aid of arbitration  proceedings
            (collectively,  "Relief  Order").  ISAN  shall  have  the  right  to
            commence any  proceeding for purposes of issuing any Relief Order in
            any court of competent jurisdiction in Israel or the US. The parties
            hereby  irrevocably  waive any objection  which they may have to the
            courts  being  nominated  as the  forum to hear and  determine  such
            matters  and  agree  not to  claim  that  any  such  court  is not a
            convenient or appropriate forum.

      26.   Service  of  Process.  ERC  agrees  that the  process  by which  any
            arbitration  or court  proceedings  are begun may be served on it by
            being  delivered in connection  therewith in Israel to S. Horowitz &
            Co., 31 Ahad Haam  Street,  Tel-Aviv  65202.  Nothing  herein  shall
            affect the right to serve  process in any other manner  permitted by
            law.

      27.   Amendments.   This  Agreement  may  not  be  amended,   modified  or
            supplemented  except with the  written  approval of each of ISAN and
            ERC.

      28.   Notices.  Any  notice  or  consent  required  or  permitted  by this
            Agreement  shall be in  writing  and sent by  registered  airmail or
            delivered by hand to the other party at its address specified on the
            first page of this Agreement, or to such other address as such party
            may  designate  by notice  given in  accordance  herewith.  Any such
            communications  shall be deemed given five (5)  business  days after
            mailed as aforesaid and immediately upon receipt by messenger.

                                       5
<PAGE>

      29.   Further Actions.  Each party undertakes to execute,  acknowledge and
            deliver all such other acts, deeds,  documents and assurances as may
            be reasonably  requested to effect and consummate  the  transactions
            contemplated  hereby.  The parties shall  cooperate in good faith in
            structuring  the  transactions   contemplated  hereby  in  the  most
            tax-efficient manner for the benefit of both parties.

IN WITNESS  HEREOF,  the parties  have caused this  Agreement to be executed and
delivered as of the date first above written.

ISAN HOLDINGS LTD.

By: /s/ Abbot Franco
Name:   Abbot Franco
Title:  CEO

EUROWEB RE CORP.

By: /s/ Yossi Attia
Name:   Yossi Attia
Title:  CEO

                                       6

<PAGE>

<IMG SRC="v052288ex10-1x1x1.jpg">
</PRE>VA
      SOFTWARE CORPORATION

     

    1998
      STOCK PLAN

     

    NOTICE
      OF GRANT OF STOCK PURCHASE RIGHT

     

    Unless
      otherwise defined herein, the terms defined in the amended and restated 1998
      Stock Plan shall have the same defined meanings in this Notice of Grant of
      Stock
      Purchase Right (the “Notice of Grant”).

     

     

    
      	Grantee:
              	[Name]	 	 
	Address: 	[Address
              Line 1]	 	 
	 	[Address
              Line 2]	 	 

    

     

     

    You
      have
      been granted the right to purchase Common Stock of the Company, subject to
      the
      Company’s Reacquisition Right (as described in the attached Restricted Stock
      Purchase Agreement (the “Agreement”)), as follows:

     

    
      	Date of Grant  	[Date of Grant]
	Price Per
              Share                    	
              $0.001

            
	
              Total
                Number of Shares Subject to Stock Purchase Right

            	[Number of
              Shares]

    

     

    By
      your
      signature and the signature of the Company’s representative below, you and the
      Company agree that this Stock Purchase Right is granted under and governed
      by
      the terms and conditions of the Plan and the Agreement, attached hereto as
      Exhibit A-1,
      both of
      which are made a part of this document. You further agree to execute the
      attached Agreement as a condition to receiving any shares under this Stock
      Purchase Right.

     

     

    
      	GRANTEE:	 	VA
              SOFTWARE CORPORATION	 
	  	
            	  	
            
	Signature	 	By	 
	  	 	  	 
	Print Name	 	Title	 

    

         

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

    

     

    EXHIBIT
      A-1

     

    VA
      SOFTWARE CORPORATION

     

    1998
      STOCK PLAN

     

    RESTRICTED
      STOCK PURCHASE AGREEMENT

     

    Unless
      otherwise defined herein, the terms defined in the Plan shall have the same
      defined meanings in this Restricted Stock Purchase Agreement.

     

    WHEREAS
      the individual named in the Notice of Grant of Stock Purchase Right (the
“Grantee”) is a Service Provider and the Grantee’s continued participation is
      considered by the Company to be important for the Company’s continued growth;
      and

     

    WHEREAS
      in order to give the Grantee an opportunity to acquire an equity interest in
      the
      Company as an incentive for the Grantee to participate in the affairs of the
      Company, the Administrator has granted to the Grantee a Stock Purchase Right
      subject to the terms and conditions of the Plan and the Notice of Grant of
      Stock
      Purchase Right (the “Notice of Grant”), which are incorporated herein by
      reference, and pursuant to this Restricted Stock Purchase Agreement (the
“Agreement”).

     

    NOW
      THEREFORE, the parties agree as follows:

     

    1. Sale
      of Stock.
      The
      Company hereby issues and sells to the Grantee, and the Grantee hereby purchases
      from the Company, for the promise of services to be provided to the Company
      over
      the vesting period set forth in Section 3, below, and as a separate incentive
      in
      connection with his or her employment and not in lieu of any salary or other
      compensation for his or her services, a number of shares of the Company’s Common
      Stock (the “Restricted Stock”) as provided in the Notice of Grant, subject to
      all of the terms and conditions in this Agreement and the Plan. The Company
      and
      Grantee hereby acknowledge and agree that the value of the promise to render
      services over the vesting period set forth in Section 3 is sufficient
      consideration for the purchase of the shares of Restricted Stock and equals
      or
      exceeds the purchase price for such shares.

     

    2. Reacquisition
      Right.
      In the
      event the Grantee ceases to be a Service Provider for any or no reason
      (including death or Disability) before all of the Shares of Restricted Stock
      are
      released from the Company’s Reacquisition Right (see Section 3), all such
      Shares will thereupon be forfeited and automatically transferred to and
      reacquired by the Company at no cost to the Company (the “Reacquisition Right”).
      The Grantee will not be entitled to any compensation for any Shares of
      Restricted Stock returned to the Company pursuant to this Section 2. Upon
      such termination, the Company will become the legal and beneficial owner of
      the
      Shares of Restricted Stock being forfeited and reacquired by the Company and
      all
      rights and interests therein or relating thereto, and the Company will have
      the
      right to retain and transfer to its own name the number of Shares of Restricted
      Stock being reacquired by the Company.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. Release
      of Shares From Reacquisition Right.

     

    (a) Vesting
      Schedule. [INSERT VESTING SCHEDULE]

     

    (b) Unreleased
      Shares.
      Any of
      the Shares that have not yet been released from the Reacquisition Right are
      referred to herein as “Unreleased Shares.”

     

    4. Restriction
      on Transfer.
      Except
      for the escrow described in Section 5 or the transfer of the Shares to the
      Company contemplated by this Agreement, none of the Shares or any beneficial
      interest therein will be transferred, encumbered or otherwise disposed of in
      any
      way until such Shares are released from the Company's Reacquisition Right in
      accordance with the provisions of this Agreement. Any distribution or delivery
      to be made to the Grantee under this Agreement will, if the Grantee is then
      deceased, be made to the Grantee's designated beneficiary, or if no beneficiary
      survives the Grantee, to the administrator or executor of the Grantee's estate.
      Any such transferee must furnish the Company with (a) written notice of his
      or her status as transferee, and (b) evidence satisfactory to the Company
      to establish the validity of the transfer and compliance with any laws or
      regulations pertaining to said transfer.

     

    5. Escrow
      of Shares.

     

    (a) All
      Shares of Restricted Stock will, upon execution of this Agreement, be delivered
      and deposited with an escrow holder designated by the Company (the “Escrow
      Holder”). The Shares of Restricted Stock and stock assignment will be held by
      the Escrow Holder until such time as the Company's Reacquisition Right expires
      or the date the Grantee ceases to be a Service Provider. 

     

    (b) The
      Escrow Holder will not be liable for any act it may do or omit to do with
      respect to holding the Unreleased Shares in escrow while acting in good faith
      and in the exercise of its judgment.

     

    (c) Upon
      the
      Grantee’s termination as a Service Provider for any reason, the Escrow Holder,
      upon receipt of written notice of such termination, will take all steps
      necessary to accomplish the transfer of the Unreleased Shares to the Company.
      The Grantee hereby appoints the Escrow Holder with full power of substitution,
      as the Grantee's true and lawful attorney-in-fact with irrevocable power and
      authority in the name and on behalf of the Grantee to take any action and
      execute all documents and instruments, including, without limitation, stock
      powers which may be necessary to transfer the certificate or certificates
      evidencing such Unreleased Shares to the Company upon such
      termination.

     

    (d) When
      a
      portion of the Shares has been released from the Reacquisition Right, upon
      request, the Escrow Holder will take all steps necessary to accomplish the
      transfer of the Unreleased Shares to the Grantee.

     

    (e) Subject
      to the terms hereof, the Grantee will have all the rights of a shareholder
      with
      respect to the Shares while they are held in escrow, including without
      limitation, the right to vote the Shares and to receive any cash dividends
      declared thereon. 

     

     

     

    
      
        
        

      

      
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    (f) In
      the
      event of any merger, reorganization, consolidation, recapitalization,
      separation, liquidation, stock dividend, split-up, share combination, or other
      change in the corporate structure
      of the Company affecting the Common Stock, the Shares of Restricted Stock will
      be increased, reduced or otherwise changed, and by virtue of any such change
      the
      Grantee will in his capacity as owner of Unreleased Shares that have been
      awarded to him be entitled to new or additional or different shares of stock,
      cash or securities (other than rights or warrants to purchase securities);
      such
      new or additional or different shares, cash or securities will thereupon be
      considered to be Unreleased Shares and will be subject to all of the conditions
      and restrictions which were applicable to the Unreleased Shares pursuant to
      this
      Agreement. If the Grantee receives rights or warrants with respect to any
      Unreleased Shares, such rights or warrants may be held or exercised by the
      Grantee, provided that until such exercise any such rights or warrants and
      after
      such exercise any shares or other securities acquired by the exercise of such
      rights or warrants will be considered to be Unreleased Shares and will be
      subject to all of the conditions and restrictions which were applicable to
      the
      Unreleased Shares pursuant to this Agreement. The Administrator in its absolute
      discretion at any time may accelerate the vesting of all or any portion of
      such
      new or additional shares of stock, cash or securities, rights or warrants to
      purchase securities or shares or other securities acquired by the exercise
      of
      such rights or warrants.

     

    (g) The
      Company may instruct the transfer agent for its Common Stock to place a legend
      on the certificates representing the Restricted Stock or otherwise note its
      records as to the restrictions on transfer set forth in this
      Agreement.

     

    6. Withholding
      of Taxes.
      Notwithstanding any contrary provision of this Agreement, no certificate
      representing the Shares of Restricted Stock may be released from the escrow
      established pursuant to Section 5, unless and until satisfactory
      arrangements (as determined by the Administrator) will have been made by the
      Grantee with respect to the payment of income, employment and other taxes which
      the Company determines must be withheld with respect to such Shares. The
      Administrator, in its sole discretion and pursuant to such procedures as it
      may
      specify from time to time, may permit the Grantee to satisfy such tax
      withholding obligation, in whole or in part by one or more of the following
      (without limitation): (a) paying cash, (b) electing to have the
      Company withhold otherwise deliverable Shares having a Fair Market Value equal
      to the minimum amount required to be withheld, (c) delivering to the
      Company already vested and owned Shares having a Fair Market Value equal to
      the
      amount required to be withheld, or (d) selling a sufficient number of such
      Shares otherwise deliverable to Grantee through such means as the Company may
      determine in its sole discretion (whether through a broker or otherwise) equal
      to the amount required to be withheld. If the Grantee fails to make satisfactory
      arrangements for the payment of any required tax withholding obligations
      hereunder at the time any applicable Shares otherwise are scheduled to vest
      pursuant to Section 3, the Grantee will permanently forfeit such shares and
      the
      shares will be returned to the Company at no cost to the Company.

     

    7. Rights
      as Stockholder.
      Neither
      Grantee nor any person claiming under or through Grantee will have any of the
      rights or privileges of a stockholder of the Company in respect of any Shares
      deliverable hereunder unless and until certificates representing such Shares
      will have been issued, recorded on the records of the Company or its transfer
      agents or registrars, and delivered to Grantee or the Escrow Agent. Except
      as
      provided in Section 5(f), after such issuance, recordation and delivery,
      Grantee will have all the rights of a stockholder of the Company with respect
      to
      voting such Shares and receipt of dividends and distributions on such
      Shares.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    8. Additional
      Conditions to Release from Escrow.
      The
      Company will not be required to issue any certificate or certificates for Shares
      hereunder or release such Shares from the escrow established pursuant to Section
      5 prior to fulfillment of all the following conditions: (a) the admission
      of such Shares to listing on all stock exchanges on which such class of stock
      is
      then listed; (b) the completion of any registration or other qualification
      of such Shares under any state or federal law or under the rulings or
      regulations of the Securities and Exchange Commission or any other governmental
      regulatory body, which the Administrator will, in its absolute discretion,
      deem
      necessary or advisable; (c) the obtaining of any approval or other
      clearance from any state or federal governmental agency, which the Administrator
      will, in its absolute discretion, determine to be necessary or advisable; and
      (d) the lapse of such reasonable period of time following the date of grant
      of the Restricted Stock as the Administrator may establish from time to time
      for
      reasons of administrative convenience. 

     

    9. Legends.
      The
      share certificate evidencing the Shares, if any, issued hereunder shall be
      endorsed with the following legend (in addition to any legend required under
      applicable state securities laws):

     

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
      UPON
      TRANSFER AND RIGHTS OF REACQUISITION AS SET FORTH IN AN AGREEMENT BETWEEN THE
      COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY
      OF
      THE COMPANY.

     

     
      10. General
      Provisions.

     

    (a) This
      Agreement shall be governed by the internal substantive laws, but not the choice
      of law rules of California. This Agreement, subject to the terms and conditions
      of the Plan and the Notice of Grant, represents the entire agreement between
      the
      parties with respect to the purchase of the Shares by the Grantee. Subject
      to
      Section 15(c) of the Plan, in the event of a conflict between the terms and
      conditions of the Plan and the terms and conditions of this Agreement, the
      terms
      and conditions of the Plan shall prevail. Unless otherwise defined herein,
      the
      terms defined in the Plan shall have the same defined meanings in this
      Agreement.

     

    (b) This
      Agreement constitutes the entire understanding of the parties on the subjects
      covered. Grantee expressly warrants that he or she is not accepting this
      Agreement in reliance on any promises, representations, or inducements other
      than those contained herein. Modifications to this Agreement or the Plan can
      be
      made only in an express written contract executed by a duly authorized officer
      of the Company. Notwithstanding anything to the contrary in the Plan or this
      Agreement, the Company reserves the right to revise this Agreement as it deems
      necessary or advisable, in its sole discretion and without the consent of
      Grantee, to comply with Section 409A of the Code or to otherwise avoid
      imposition of any additional tax or income recognition under Section 409A of
      the
      Code in connection to this award of Restricted Stock.

     

    (c) Any
      notice, demand or request required or permitted to be given by either the
      Company or the Grantee pursuant to the terms of this Agreement shall be in
      writing and shall be deemed given when delivered personally or deposited in
      the
      U.S. mail, First Class with postage prepaid,
      and addressed to the parties at the addresses of the parties set forth at the
      end of this Agreement or such other address as a party may request by notifying
      the other in writing.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    Any
      notice to the Escrow Holder shall be sent to the Company’s address with a copy
      to the other party hereto.

     

    (d) The
      rights of the Company under this Agreement shall be transferable to any one
      or
      more persons or entities, and all covenants and agreements hereunder shall
      inure
      to the benefit of, and be enforceable by the Company’s successors and assigns.
      The rights and obligations of the Grantee under this Agreement may only be
      assigned with the prior written consent of the Company.

     

    (e) Either
      party’s failure to enforce any provision of this Agreement shall not in any way
      be construed as a waiver of any such provision, nor prevent that party from
      thereafter enforcing any other provision of this Agreement. The rights granted
      both parties hereunder are cumulative and shall not constitute a waiver of
      either party’s right to assert any other legal remedy available to
      it.

     

    (f) The
      Company may, in its sole discretion, decide to deliver any documents related
      to
      the Shares of Restricted
      Stock awarded
      under the Plan or future Restricted
      Stock that
      may
      be awarded under the Plan by electronic means or request Grantee’s consent to
      participate in the Plan by electronic means. Grantee hereby consents to receive
      such documents by electronic delivery and agrees to participate in the Plan
      through any on-line or electronic system established and maintained by the
      Company or another third party designated by the Company.

     

    (g) The
      Grantee agrees upon request to execute any further documents or instruments
      necessary or desirable to carry out the purposes or intent of this
      Agreement.

     

    (h) GRANTEE
      ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION 3 HEREOF
      IS EARNED ONLY BY CONTINUING SERVICE AS A SERVICE PROVIDER AT THE WILL OF THE
      COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING GRANTEE) AND NOT
      THROUGH THE ACT OF BEING HIRED OR ACQUIRING SHARES HEREUNDER. GRANTEE FURTHER
      ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
      HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
      OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING
      PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH GRANTEE’S RIGHT
      OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING
      GRANTEE)
      TO
      TERMINATE
      GRANTEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
      CAUSE.

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    ASSIGNMENT
      SEPARATE FROM CERTIFICATE

     

    FOR
      VALUE
      RECEIVED I, ____________________, hereby sell, assign and transfer
      unto___________________,
      (__________)
      shares of the Common Stock of VA Software Corporation, standing in my name
      of
      the books of said corporation represented by Certificate No. _____ herewith
      and do hereby irrevocably constitute and appoint
      ________________ to
      transfer the said stock on the books of the within named corporation with full
      power of substitution in the premises.

     

    This
      Stock Assignment may be used only in accordance with the Restricted Stock
      Purchase Agreement (the “Agreement”) between VA Software Corporation and the
      undersigned dated __________________________.

     

    

    Dated:
      _______________, _____

     

    Signature:______________________________

     

    

     

    

     

    

     

    

     

    

     

    

    INSTRUCTIONS:
      Please
      do not fill in any blanks other than the signature line. The purpose of this
      assignment is to enable the Company to exercise the Reacquisition Right, as
      set
      forth in the Agreement, without requiring additional signatures on the part
      of
      the Grantee.

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