Document:

Exhibit 10.01

                                 NCT Group, Inc.
                          2001 Stock and Incentive Plan
                  (as amended and restated as of June 28, 2005)

1.   Purpose.

The purpose of the NCT Group, Inc. 2001 Stock and Incentive Plan (the "Plan") is
to furnish a material  incentive to employees,  directors and consultants of the
Company and its  Subsidiaries by making available to them the benefits of Common
Stock ownership in the Company through stock options,  awards and otherwise.  It
is believed that these increased  incentives stimulate the efforts of employees,
directors and consultants  towards the continued  success of the Company and its
Subsidiaries, as well as assist in the recruitment of new employees.

2.   Administration.

The Plan shall be administered  and interpreted by the  Compensation  Committee,
consisting  of not less than two persons  appointed by the Board of Directors of
the  Company  from among its  members.  A person  may serve on the  Compensation
Committee  only if he or she (i) is a  "Non-employee  Director"  for purposes of
Rule 16b-3 under the  Securities  Exchange  Act of 1934,  as amended  (the "1934
Act"); and (ii) satisfies the requirements of an "outside director" for purposes
of Section 162(m) of the Internal Revenue Code. The Compensation  Committee may,
in its sole and absolute discretion,  and subject to the provisions of the Plan,
from time to time establish  such rules and  regulations to administer the Plan,
and delegate any or all of its  authority  to  administer  the Plan to any other
persons  or  committees  as it deems  necessary  or  appropriate  for the proper
administration  of the Plan, except that no such delegation shall be made in the
case of stock options or awards intended to be qualified under Section 162(m) of
the Internal  Revenue Code. The decisions of the  Compensation  Committee or its
authorized  designee (the "Committee") shall be final,  conclusive,  and binding
with respect to the  interpretation and administration of the Plan and any grant
made  under  it.  The  Committee  shall  make,  in  its  sole  discretion,   all
determinations arising in the administration,  construction or interpretation of
the Plan and stock  options and awards under the Plan (other than stock  options
and awards granted to non-employee directors or outside consultants, which shall
be  determined  by the Board of  Directors),  including  the  right to  construe
disputed or doubtful Plan,  stock option or award terms and provisions,  and any
such  determination  shall be conclusive  and binding on all persons,  except as
otherwise  provided by law.  No member of the  Compensation  Committee  shall be
liable for any action  taken or  determination  made  hereunder  in good  faith.
Service on the Compensation  Committee shall constitute service as a director of
the Company so that all members of the Compensation  Committee shall be entitled
to indemnification and reimbursement as directors of the Company pursuant to its
certificate of incorporation.

3.   Total Number of Shares.

Subject to the provisions of Section 8(b), the maximum amount of stock which may
be  issued  under the Plan is  618,000,000  shares  of the  Common  Stock of the
Company.  No participant  under this Plan shall be granted (i) options or awards
which could result in such participant  receiving in any calendar year more than
20% of the maximum  number of shares  which may be issued  under the Plan as set
forth in the  previous  sentence,  (ii) any option or award if such  participant
owns more than ten  percent of the stock of the  Company  within the  meaning of
Section 422 of the Internal  Revenue Code;  or (ii) any  Incentive  Stock Option
which would  result in such  participant  receiving a grant of  Incentive  Stock
Options for stock that would have an  aggregate  fair market  value in excess of
$100,000,  determined  as of the time that the option is granted,  that would be
exercisable for the first time by such participant during any calendar year.

Any shares  which are not  purchased  or awarded  under an option or other award
which has terminated,  been surrendered back to the Company or lapsed, either by
its terms or pursuant to the exercise, in whole or in part, of an award or right
granted under the Plan, may be used for further grant of options or awards.

4.   Participation in Plan.

(a)  Employees.  All  employees  of the  Company  or its  Subsidiaries  shall be
eligible to  participate in this Plan.  From time to time,  the Committee  shall
determine which employees shall be granted options, stock awards or other awards
under the Plan, the number of shares of Common Stock to be made subject  thereto
granted to each such  employee

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and the terms and conditions of such options, consistent with the Plan. Upon the
selection  of an employee to be granted an option  pursuant to the terms of this
Plan,  the Committee  shall  instruct the Secretary to issue such option and may
impose such conditions on the grant of such option as it deems  appropriate.  No
Incentive  Stock  Option  shall be granted to any person who is not an employee.
Nothing  in the Plan shall  interfere  with or limit in any way the right of the
Company or any Subsidiary to terminate any participant's employment at any time,
nor  confer  upon any  participant  any right to  continue  in the employ of the
Company or any  Subsidiary.  No employee  shall have the right to be selected to
receive an option or other award under this Plan or having been so selected,  to
be selected to receive a future award grant or option. Neither the award nor any
benefits  arising  out of this Plan  shall  constitute  part of a  participant's
employment  contract with the Company or any Subsidiary and,  accordingly,  this
Plan and the benefits  hereunder  may be  terminated at any time in the sole and
exclusive discretion of the Company without giving rise to liability on the part
of the Company or any Subsidiary for severance  payments.  The awards under this
Plan are not intended to be treated as  compensation  for any purpose  under any
other Company plan, benefit or arrangement.  For any and all purposes under this
Plan,  the term  "employee"  shall not include a person hired as an  independent
contractor,  leased employee, consultant or a person otherwise designated by the
Company  at the  time of hire  as not  eligible  to  participate  in or  receive
benefits  under  the  Plan,  even  if such  ineligible  person  is  subsequently
determined to be an "employee" by any governmental or judicial authority.

(b)  Non-Employees.  Non-employee  directors  and  consultants  (who are natural
persons) of the Company shall be eligible to participate in this Plan. From time
to time, the Board of Directors shall determine which non-employee directors and
consultants  shall be granted  options,  stock  awards or other awards under the
Plan, the number of shares of Common Stock to be made subject  thereto,  and the
terms  and  conditions  of such  options,  consistent  with the  Plan.  Upon the
selection of a  non-employee  director or  consultant to be granted an option or
award pursuant to the terms of this Plan, the Board of Directors  shall instruct
the  Secretary to issue such option and may impose such  conditions on the grant
of such option as it deems appropriate.  Non-employee  directors and consultants
shall not be granted Incentive Stock Options.

5.   Term of Plan.

No option or stock  award with  respect to shares  shall be granted  pursuant to
this Plan after April 24, 2011, but the exercise of options or other awards, and
restrictions on options or awards, may extend beyond such date.

6.   Terms and Conditions of Options.

Except as  expressly  provided in the Plan,  all  options  under the Plan may be
granted  in  either or both  Incentive  Stock  Options  or  non-qualified  stock
options.  All options granted  hereunder shall be subject to the following terms
and conditions:

(a)  Option Price.  The option price per share shall be set by the Committee (or
the Board of Directors, in the case of options granted to non-employee directors
or  consultants);  provided,  however,  that in the case of an  Incentive  Stock
Option, the price per share shall be not less than 100% of the fair market value
of the Common  Stock on the date the option is  granted,  as  determined  by the
Committee  or the  Board  of  Directors  (as  applicable),  in  accordance  with
applicable  provisions  of the Internal  Revenue  Code and  Treasury  Department
rulings and regulations thereunder.

(b)  Number of  Shares.  The  option  shall state the number of shares of Common
Stock covered thereby.

(c)  Exercise of Option.  The granting of an option imposes no obligation on the
optionee to exercise such option. Each option shall become exercisable according
to the terms of this Plan; provided, however, that by a resolution adopted after
an option is granted,  the Committee (or the Board of Directors,  in the case of
an  non-employee  director  or  outside  consultant)  may,  on  such  terms  and
conditions as it may determine to be  appropriate,  accelerate the time at which
such  option or any  portion  thereof  may be  exercised.  Except  as  otherwise
provided in this Plan or as expressly approved in each instance by the Committee
(or the Board of  Directors,  in the case of  options  granted  to  non-employee
directors or  consultants),  no portion of an option which is  unexercisable  at
termination of employment,  directorship  or consultancy,  as applicable,  shall
thereafter  become  exercisable.  An  option  will be  deemed  exercised  by the
optionee,  or in the event of death,  an option will be deemed  exercised by the
estate of the optionee or by a person who  acquired  the right to exercise  such
option by bequest or inheritance or by reason of the death of the optionee, upon
delivery of (i) a notice of exercise to the Company or its representative, or by
using  other

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<PAGE>

methods of notice as the Committee shall adopt; and (ii) accompanying payment of
the option price in accordance with any  restrictions the Committee shall adopt.
The notice of exercise, once delivered, shall be irrevocable.

(d)  Term of Option.  The Committee  (or the Board of  Directors, in the case of
options  granted to non-employee  directors or consultants)  shall determine the
option exercise  period of each stock option.  The exercise period for Incentive
Stock  Options  shall not exceed ten years from the grant date. A  non-qualified
stock option may be  exercisable  for a period of up to ten years and six months
so as to conform with or take advantage of governmental  requirements,  statutes
or regulations.

(e)  First Exercisable Date; Partial Exercise.  No option or any portion thereof
may be exercised except as specified in the option;  provided,  however,  in the
event that the Board of  Directors of the Company  determines  that a "Change of
Control" of the Company has  occurred or will occur,  as that term is defined in
Section  8(e),  any options or awards that are not  exercisable  or vested shall
become  exercisable or vested as of the Change of Control,  and further provided
that the  Committee  may in its  discretion  make any  options  that are not yet
exercisable  immediately exercisable (i) where an optionee's employment is to be
terminated due to a divestiture or downsizing of a business; (ii) in the case of
a retiring optionee who holds options with extended vesting provisions; or (iii)
otherwise,  where the Committee  determines  that such action is  appropriate to
prevent  inequities  with respect to an  optionee.  At any time and from time to
time prior to the time when the option  becomes  unexercisable  under this Plan,
the  exercisable  portion  of an option  may be  exercised  in whole or in part;
provided,  however,  that the Company shall not be required to issue  fractional
shares  and the  Committee  (or the Board of  Directors,  in the case of options
granted to  non-employee  directors  or  consultants)  may,  by the terms of the
option,  require any partial  exercise to exceed a specified  minimum  number of
shares.

(f)  Termination of Option.  All options shall terminate upon their  expiration,
upon their surrender, upon breach by the optionee of any provision of the option
or in accordance with any other rules and procedures incorporated into the terms
and  conditions  governing  the  options  as the  Committee  (or  the  Board  of
Directors,  in  the  case  of  options  granted  to  non-employee  directors  or
consultants) shall deem advisable or appropriate.

(g)  Incorporation  by Reference.  The option shall contain a provision that all
the applicable  terms and conditions of this Plan are  incorporated by reference
therein.

(h)  Other Provisions.  The option shall also be subject to such other terms and
conditions as the  Committee (or the Board of Directors,  in the case of options
granted to  non-employee  directors  or  consultants)  shall deem  advisable  or
appropriate,  consistent with the provisions of the Plan as herein set forth. In
addition, the Incentive Stock Options shall contain such other provisions as may
be necessary to meet the  requirements of the Internal Revenue Code and Treasury
Department  rulings and regulations  issued thereunder with respect to Incentive
Stock  Options.  An  Incentive  Stock  Option  which  fails  to meet  any of the
requirements  set forth in this Plan,  the option or Section 422 of the Internal
Revenue Code shall be a non-qualified stock option.

7.   Stock Awards.

Stock  awards will  consist of shares of Common  Stock of the Company  issued to
participants.  Each stock award to a  participant  may  provide  that the shares
subject to such award may not be  transferred  or  otherwise  disposed of by the
participant  prior to the  expiration of a period or periods  specified  therein
(except  that the award or the  Committee  may permit the earlier  lapse of such
restriction in the event of the  participant's  death,  disability or retirement
pursuant to any pension or retirement  plan  maintained by the Company or any of
its Subsidiaries). Any stock award containing any such restriction shall provide
that the Company shall have the right to reacquire such shares upon  termination
of the  participant's  employment with the Company while such  restriction is in
effect,  such reacquisition to be upon the terms and conditions  provided in the
award.  Stock awards shall also be subject to such other terms and conditions as
the Committee shall deem advisable or appropriate consistent with the provisions
of the Plan as herein set forth.  Notwithstanding  anything  in this Plan to the
Contrary,  the maximum  amount of stock  awards  which may be issued  under this
Section 7 shall not  exceed  15% of the  maximum  number of shares  which may be
issued under the Plan as set forth in the first sentence of Section 3 above.

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<PAGE>

8.   Conditions Applicable to All Options and Awards.

(a)  Issuance of Stock Certificates.  The Company shall not be required to issue
or deliver any  certificate or  certificates  for shares of stock purchased upon
the  exercise of any option or portion  thereof or upon any stock award prior to
fulfillment of all of the following conditions:

     (i) The admission of such shares to listing on any and all stock  exchanges
on which such class of stock is then listed;

     (ii) 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 Committee (or Board of  Directors,  in the case of options  granted to
non-employee  directors or  consultants)  shall,  in its sole  discretion,  deem
necessary or advisable;

     (iii) The  obtaining  of any  approval  other  clearance  from any state or
Federal  governmental agency which the Committee (or the Board of Directors,  in
the case of options granted to an non-employee  directors or consultants) shall,
in its sole discretion, determine to be necessary or advisable; and

     (iv) If  applicable,  the payment in cash by the optionee to the Company of
all amounts which the Company is required to withhold  under  Federal,  state or
local law in  connection  with the  exercise  of an option  upon  request by the
Company.

(b)  Recapitalization.  In the  event of any  change  in the  number  or kind of
outstanding   shares  of   Common   Stock  of  the   Company   by  reason  of  a
recapitalization,    merger,    consolidation,    reorganization,    separation,
liquidation,  stock split,  stock  dividend,  combination of shares or any other
change  in the  corporate  structure  or  shares  of  stock of the  Company,  an
appropriate adjustment will be made, in accordance with applicable provisions of
the  Internal  Revenue  Code and  Treasury  Department  rulings and  regulations
thereunder, in the number and kind of shares for which any options or awards may
thereafter be granted both in the aggregate and as to each optionee,  as well as
in the number and kind of shares theretofore  granted and the price payable.  In
no event  may any  change  be made in an  Incentive  Stock  Option  which  would
constitute a  "modification"  under  Section  424(h)(3) of the Internal  Revenue
Code.  The  Committee  may adjust  awards to preserve  the benefits or potential
benefits of the awards  otherwise in a manner not  inconsistent  with applicable
provisions  of the Internal  Revenue Code and  Treasury  Department  rulings and
regulations thereunder. Action by the Committee may include, without limitation:
(i) adjustment of the number and of kind of shares which may be delivered  under
the  Plan;  (ii)  adjustments  of the  number  and  kind of  shares  subject  to
outstanding  awards;  (iii)  adjustment  of the  exercise  price of  outstanding
options;  and  (iv)  any  other  adjustments  the  Committee  determines  to  be
equitable. Any such determination shall be final and binding on all parties.

(c) Transferability.  Options and awards shall not be transferable other than by
will or the laws of descent and  distribution  and shall be exercisable,  during
the optionee's or grantee's lifetime, only by the optionee or grantee; provided,
however,  that the Committee (or the Board of Directors,  in the case of options
granted to  non-employee  directors or  consultants) in its discretion may grant
(or sanction by way of an amendment to an existing  grant)  non-qualified  stock
options which may be  transferred  by the  optionee,  solely as gifts during the
optionee's  lifetime,  to any member of the optionee's  immediate family or to a
trust  established  for the  exclusive  benefit  of one or more  members  of the
optionee's  immediate  family,  in which case the terms of such option  shall so
state.  As used in this  subsection,  immediate  family  shall mean any  spouse,
child,  stepchild or  grandchild  of an optionee,  and shall  include any of the
foregoing relationships arising from legal adoption.

(d)  Leave of Absence.  If approved by the  Committee,  an employee's absence or
leave because of military or  governmental  service,  disability or other reason
shall not be considered  an  interruption  of employment  for any purpose of the
Plan.

(e) Change of Control. Change of Control shall mean the occurrence of any of the
following  events:  (i) at any time during the  two-year  period  following  the
Effective Date, or the beginning of a renewal term, as the case may be, at least
a  majority  of the  Company's  Board of  Directors  shall  cease to  consist of
"Continuing  Directors"  (meaning  directors  of the  Company  who  either  were
directors at the beginning of such two-year  period or who  subsequently  became
directors  and whose  election,  or  nomination  for  election by the  Company's
stockholders,  was

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<PAGE>

approved by a majority of the then Continuing  Directors);  or (ii) any "person"
or "group" (as  determined  for  purposes of Section  13(d)(3) of the 1934 Act),
except any majority-owned Subsidiary of the Company or any employee benefit plan
of the  Company  or any trust  thereunder,  shall  have  acquired,  directly  or
indirectly,  more than 50% of either  (A) the  outstanding  shares of the Common
Stock of the Company or (B) the combined  voting  power of the then  outstanding
voting  securities of the Company  entitled to vote generally in the election of
directors;  or (iii) a merger or consolidation  occurs to which the Company is a
party,  whether  or not the  Company  is the  surviving  corporation,  in  which
outstanding  shares of Common Stock of the Company are converted  into shares of
another  company (other than a conversion  into shares of voting Common Stock of
the successor  corporation or a holding company thereof  representing  more than
50% of the voting power of all capital  stock  thereof  outstanding  immediately
after the merger or consolidation) or other securities (of either the Company or
another  company)  or cash  or  other  property;  or (iv)  the  sale of all,  or
substantially  all, of the Company's  assets occurs;  or (v) the stockholders of
the Company approve a plan of complete liquidation of the Company.

(f) Applicable  Law. Any option or other award shall contain a provision that it
may not be  exercised  at a time when the  exercise  thereof or the  issuance of
shares  thereunder  would  constitute a violation of any Federal or state law or
listing requirements of the New York Stock Exchange, the NASDAQ Stock Market, or
other principal market on which the Company's Common Stock is listed for trading
for  such  shares  or  a  violation  of  the  applicable  laws  of  any  foreign
jurisdiction  where  options or other  awards  are or will be granted  under the
Plan. The provisions of the Plan shall be construed,  regulated and administered
according  to the  laws of the  State  of  Delaware  without  giving  effect  to
principles  of  conflicts  of  laws,  except  to the  extent  superseded  by any
controlling Federal statute.

(g)  Performance  Based Awards.  The  Committee may designate  whether any award
under   Section  7  being   granted  to  any   employee   is   intended   to  be
"performance-based  compensation"  as that term is used in Section 162(m) of the
Internal  Revenue  Code.  Any such awards  designated  to be  "performance-based
compensation" shall be conditioned on the achievement of one or more performance
measures,  to the extent required by Internal  Revenue Code Section 162(m).  The
performance measurers that may be used by the Committee for such awards shall be
based on any one or more of the  following as selected by the  Committee:  Total
shareholder return,  earnings per share growth, increase in revenue, share price
appreciation,  return on assets, return on equity, inventory utilization,  total
asset  utilization and operating  income growth.  For such awards intended to be
"performance-based compensation," the grant of the awards and the established of
the performance measures shall be made during the period required under Internal
Revenue Code Section 162(m).

(h) Tax Withholding. The Company shall have the right to deduct applicable taxes
from any  option or award  payment  and  withhold,  at the time of  delivery  or
vesting of cash or shares of Common Stock under this Plan, an appropriate amount
of cash or number of shares of Common Stock or a combination thereof for payment
of taxes  required by law or to take such other  actions as may be  necessary in
the opinion of the Company to satisfy all  obligations  for  withholding of such
taxes. The Committee may also permit withholding to be satisfied by the transfer
to the Company of shares of Common Stock  theretofore owned by the holder of the
option or award with  respect to which  withholding  is  required.  If shares of
Common  Stock are used to satisfy tax  withholding,  such shares shall be valued
based on the  Common  Stock's  fair  market  value when the tax  withholding  is
required to be made.

(i) Rights as  Stockholders.  The holder of an option shall not be, nor have any
of the rights or privileges  of, a stockholder  of the Company in respect of any
shares  purchasable  upon the exercise of any part of an option unless and until
such holder has entered into a stockholder's  agreement with the Company, if and
as may be required by the Company,  and  certificates  representing  such shares
have been issued by the Company to such holder.

9.   Definitions.

(a)  Board of Directors.  The term "Board of  Directors" shall mean the Board of
Directors of the Company.

(b)  Committee.  The term "Committee"  shall mean the Compensation  Committee or
such other  persons or  committee as referred to in Section 2 hereof to which it
has delegated any authority, as may be appropriate.

(c)  Common Stock.  The term "Common Stock" shall mean the $.01 par value Common
Stock of the Company,  authorized but unissued,  or issued and reacquired by the
Company  and held as  treasury  stock,  or held by any  trust or in any  reserve
established  by  the  Company  for  the  purpose  of  satisfying  the  Company's
obligations for the issuance of Common Stock under the Plan.

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<PAGE>

(d)  Company.  The  term  "Company"  shall  mean NCT  Group,  Inc.,  a  Delaware
corporation, or any successor corporation.

(e)  Effective Date. The effective date shall be April 25, 2001.

(f)  Compensation  Committee.  The term "Compensation  Committee" shall mean the
Compensation  Committee of the Company as constituted by resolution of the Board
of Directors.

(g)  Incentive  Stock  Option.  The term "Incentive  Stock Option" shall mean an
option which  qualifies  under  Section 422 of the Internal  Revenue Code and is
designated an Incentive Stock Option by the Committee.

(h)  Internal  Revenue  Code.  The term  "Internal  Revenue Code" shall mean the
Internal Revenue Code of 1986, as it may be amended from time to time.

(i)  Subsidiary. The term "Subsidiary"  shall  mean a subsidiary  corporation of
the Company as determined by the Committee,  provided, however, that in the case
of Incentive  Stock Options,  such term shall be as defined in Section 424(f) of
the Internal Revenue Code.

10.  Use of Proceeds.

The proceeds received by the Company from the sale of stock under the Plan shall
be  added  to the  general  funds  of the  Company  and  shall  be used for such
corporate purposes as the Board of Directors shall direct.

11.  Amendment and Revocation.

The  Compensation  Committee shall have the right to alter,  amend or revoke the
Plan or any part thereof at any time and from time to time;  provided,  however,
that without the consent of the participants  affected,  unless required by law,
no change  may be made in any  option or award  theretofore  granted  which will
impair  the  rights  of  such  participants,  and  provided  further,  that  the
Compensation  Committee  may not,  without  the  approval  of the  holders  of a
majority of the  outstanding  Common Stock  present in person or by proxy at any
duly called meeting of the stockholders, make any alteration or amendment to the
Plan which  increases the maximum  number of shares of Common Stock which may be
issued  under the Plan or the number of shares of such stock which may be issued
to any one participant,  extends the term of the Plan,  reduces the option price
below that now provided for in the Plan,  materially modifies the eligible class
of employees or effects a change  relating to Incentive  Stock  Options which is
inconsistent  with Section 422 of the Internal  Revenue Code.  The  Compensation
Committee may delegate to another committee, as it may appoint, the authority to
take any action consistent with the terms of the Plan, either before or after an
option or award has been granted,  which such other committee deems necessary or
advisable to comply with any  government  laws or regulatory  requirements  of a
foreign  country,  including  but not limited to modifying or amending the terms
and conditions governing any options or awards or establishing any local country
plans as  sub-plans  to this Plan,  each of which may be attached as an Appendix
hereto.

12.  Compliance with Section 16.

With respect to participants  subject to Section 16 of the 1934 Act ("Members"),
all grants,  awards,  exercises of options and any other  transactions under the
Plan are intended to comply with all applicable  conditions of Rule 16b-3 or its
successors  under the 1934 Act.  To the  extent  that  compliance  with any Plan
provision  applicable  solely to  Members  is not  required  in order to bring a
transaction by Member into  compliance  with Rule 16b-3 or any successor rule or
regulation,  it shall be  deemed  null and void as to such  transaction,  to the
extent permitted by law and deemed advisable by the Committee. To the extent any
provision of the Plan or action by the Committee involving Members is deemed not
to comply with an applicable  condition of Rule 16b-3 or any  successor  rule or
regulation,  it shall be null and void as to Members, to the extent permitted by
law and deemed advisable by the Committee.

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<PAGE>

13.  Effect of Plan Upon Other Option and Compensation Plans.

The adoption of this Plan shall not affect any other  compensation  or incentive
plans in effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company or any  Subsidiary  (a) to establish
any other forms of  incentives  or  compensation  for  directors,  employees  or
consultants  of the  Company  (or any  Subsidiary);  or (b) to grant  or  assume
options  otherwise than under this Plan in connection  with any proper  purpose,
including,  but not by way of limitation,  the grant or assumption of options in
connection with the acquisition by purchase,  lease,  merger,  consolidation  or
otherwise  of the  business,  stock  or  assets  of  any  corporation,  firm  or
association.

14.  Approval of Plan by Stockholders.

This Plan will be  submitted  for the  approval  of the  Company's  stockholders
within twelve months after the date of the Board of Directors'  initial adoption
of this Plan and the Plan and the options  granted  hereunder  will be effective
upon approval by such stockholders as contemplated by Section  280G(b)(5)(A)(ii)
of the  Internal  Revenue  Code and  regulations  thereunder  as if a "change in
control"  occurred  immediately  following  such  approval.  No  option  may  be
exercised  to any extent by anyone  unless and until the Plan is so  approved by
the stockholders,  and if such approval has not been obtained by the end of said
twelve-month  period,  the  Plan  and  all  options  theretofore  granted  shall
thereupon be cancelled and become null and void.

15.  Titles.

Titles are provided herein for convenience  only and are not to serve as a basis
for interpretation or construction of the Plan.

16.  Severability.

In the event any portion of the Plan or any action taken  pursuant  hereto shall
be held illegal or invalid for any reason,  the  illegality or invalidity  shall
not affect the remaining  parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provisions had not been included,  and the
illegal or invalid action shall be null and void.

                                       7EXECUTION COPY

Exhibit 10.17

	

      

    
	TRANSFER AGREEMENT
	 
	BY AND BETWEEN
	 
	AFBS, INC.
	 
	AND
	 
	THERICS, LLC
	

      

    
	June 30, 2005

	

	
TABLE OF CONTENTS

	 

	ARTICLE I	DEFINITIONS 	1
	 	 	 	 
	 	1.1.	Accounts Receivable.	1
	 	1.2.	AFBS.	 1
	 	1.3.	Agreement. 	1
	 	1.4.	Assumed Contracts.	1
	 	1.5. 	Books and Records.	2
	 	1.6.	Business.	2
	 	1.7. 	Closing.	2
	 	1.8. 	Closing Date.	2
	 	1.9.	Consents.	2
	 	1.10.	Contracts.	2
	 	1.11.	Contributed Assets.	2
	 	1.12.	Effective Time.	3
	 	1.13.	Equipment.	3
	 	1.14.	Excluded Assets.	3
	 	1.15.	Governmental Entity.	3
	 	1.16. 	Inventory.	 3
	 	1.17.	IP Transfer Agreement.	3
	 	1.18.	Law or Laws. 	3
	 	1.19.	Liens.	 4
	 	1.20.	Permits. 	4
	 	1.21. 	Post-Closing Liabilities. 	4
	 	1.22.	Retained Liabilities.	 4
	 	1.23.	Tax Return.	5
	 	1.24.	Taxes.	5
	 	1.25.	Therics. 	5
	 	1.26.	Unit Purchase Agreement.	5
			 	 

	ARTICLE II 	TRANSFER 	5
	 	 	 	 
	 	2.1. 	Purchase and Sale; Assignment; Consideration.
	5
	 	2.2.	No Assumption of Retained Liabilities; Post-Closing
Liabilities. 	5
	 	2.3.	Transfer Taxes.	 6
	 	2.4.	Permits.	 6
			 	 

	ARTICLE III  	MISCELLANEOUS 	6
	 	 	 	 
	 	3.1.	Entire Agreement; Amendment.
	6
	 	3.2.	Governing Law.	6
	 	3.3.	Notices.	6
	 	3.4. 	Counterparts; Headings.
	7
	 	3.5.	Binding Effect.
	7
	 	3.6.	Severability.	8
	 	3.7.	Specific Performance.
	8
	 	3.8.	Invoices, Bills, Etc.
	8

	

(i)

	SCHEDULES	 
	 	 
	Schedule 1.4  	Assumed Contracts
	Schedule 1.9	 Consents
	Schedule 1.11	Contributed Assets
	Schedule 1.13	Equipment
	Schedule 1.14	Excluded Assets
	Schedule 1.16	 Inventory
	Schedule 1.20 	Permits

	

(ii)

	
  TRANSFER AGREEMENT
  

                 This TRANSFER AGREEMENT, effective as of June 30, 2005, by and between AFBS, INC., a Virginia corporation
(f/k/a, “Therics, Inc.”) (“AFBS”), and THERICS, LLC, an Ohio limited liability company (“Therics”), recites and provides as follows:

  RECITALS

               WHEREAS, AFBS owns the Contributed Assets (other than the Assumed Contracts) and is a party to the
Assumed Contracts; and

               WHEREAS, AFBS desires to contribute the Contributed Assets (other than the Assumed Contracts) to Therics
and assign the Assumed Contracts to Therics, and in exchange therefor, Therics desires to accept
the Contributed Assets (other than the Assumed Contracts) from AFBS and to assume the Assumed Contracts
from AFBS, all on the terms and subject to the conditions set forth herein; and 

               NOW, THEREFORE, in consideration of the Recitals and of the mutual covenants, conditions and agreements
set forth herein and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, it hereby is agreed that:

AGREEMENT

ARTICLE I
DEFINITIONS

               When used in this Agreement, the following terms shall have the meanings specified:

	 

		1.1.         	Accounts Receivable.

	 
	
               “Accounts Receivable” shall mean the accounts receivable, notes receivable, prepaid expenses,
other rights to payment from customers of AFBS and associated rights of AFBS existing as of, or arising
from the conduct of the business of AFBS prior to, the Effective Time. 

	 

		1.2.         	AFBS.

	 
	
               “AFBS” shall have the meaning set forth in the Preamble hereof.

	 

		1.3.         	Agreement.

	 
	
               “Agreement” shall mean this Transfer Agreement, together with the Schedules attached hereto.

	 

		1.4.         	Assumed Contracts. 

	 
	
               “Assumed Contracts” shall mean the Contracts of AFBS that are specifically listed on Schedule 1.4  attached hereto.

	

	
	 

		1.5.         	Books and Records.

	 
	
               “Books and Records” shall mean the original copies of the books and records of AFBS that
are specifically related to the Contributed Assets and that are in possession of AFBS, and all related
documents, including, without limitation, all customer lists and records, referral sources, research
and development reports and records, service and warranty records, equipment logs, operating guides
and manuals, creative materials, advertising materials, promotional materials, studies, reports,
correspondence and any other similar documents that are specifically related to the Contributed Assets.

	 

		1.6.         	Business.

	 
	
               “Business” shall mean the business and operations of AFBS as operated and conducted prior
to and up through the Effective Time.

	 

		1.7.         	Closing.

	 
	
               “Closing” shall mean the conference held immediately following the execution of this Agreement,
on the Closing Date, at the offices of Hunton & Williams LLP located in Richmond, Virginia at
951 East Byrd Street.

	 

		1.8.         	Closing Date.

	 
	
               “Closing Date” shall mean June 30, 2005.

	 

		1.9.         	Consents.

	 
	
               “Consents” shall mean all consents, approvals and waivers related to the Assumed Contracts
required to be obtained in order to properly and legally assign or convey the same to Therics in
connection with the transactions contemplated by this Agreement, such consents, approvals and waivers
to be obtained by AFBS and each of which is listed on Schedule 1.9  attached hereto.

	 

		1.10.      	Contracts.

	 
	
               “Contracts” shall mean all agreements, contracts, purchase orders, leases, licenses, relationships
and commitments, written or oral, to which AFBS is a party or by which AFBS or its property is bound.

	 

		1.11.      	Contributed Assets.

	 
	
               “Contributed Assets” shall mean the Assumed Contracts, the Books and Records, the Equipment,
the Inventory, the Permits (to the extent assignable) and those other assets of AFBS specifically
identified on Schedule 1.11  attached hereto; provided, however, that notwithstanding the foregoing, the Contributed Assets shall specifically exclude the Excluded
Assets.

	

 2

	
	 

		1.12.	Effective Time.

	 
	
               “Effective Time” shall mean 11:57 p.m. (Eastern Daylight Time) on the Closing Date.

	 

		1.13.	Equipment.

	 
	
               “Equipment” shall mean all of the tangible assets of AFBS including, without limitation,
the tangible assets specifically listed on Schedule 1.13  attached hereto.

	 

		1.14.	Excluded Assets. 

	 
	
               “Excluded Assets” shall mean all assets of AFBS other than the Contributed Assets, including,
but not limited to: (i) all minute books, stock records and corporate seals of AFBS; (ii) all
Contracts other than the Assumed Contracts; (iii) AFBS’s rights under this Agreement and any
other agreements or documents delivered in connection with the transactions contemplated hereby or
by the Unit Purchase Agreement; (iv) cash and cash equivalents, (v) cash deposits and letters of
credit in favor of AFBS; (vi) books and records relating primarily to the Excluded Assets and the
Retained Liabilities, (vii) the Accounts Receivable, (viii) any and all rights to Tax refunds or
credits or any claims for such refund or credits, (ix) all intellectual property assets, it being
understood that certain intellectual property assets shall be transferred from AFBS to Therics pursuant
to the IP Transfer Agreement and any and all goodwill associated with the intellectual property assets
so transferred, (x) all insurance policies, and (xi) those other assets set forth on Schedule 1.14  attached hereto.

	 

		1.15.	Governmental Entity.

	 
	
               “Governmental Entity” shall mean any federal, state, local or foreign legislature, court,
arbitral tribunal, administrative agency or commission or other governmental or other regulatory
authority.

	 

		1.16.	Inventory.

	 
	
               “Inventory” shall mean all the inventories of goods owned by AFBS and held for resale, all
supplies held for use, whether by AFBS, its distributors or otherwise, in the ordinary course of
the business of AFBS, and all work in process including, without limitation, the goods, supplies
and work in process set forth on Schedule 1.16  attached hereto.

	 

		1.17.	 IP Transfer Agreement.

	 
	
               “IP Transfer Agreement” shall mean the Intellectual Property Transfer Agreement contemplated
to be entered into by and between AFBS and Therics immediately following the Effective Time on the
date hereof.

	 

		1.18. 	Law or Laws.

	 
	
               “Law” shall mean any federal, state, local or other law or treaty or governmental requirement
of any kind, and the rules, regulations and orders promulgated thereunder.

	

 3

	
	 

		1.19. 	Liens.

	 
	
               “Liens” shall mean any encumbrance, mortgage, charge, claim, demand, restriction, pledge,
security interest or imposition of any kind or nature. 

	 

		1.20. 	Permits.

	 
	
               “Permits” shall mean all approvals, authorizations, registrations, permits and licenses issued
by a Governmental Entity to or in the name of AFBS, each of which is listed on Schedule 1.20  attached hereto.

	 

		1.21.	 Post-Closing Liabilities.

	 
	
               “Post-Closing Liabilities” shall mean all liabilities and obligations, whether such liabilities
or obligations relate to payment, performance or otherwise, are matured or unmatured, are known or
unknown, are contingent or non-contingent, are fixed or undetermined or are present, future or otherwise,
which relate to the ownership, operation, use, sale, lease or licensing of the Contributed Assets
by Therics after the Effective Time, including, but not limited to, all liabilities and obligations
arising out of, or relating to, any act, occurrence, performance or other event occurring after the
Effective Time under the Assumed Contracts (but excluding any liability or obligation arising out
of or relating to any performance of or breach under the Assumed Contracts which occurred prior to
the Effective Time).

	 

		1.22.	Retained Liabilities.

	 
	
               “Retained Liabilities” shall mean all liabilities and obligations of AFBS and the Business
including, without limitation, those relating to the use of the Contributed Assets prior to the Effective
Time, whether such liabilities or obligations relate to payment, performance or otherwise, arise
before or after the Effective Time, are matured or unmatured, are known or unknown, are contingent
or non-contingent, are fixed or undetermined or are present, future or otherwise, including, without
limitation, (a) all liabilities related to product liabilities claims for products processed
or sold by AFBS, (b) any liability or obligation under any Assumed Contract which arises out
of or relates to any act, occurrence, performance or other event thereunder occurring before the
Effective Time or any breach thereof by AFBS, (c) any liability or obligation with respect to
or arising out of the employment relationship between AFBS and its employees, including without limitation,
those relating to (i) the employees’ employment with AFBS, (ii) the employees’ termination
of employment with AFBS, and (iii) the employees’ compensation, including, without limitation,
any liability or obligation arising under or out of any stock option plan or employee benefit or
compensation plan of AFBS or its shareholder, (d) any liability or obligation arising out of
any legal proceeding against AFBS that is pending as of the Effective Time, (e) any liability
or obligation arising out of or resulting from AFBS’s noncompliance with any Law or any order,
injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Entity,
(f) any liability or obligation relating to any Taxes owed by AFBS, (g) any liability related
to the Excluded Assets or the use of the Contributed Assets prior to the Effective Time, and (h) any
liability or obligation of AFBS under this Agreement or any other document contemplated hereby.

	

 4

	
	 

		1.23.       	Tax Return.

	 
	
               “Tax Return” shall mean any report, return, information statement, payee statement or other
information required to be provided to any Governmental Entity, or otherwise retained, with respect
to Taxes.

	 

		1.24.       	Taxes.

	 
	
               “Taxes” shall mean any federal, state, local or foreign taxes, charges, levies, imposts,
duties, other assessments or similar charges of any kind whatsoever, including interest, penalties
and additions imposed thereon or with respect thereto.

	 

		1.25.       	Therics.

	 
	
               “Therics” shall have the meaning set forth in the Preamble hereof.

	 

		1.26.       	Unit Purchase Agreement.

	 
	
               “Unit Purchase Agreement” shall mean the Unit Purchase Agreement by and between Randall R.
Theken, an Ohio resident, Therics and AFBS, to be entered into effective immediately following the
Effective Time on the date hereof.

ARTICLE II
TRANSFER

	 

		2.1.         	Purchase and Sale; Assignment; Consideration.

	 
	
                              (a)             As of the Effective Time, and upon all of the terms and subject to all of the conditions of this Agreement,
AFBS hereby (a) conveys, transfers and delivers to Therics, and Therics hereby accepts from AFBS,
all of the Contributed Assets (other than the Assumed Contracts), free and clear of all Liens, and
(b) assigns to Therics, and Therics hereby assumes from AFBS, the Assumed Contracts.

                              (b)             In consideration of the transfer, assignment, conveyance and delivery of the Contributed Assets and
the Assumed Contracts by AFBS, as of the Effective Time, Therics hereby (i) assumes the Assumed Contracts
and (ii) issues to AFBS 1,000,000 of its Units, representing 100% of the membership interest of Therics.

	 

		2.2.         	No Assumption of Retained Liabilities; Post-Closing Liabilities.

	 
	
               Therics does not and will not assume any Retained Liabilities or any other liability of AFBS. All of
the Retained Liabilities and other liabilities of AFBS shall remain the sole responsibility of and
shall be retained, paid, performed and discharged solely by AFBS. Notwithstanding anything herein
to the contrary, all of the Post-Closing Liabilities shall be the sole responsibility of Therics.

	

 5

	
	 

		2.3.         	Transfer Taxes.

	 
	
               Therics shall pay all transfer, sales, recording and similar Taxes arising in connection with the transactions
contemplated hereunder, whether such Taxes are imposed on AFBS or Therics. The parties shall cooperate
to comply with all Tax Return requirements for such Taxes and shall provide such documentation and
take such other actions as may be necessary to minimize the amount of any such Taxes. 

	 

		2.4.         	Permits.

	 
	
               At any time or from time to time after the Closing, AFBS shall execute and deliver to Therics such
documents and instruments and provide such materials and information as Therics may reasonably request
to assist Therics in the transfer of the Permits listed on Schedule 1.20 attached hereto from AFBS to Therics or in the application by Therics for new permits or governmental
approvals (with respect to those Permits which can not be assigned) necessary to utilize the Contributed
Assets; provided, however, that in no event will AFBS be responsible for any costs associated with such transfer or application.

ARTICLE III
MISCELLANEOUS

	 

		3.1.         	Entire Agreement; Amendment.

	 
	
               This Agreement and the documents referred to herein and to be delivered pursuant hereto (including
the Unit Purchase Agreement and the IP Transfer Agreement) constitute the entire agreement between
the parties pertaining to the subject matter hereof, and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties, whether oral or written,
and there are no warranties, representations or other agreements between the parties in connection
with the subject matter hereof, except as specifically set forth herein or therein. No amendment,
supplement, modification, waiver or termination of this Agreement shall be binding unless executed
in writing by the party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision of this Agreement, whether or
not similar, nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 

	 

		3.2.         	Governing Law.

	 
	
               This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio
as applied to contracts entered into by Ohio residents and performed entirely in Ohio, without giving
effect to its principles or rules regarding conflicts of laws, other than such principles directing
application of the laws of Ohio.

	 

		3.3.         	Notices.

	 
	
               All communications, notices and disclosures required or permitted by this Agreement shall be in writing
and shall be deemed to have been given when delivered personally or by messenger or one business
day after delivery by reliable overnight delivery service, or when mailed by registered or certified
United States mail, postage prepaid, return receipt requested, or

	

 6

	
when received via telecopy, telex or other electronic transmission, in all cases addressed to
the party for which it is intended at its address set forth below or to such other address as a party
shall have designated by notice in writing to the other party in the manner provided by this Section 3.3:

	 

	If to AFBS:	AFBS, Inc.
	 	c/o Tredegar Corporation
	 	Attention	General Counsel
	 	1100 Boulders Parkway
	 	Richmond, Virginia 23225
	 	Facsimile:  (804) 330-1010

	 

	With a copy (which shall	Hunton & Williams LLP
	not constitute notice) to:	Attention: 	C. Porter Vaughan, III, Esq. and
	 	 	R. Mason Bayler, Jr., Esq.
	 	Riverfront Plaza, East Tower
	 	951 East Byrd Street
	 	Richmond, Virginia 23219-4074
	 	Facsimile:  (804) 788-8218
	 	 
	If to Therics:	Therics, LLC
	 	Attention:	Randall R. Theken
	 	283 East Waterloo Road
	 	Akron, Ohio 44319
	 	Facsimile: (330) 773-7697
	 	 
	With a copy (which shall	Stark & Knoll Co., L.P.A.
	not constitute notice) to:	Attention:	Aaron G. Lepp, Esq.
	 	76 South Main Street, Suite 1512
	 	Akron, Ohio 44308-1824
	 	 Facsimile: (330) 376-6237
	 	 

		3.4.         	Counterparts; Headings.

	 
	
               This Agreement may be executed in several counterparts, each of which shall be deemed an original,
but such counterparts shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience of reference only
and shall not constitute a part hereof.

	 

		3.5.         	Binding Effect.

	 
	
               This Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and
their respective successors and assigns.

	

 7

	
	 

		3.6.         	Severability.

	 
	
               If any provision, clause or part of this Agreement, or the application thereof under certain circumstances,
is held invalid, the remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.

	 

		3.7.         	Specific Performance. 

	 
	
               Therics and AFBS hereby agree that irreparable damage would occur in the event any of the provisions
of this Agreement were not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any other remedy at law or
equity.

	 

		3.8.         	Invoices, Bills, Etc.

	 
	
               Any accounts payable of AFBS or Therics which relate to the Contributed Assets and which are due for
goods or services received by AFBS or Therics both before and after the Effective Time shall be prorated.
Any Taxes with respect to property that are assessed for periods beginning prior to and ending after
the Effective Time shall be prorated. Each party agrees to pay to the other party any amounts received
or reimburse any amounts owed, as the case may be, as a result of any such proration.

[Signature Page Follows]

	

 8

	               IN WITNESS WHEREOF, each party hereto has caused this Transfer Agreement to be executed in its name and, as applicable,
by a duly authorized officer as of the day and year first above written.

	 

	 	AFBS, INC.
	 	 	 
	 	By:	   /s/ W. Hildebrandt Surgner, Jr.
	 	 	

	 	 	W. Hildebrandt Surgner, Jr.
	 	 	Vice President
	 	 	 
	 	THERICS, LLC
	 	 	 
	 	By: 	    AFBS, Inc.
	 	Its: 	    Sole Member
	 	 	 
	 	By:	   /s/ W. Hildebrandt Surgner, Jr.
	 	 	

	 	 	W. Hildebrandt Surgner, Jr.
	 	 	Vice President

	

 9

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