Document:

Intellectual Property Security Agreement

 Exhibit 10.3 
 INTELLECTUAL PROPERTY SECURITY AGREEMENT 
 This Intellectual Property Security Agreement is entered
into as of April 3, 2009 by and between Anacomp, Inc. (“Lender”) and Overland Storage, Inc., a California corporation (“Grantor”). 
 RECITALS 
 A. Grantor and Lender are parties to that certain Authorized Service Provider Agreement
between Grantor and Lender dated as of July 1, 2001, as amended (the “Service Agreement”). 
 B. To satisfy payment
obligations under the Service Agreement that were due prior to the date of this Agreement, Grantor has issued to Lender a Promissory Note (the “Note”) in the principal amount of Two Million Three Hundred Eighty-Six Thousand Dollars
($2,386,000), with such Note being secured by that certain Security Agreement between the parties dated as of the same date as the Note (the “Security Agreement”). 
 C. Pursuant to the terms of the Security Agreement, Grantor has granted to Lender a security interest in all of Grantor’s right, title and interest,
whether presently existing or hereafter acquired, in, to and under all of the Collateral as defined in the Security Agreement. Any capitalized terms not defined herein shall have the meanings defined in the Security Agreement. 
 NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and intending to be legally bound, as collateral security
for the prompt and complete payment when due of its obligations under the Loan Documents, Grantor hereby represents, warrants, covenants and agrees as follows: 
 AGREEMENT 
 To secure its Obligations, Grantor grants and pledges to Lender a security interest in
all of Grantor’s right, title and interest, whether now owned or hereafter acquired, in, to and under its intellectual property, copyrights, patents, patent applications, trademarks, know-how, trade secrets, and related goodwill (including
without limitation those Copyrights, Patents and Trademarks listed on Exhibits A, B and C hereto), and including without limitation all proceeds thereof (such as, by way of example but not by way of limitation, license royalties and proceeds of
infringement suits), the right to sue for past, present and future infringements, all rights corresponding thereto throughout the world and all re-issues, divisions continuations, renewals, extensions and continuations-in-part thereof (collectively,
the “Intellectual Property”). Notwithstanding the foregoing, the Snap Intellectual Property is excluded from the Collateral. 
 This security interest is granted in conjunction with the security interest granted to Lender under the Security Agreement. The rights and remedies of Lender with respect to the security interest granted hereby are in addition to those set
forth in the Security Agreement and the other Loan Documents, and those which are now or hereafter available to Lender as a matter of law or equity. Each right, power and remedy of Lender provided for herein or in the Security Agreement or any of
the Loan Documents, or now or hereafter existing at law or in equity shall be cumulative and concurrent and shall be in addition to every right, power or remedy provided for herein and the exercise by Lender of any one or more of the rights, powers
or remedies provided for in this Intellectual Property Security Agreement, the Security Agreement or any of the other Loan Documents, or now or hereafter existing at law or in equity, shall not preclude the simultaneous or later exercise by any
person, including Lender, of any or all other rights, powers or remedies. 
 Grantor confirms that Lender is entitled to, and hereby
authorizes Lender and any representative of Lender as Lender may select in its sole discretion, as Grantor’s true and lawful attorney-in fact to: 
 a. Endorse Grantor’s name on all applications, documents, papers, and instruments necessary or desirable for Lender to give effect to the provisions of this Agreement and the intent of the parties hereto;

 b. Take any other actions with respect to the Intellectual Property, consistent with this Agreement, as
Lender deems in the best interest of Lender solely in order to effectuate the provisions of Agreement; 
 c. Following the occurrence of an
Event of Default under, and subject to the terms and conditions of, the Security Agreement, require and direct that all income, royalties, license fees, damages and other payments payable by any third party with respect to the Intellectual Property
be paid directly to Lender; or 
 d. Following the occurrence of an Event of Default under, and subject to the terms and conditions of, the
Security Agreement, subject to the terms of any existing license agreement, assign, pledge, convey, license or otherwise transfer title in or dispose of any or all of the Intellectual Property to anyone. 
 This power of attorney shall be irrevocable until the Obligations are paid in full. Grantor shall execute, acknowledge and deliver all such instruments and take all such
actions as Lender may from time to time reasonably request in order further and fully to effectuate the purposes of this Agreement in each and every country of the world and to carry out the terms hereof. Nothing in this Agreement shall impose on
Lender an affirmative obligation or duty to take any specific action, or impose any liability on Lender for the failure to take any action, with respect to any of the Intellectual Property. 
 Grantor represents and warrants that Exhibits A, B, and C attached hereto set forth any and all intellectual property rights which Grantor has registered
or for which Grantor has filed an application with either the United States Patent and Trademark Office or the United States Copyright Office, as applicable. 
 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute the same instrument. This Agreement shall be governed by the laws of the
State of California. 
 IN WITNESS WHEREOF, the parties have caused this Intellectual Property Security Agreement to be duly executed by its
officers thereunto duly authorized as of the first date written above. 
  

									
		 		 	GRANTOR:
			
	Address of Grantor:	 		 	Overland Storage, Inc.
			
	4820 Overland Avenue	 		 	
	San Diego, CA 92123	 		 	
					
		 		 		 	By:	 	/s/ Vernon A. LoForti
	Attn: Kurt L. Kalbfleisch, Chief Financial Officer	 		 		 	
		 		 		 	Name:	 	Vernon A. LoForti
		 		 		 		 	
		 		 		 	Title:	 	President
			
		 		 	LENDER:
			
	Address of Lender:	 		 	Anacomp, Inc.
			
	15378 Avenue of Science	 		 	
	San Diego, CA 92128	 		 	
					
		 		 		 	By:	 	/s/ Paul J. Najar
	 Attn: Paul J. Najar, Executive Vice President, General

           Counsel and Secretary
	 		 		 	 Paul J. Najar
 Executive Vice President, General Counsel
and Secretary

 EXHIBIT A 
 Copyrights 
  

							
	  	 	 Description
	  	Registration
Number	  	Registration Date
		 		  		  	

 EXHIBIT B 
 Patents 
  

					
	 Description
	  	Patent/
Application
Number	  	Patent/
Application
Date
	 MODULAR CABINET FOR DATA STORAGE MEDIA AND DRIVES
	  	5870245	  	2/9/1999
			
	 METHOD AND SYSTEM FOR CONTROLLING THE POSITION OF MAGNETIC READ HEAD
	  	5898534	  	4/27/1999
			
	 MAGNETIC MEDIA HAVING PARTITIONED AND PRESATURATED DATA CKS
	  	6249396	  	6/19/2001
			
	 RANDOMIZING ENCODER FOR DIGITAL DATA STORAGE
	  	5712863	  	1/27/1998
			
	 DIGITAL DATA RECORDING CHANNEL
	  	5931968	  	8/3/1999
			
	 DIGITAL DATA RECORDING CHANNEL
	  	6363512	  	3/26/2002
			
	 DIGITAL DATA RECORDING CHANNEL
	  	6260171	  	7/10/2001
			
	 DIGITAL DATA RECORDING CHANNEL
	  	6513139	  	1/28/2003
			
	 ENCODER FOR DIGITAL DATA STORAGE
	  	771221	  	7/01/2004
			
	 ENCODER FOR DIGITAL DATA STORAGE
	  	733663	  	8/30/2001
			
	 ENCODER FOR DIGITAL DATA STORAGE
	  	2246423	  	8/03/2004
			
	 ENCODER FOR DIGITAL DATA STORAGE
	  	97193708.7	  	1/21/2004
			
	 ENCODER FOR DIGITAL DATA STORAGE
	  	HK1019654	  	9/17/2004
			
	 ENCODER FOR DIGITAL DATA STORAGE
	  	3935942	  	3/30/2007
			
	 ENCODER FOR DIGITAL DATA STORAGE
	  	214876	  	6/23/2003
			
	 A MAGNETIC TAPE DRIVE APPARATUS INCLUDING A VARIABLE RATE ENCODER
	  	6,597,526	  	7/22/2003
			
	 AUTOMATED TAPE CARTRIDGE LIBRARY WITH ACCELERATED CALIBRATION
	  	5819309	  	10/6/1998
			
	 VARIABLE RATE BIT INSERTER FOR DIGITAL DATA STORAGE
	  	5815514	  	9/29/1998
			
	MEDIA ELEMENT LIBRARY WITH NON-OVERLAPPING SET OF MEDIA ELEMENTS AND NON-OVERLAPPING SET OF MEDIA ELEMENT DRIVES ACCESSIBLE TO FIRST HOST AND INACCESSIBLE TO SECOND HOST	  	6328766	  	12/11/2001

					
	 Description
	  	Patent/
Application
Number	  	Patent/
Application
Date
	METHOD OF WRITING DATA TO STORAGE MEDIUM BY INSERTING BITS AT A VARIABLE RATE IN RESPONSE TO BIT STREAM CONTENT MONITORING	  	6167550	  	12/26/2000
			
	WRITE FORMAT FOR DIGITAL DATA STORAGE	  	6,543,024	  	4/1/2003
			
	WRITE FORMAT FOR DIGITAL DATA STORAGE	  	1110217	  	4/16/2003
			
	MEDIA ACCESS IN A MEDIA LIBRARY	  	6353581	  	3/5/2002
			
	MEDIA HANDLING SYSTEM AND METHOD	  	6496325	  	12/17/2002
			
	SYSTEM AND METHOD FOR SELECTIVELY TRANSFERRING BLOCK DATA OVER A NETWORK	  	10/444680	  	5/22/2003
			
	TAPE EMULATING DISK BASED STORAGE SYSTEM AND METHOD WITH AUTOMATICALLY RESIZED EMULATED TAPE CAPACITY	  	10/943779	  	9/17/2004
			
	TAPE EMULATING DISK BASED STORAGE SYSTEM AND METHOD	  	7444465	  	10/28/08
			
	TAPE EMULATING DISK BASED STORAGE SYSTEM AND METHOD WITH AUTOMATICALLY RESIZED EMULATED TAPE CAPACITY	  	05793416.8	  	8/23/05
			
	TAPE LIBRARY EMULATION WITH AUTOMATIC CONFIGURATION AND DATA RETENTION	  	11/356726	  	2/17/2006
			
	DATA PROTECTION SYSTEMS WITH MULTIPLE SITE REPLICATION	  	11/357742	  	2/17/2006
			
	BLOCK LEVEL DATA SNAPSHOT SYSTEM AND METHOD	  	7225210	  	5/29/2007

 EXHIBIT C 
 Trademarks 
  

					
	 Trademark Name
	  	Registration/
Application Number	  	Registration/
Application Date
	 LIBRARYXPRESS
	  	702558	  	4/18/1997
	 LIBRARYXPRESS
	  	1457883	  	10/14/2000
	 LIBRARYXPRESS
	  	11585	  	10/17/1997
	 LIBRARYXPRESS
	  	375669	  	3/26/1996
	 LIBRARYXPRESS
	  	544236	  	3/24/1997
	 LIBRARYXPRESS
	  	T96/01729Z	  	8/21/1995
	 MCT/MAINFRAME CLASS TAPE (STYL
	  	480390	  	8/13/1997
	 OVERLAND DATA
	  	1650007	  	7/9/1991
	 VR2 (stylized and/or with design)
	  	2419492	  	1/9/2001
	 VR2 (STYLIZED)
	  	761936	  	7/7/2000
	 VR2 (STYLIZED)
	  	823369	  	5/21/2002
	 VR2 (STYLIZED)
	  	4402213	  	7/21/2000
	 VR2 (STYLIZED)
	  	207007	  	2/22/2001
	 VR2 (STYLIZED)
	  	932905	  	3/1/2001
	 LOADERXPRESS
	  	2345987	  	4/25/2000
	 WEB TLC
	  	2447632	  	5/1/2001
	 WEB TLC
	  	833082	  	9/15/2000
	 WEB TLC
	  	959981	  	9/16/2001
	 XCHANGENOW
	  	2292932	  	11/16/1999
	 XCHANGENOW
	  	1236546	  	8/8/2000
	 MINILIBRARYXPRESS
	  	833056	  	9/15/2000
	 MINILIBRARYXPRESS
	  	4444491	  	1/5/2001
	 LIBRARYPRO
	  	2721753	  	6/3/2003
	 LIBRARYPRO
	  	833057	  	9/15/2000
	 ENTERPRISEXPRESS
	  	833055	  	9/17/2001
	 ENTERPRISEXPRESS
	  	4444492	  	1/5/2001
	 ENTERPRISEXPRESS
	  	954581	  	8/16/2001
	 SANPIPER
	  	846998	  	2/21/2001
	 SANPIPER
	  	1009196	  	8/1/2002
	 NEO SERIES
	  	2650385	  	11/12/2002
	 NEO SERIES
	  	879211	  	11/19/2001
	 NEO SERIES
	  	2137685	  	6/28/2002
	 NEO SERIES
	  	1011127	  	8/16/2002
	 POWERLOADER
	  	2725558	  	6/10/2003
	 POWERLOADER
	  	TMA656706	  	1/17/2006
	 POWERLOADER
	  	2647196	  	11/3/2005
	 POWERLOADER
	  	4611584	  	10/11/2002
	 POWERLOADER
	  	1018294	  	12/17/2007
	 POWERLOADER
	  	T02/04358E	  	1/29/2004
	 POWERLOADER
	  	1033206	  	2/16/2003
	 VR2 AND DESIGN
	  	2597912	  	7/23/2002

  

 -6- 

					
	 Trademark Name
	  	Registration/
Application Number	  	Registration/
Application Date
	 VR2 AND DESIGN
	  	TMA650882	  	10/20/2005
	 VR2 AND DESIGN
	  	2636165	  	7/22/2003
	 VR2 AND DESIGN
	  	4611505	  	10/11/2002
	 VR2 AND DESIGN
	  	757110	  	7/30/2002
	 VR2 AND DESIGN
	  	T02/04214G	  	1/20/2004
	 VR2 AND DESIGN
	  	1040515	  	4/16/2003
	 OVERLAND STORAGE
	  	2835126	  	4/20/2004
	 OVERLAND STORAGE
	  	930589	  	8/18/2003
	 OVERLAND STORAGE
	  	2892313	  	10/13/2004
	 OVERLAND STORAGE
	  	4689477	  	7/4/2003
	 OVERLAND STORAGE
	  	T04/18881E	  	7/19/2005
	 OVERLAND STORAGE
	  	1061088	  	10/16/2003
	 OVERLAND
	  	2835127	  	4/20/2004
	 OVERLAND
	  	930588	  	8/18/2003
	 OVERLAND
	  	2892339	  	9/11/2004
	 OVERLAND
	  	4689478	  	7/4/2003
	 OVERLAND
	  	T04/18879C	  	3/22/2005
	 OVERLAND
	  	1057507	  	9/16/2003
	 OVERLAND STORAGE
	  	185460	  	8/16/2003
	 OVERLAND
	  	184092	  	7/16/2003
	 REO SERIES
	  	3071748	  	3/21/2006
	 REO SERIES
	  	985168	  	6/1/2004
	 REO SERIES
	  	3613619	  	4/11/2005
	 REO SERIES
	  	T04/18876I	  	9/27/2005
	 REO SERIES
	  	1155921	  	6/1/2005
	 REO 4000
	  	3040311	  	1/10/2006
	 REO 4000
	  	1027421	  	4/26/2005
	 REO 4000
	  	T04/18877G	  	12/20/2005
	 MULTI-SITEPAC
	  	3242939	  	5/15/2007
	 MULTI-SITEPAC
	  	1063167	  	11/7/2005
	 MULTI-SITEPAC
	  	4529509	  	7/11/2006
	 MULTI-SITEPAC
	  	4915876	  	12/16/2005
	 MULTI-SITEPAC
	  	T05/11528E	  	4/10/2006
	 MULTI-SITEPAC
	  	1201661	  	4/1/2006
	 OVERLAND STORAGE
	  	T04/18882C	  	3/15/2005
	 OVERLAND
	  	T04/18880G	  	3/7/2005
	 REO
	  	3160454	  	10/17/2006
	 REO
	  	1063156	  	11/21/2005
	 REO
	  	T05/11527G	  	4/11/2006
	 REO
	  	1201660	  	4/1/2006
	 ULTAMUS
	  	3341151	  	11/20/2007
	 ULTAMUS
	  	1087125	  	3/27/2006
	 ULTAMUS
	  	4758686	  	1/3/2007
	 ULTAMUS
	  	4942938	  	4/7/2006
	 ULTAMUS
	  	T05/24527H	  	4/7/2006
	 ULTAMUS
	  	1216361	  	7/1/2006

  

 -7- 

					
	 Trademark Name
	  	Registration/
Application Number	  	Registration/
Application Date
	 PROTECTION OS
	  	3245667	  	5/22/2007
	 PROTECTION OS
	  	1133046	  	1/15/2007
	 PROTECTION OS
	  	5323019	  	8/24/2007
	 PROTECTION OS
	  	T06/18255E	  	6/26/2007
	 PROTECTION OS
	  	1266194	  	6/16/2007
	 NEO
	  	3446775	  	6/10/2008
	 NEO
	  	T0618256C	  	8/14/2007
	 NEO
	  	1266195	  	6/16/2007
	 ARCvault
	  	3353649	  	12/11/2007
	 ARCvault
	  	1101609	  	2/5/2007
	 ARCvault
	  	4946448	  	3/23/2007
	 ARCvault
	  	5033280	  	3/16/2007
	 ARCvault
	  	T06/03966C	  	10/11/2006
	 ARCvault
	  	1238898	  	12/1/2006
	 SIMPLY PROTECTED STORAGE
	  	78/770616	  	12/9/2005
	 SIMPLY PROTECTED
	  	78/770618	  	12/9/2005
	 ARCVAULT SERIES
	  	1140071	  	2/12/2007
	 ARCVAULT SERIES
	  	5665446	  	10/17/2006
	 ARCVAULT SERIES
	  	5024906	  	2/9/2007
	 ARCVAULT SERIES
	  	T06/21249G	  	4/10/2007
	 ARCVAULT SERIES
	  	1285204	  	11/1/2007
	 SNAP! SERVER
	  	2421713	  	1/16/2001
	 SNAP APPLIANCE
	  	78/178397	  	10/25/2002
	 SNAP APPLIANCE
	  	3144581	  	2/2/2005
	 SNAP CARE
	  	2944987	  	4/26/2005
	 SNAP CARE
	  	3151611	  	8/12/2005
	 GUARDIANOS
	  	78/231018	  	3/27/2003
	 GUARDIANOS
	  	3151594	  	5/2/2003
	 SNAP DISK
	  	525204	  	8/31/2004
	 SNAP SERVER
	  	823379	  	4/7/2004
	 SNAP SERVER
	  	823379	  	11/30/2004
	 SNAP SERVER
	  	823379	  	6/13/2005
	 SNAP SERVER
	  	3495945	  	9/2/2008
	 SNAP SERVER
	  	1213700	  	4/13/2004
	 SNAP SERVER
	  	3754471	  	4/8/2004
	 SNAP SERVER
	  	849038	  	8/24/2004
	 SNAP SERVER
	  	823379	  	4/7/2004
	 STORASSURE
	  	3309368	  	10/9/2007

  

 -8-exhibit_10-1.htm

    
      

    

     

    EXHIBIT
10.1

    

    2009
EMPLOYEES/CONSULTANTS STOCK COMPENSATION PLAN

    OF

    CARBON
CREDITS INTERNATIONAL, INC.

    

    SECTION
1. ESTABLISHMENT AND PURPOSE

    

    The Plan
was established on April 1, 2009, effective April 1, 2009, to offer directors,
officers and selected key employees, advisors and consultants an opportunity to
acquire a proprietary interest in the success of the Company to receive
compensation, or to increase such interest, by purchasing Shares of the
Company’s common stock.  The Plan provides both for the direct award
or sale of Shares and for the grant of Options to purchase Shares. Options
granted under the Plan may include non-statutory options, as well as ISOs
intended to qualify under section 422 of the Code.

    

    The Plan
is intended to comply in all respects with Rule 16.3 (or its successor) under
the Exchange Act and shall be construed accordingly.

    

    SECTION
2.  DEFINITIONS.

    

    
      
        (A)  “BOARD
OF DIRECTORS” shall mean the Board of Directors of the Company, as constituted
from time to time.

      

    

    

    
      
        (B)  “CODE”
shall mean the Internal Revenue Code of 1986, as
amended.

      

    

    

    
      
        (C)  “COMMITTEE”
shall mean a committee of the Board of Directors, as described in Section
3(a).

      

    

    

    
      (D)  “COMPANY”
shall mean CARBON CREDITS INTERNATIONAL, INC., a Nevada
corporation.

    

    

    (E)  “EMPLOYEE”
shall mean (i) any individual who is a common-law employee of the Company or of
a Subsidiary, (ii) an Outside Director, (iii) an independent contractor who
performs services for the Company or a Subsidiary and who is not a member of the
Board of Directors, including consultants and advisors that provide
professional, technical, financial, legal, accounting, capital markets related
and other services.  Service as an Outside Director or independent
contractor shall be considered employment for all purposes of the Plan, except
as provided in Subsections (a) and (b) of Section 4,

    

    (F)  “EXCHANGE
ACT” shall mean the Securities Exchange Act of 1934, as amended.

    

    
      (G)  “EXERCISE
PRICE” shall mean the amount for which one share may be purchased upon exercise
of an Option, as specified by the Committee in the applicable Stock Option
Agreement.

    

    

    
      (H)  “FAIR
MARKET VALUE” shall mean the market price of Stock, determined by the Committee
as follows:

    

     

    (i)  If
Stock was traded on a stock exchange on the date in question, then the Fair
Market Value shall be equal to the closing price reported for such date by the
applicable composite-transactions report;

     

    (ii)  If
stock was traded over-the-counter on the date in question and was traded on the
Nasdaq system or the Nasdaq National Market, then the Fair Market Value shall be
equal to the last transaction price quoted for such date by the Nasdaq system or
the Nasdaq National Market;

     

    (iii)  If
Stock was traded over-the-counter on the date in question but was not traded on
the Nasdaq system or the Nasdaq National Market, then the Fair Market Value
shall be equal to the mean between the last reported representative bid and
asked prices quoted for such date by the principal automated inter-dealer
quotation system on which Stock is quoted or, if the Stock is not quoted on any
such system, by the “Pink Sheets” published by the National Quotation Bureau,
Inc.; and

     

    (iv)  If
none of the foregoing provisions is applicable, then the Fair Market Value shall
be determined by the Committee in good faith on such basis as it deems
appropriate.

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
In all
cases, the determination of Fair Market Value by the Committee shall be
conclusive and binding on all persons.

    

    
      (I)  “ISO”
shall mean an employee incentive stock option described in section 422(b) of the
Code.

    

    

    (J)  “NON-STATUTORY
OPTION” shall mean an employee stock option not described in sections 422(b) or
423(b) of the Code.

    

    (K)  “OFFEREE”
shall mean an individual to whom the Committee has offered the right to acquire
Shares under the Plan (other than upon exercise of an Option)

    

    (L)  “OPTION”
shall mean an ISO or Non-statutory Option granted under the Plan and entitling
the holder to purchase Shares.

     

    (M)  “OPTIONEE”
shall mean an individual who holds an Option.

    

    
      (N)  “OUTSIDE
DIRECTOR” shall mean a member of the Board of Directors who is not a common--law
employee of the Company or of a Subsidiary.

    

    

    
      (O)  COMMITTEE
PROCEDURES.  The Committee shall designate one of its members as
chairman. The Committee may hold meetings at such times and places as it shall
determine. The acts of a majority of the Committee members present at meetings
at which a quorum exists, or acts reduced to or approved in writing by all
Committee members, shall be valid acts of the Committee.

    

    

    (P)  COMMITTEERESPONSIBILITIES.
Subject to the provisions of the Plan, the Committee shall have the authority
and discretion to take the following actions:

    

    (i)  To
interpret the Plan and to apply its provisions;

    

    (ii)  To
adopt, amend or rescind rules, procedures and forms relating to the
Plan;

     

    (iii)  To
authorize any person to execute, on behalf of the Company, any instrument
required to carry out the purposes of the Plan;

     

    (iv)  To
determine when Shares are to be awarded or offered for sale and when Options are
to be granted under the Plan;

    

    (v)  To
select the Offerees and Optionees;

     

    (vi)  To
determine the number of Shares to be offered to each Offeree or to be made
subject to each Option;

     

    (vii)  To
prescribe the terms and conditions of each award or sale of Shares, including
(without limitation) the Purchase Price, and to specify the provisions of the
Stock Purchase Agreement relating to such award or sale;

     

    (viii)  To
prescribe the terms and conditions of each Option, including (without
limitation) the Exercise Price, to determine whether such Option is to be
classified as an ISO or as a Non-statutory Option, and to specify the provisions
of the Stock Option Agreement relating to such Option;

     

    (ix)  To
amend any outstanding Stock Purchase Agreement or Stock Option Agreement,
subject to applicable legal restrictions and, to the extent such amendments
adverse to the Offeree’s or Optionee’s interest, to the consent of the Offeree
or Optionee who entered into such agreement;

     

    (x)  To
prescribe the consideration for the grant of each Option or other
right
under the
Plan and to determine the sufficiency of such consideration; and

     

    (xi)  To
take any other actions deemed necessary or advisable for the administration of
the Plan.

    

    
      All
decisions, interpretations and other actions of the Committee shall be final and
binding on all Offerees, all Optionees, and all persons deriving their rights
from an Offeree or Optionee. No member of the Committee shall be liable for any
action that he or she has taken or has failed to take in good faith with respect
to the Plan, any Option, or any right to acquire Shares under the
Plan.

    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
SECTION
3.  INTENTIONALLY OMITTED

    

    SECTION
4. ELIGIBILITY.

    

    
      (A)  GENERAL
RULES. Only Employees (including, without limitation, independent contractors,
consultants and legal counsel who are not members of the Board of Directors)
shall be eligible for designation as Optionees or Offerees by the Committee. In
addition, only Employees who are common-law employees of the Company or a
Subsidiary shall be eligible for the grant of ISOs. Employees who are Outside
Directors shall only be eligible for the grant of the Non-statutory Options
described in Subsection (b) below.

    

    

    (B)  OUTSIDE
DIRECTORS. Any other provision of the Plan notwithstanding, the participation of
Outside Directors in the Plan shall be subject to the following
restrictions:

    

    
      (i)  outside
Directors shall receive no grants other than the Non-statutory options described
in this Subsection (b)

    

     

    (ii)  All
Non-statutory Options granted to an Outside Director under this Subsection (b)
shall also become exercisable in full in the event of the termination of such
Outside Director’s service because of death, Total and Permanent Disability or
voluntary retirement at or after age 65.

     

    (iii)  The
Exercise Price under all Non-statutory Options granted to an Outside Director
under this Subsection (b) shall be equal to 100 percent of the Fair Market Value
of a Share on the date of grant, payable in one of the forms described in
Subsection (a), (b), (c) or (d) of Section 6.

     

    (iv)  Non-statutory
options granted to an outside Director under this Subsection (b) shall terminate
on the earliest of (A) the 10th anniversary of the date of grant, (B) the date
three months after the termination of such Outside Director’s service for any
reason other than death or Total and Permanent Disability or (C) the date 12
months after the termination of such Outside Director’s service because of death
or Total and Permanent Disability.

    
       

      The
committee may provide that the Non-statutory Options that otherwise would be
granted to an Outside Director under this Subsection (b) shall instead be
granted to an affiliate of such Outside Director. Such affiliate shall then be
deemed to be an Outside Director for purposes of the Plan, provided that the
service—related vesting and termination provisions pertaining to the
Non-statutory Options shall be applied with regard to the service of the Outside
Director.

    

    

    (C)  ATTRIBUTION
RULES. For purposes of Subsection (c) above, in determining stock ownership, an
Employee shall be deemed to own the stock owned, directly or indirectly, by or
for such Employee’s brothers, sisters, spouse, ancestors and lineal descendants.
Stock owned, directly or indirectly, by or for a corporation, partnership,
estate or trust shall be deemed to be owned proportionately by or for its
stockholders, partners or beneficiaries. Stock with respect to which such
Employee holds an option shall not be counted.

    

    (D)  OUTSTANDING
STOCK. For purposes of Subsection (c) above, “outstanding stock” shall include
all stock actually issued and outstanding immediately after the grant.
“Outstanding stock” shall not include shares authorized for issuance under
outstanding options held by the Employee or by any other person.

    

    SECTION
5. STOCK SUBJECT TO PLAN.

    

    (A)  BASIC
LIMITATION. Shares offered under the Plan shall be authorized but unissued
Shares or treasury Shares.  The aggregate number of Shares which may
be issued under the Plan (upon exercise of Options or other rights to acquire
Shares) shall be 5,000,000 Shares, subject to adjustment pursuant to Section 9.
The number of Shares which are subject to Options or other rights outstanding at
any time under the Plan shall not exceed the number of Shares which then remain
available for issuance under the Plan. The Company, during the term of the Plan,
shall at all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan.

    

    (B)  ADDITIONAL
SHARES. In the event that any outstanding Option or other right for any reason
expires or is cancelled or otherwise terminated, the Shares allocable to the
unexercised portion of such Option or other right shall again be available for
the purposes of the Plan. In the event that Shares issued under the Plan are
reacquired by the Company pursuant to a forfeiture provision, a right of
repurchase or a right of first refusal, such Shares shall again be available for
the purposes of the Plan.

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
SECTION
6.  TERMS AND CONDITIONS OF AWARDS OR SALES.

    

    (A)  AGREEMENT.
Each award or sale of Shares under the Plan (other than upon exercise of an
Option) shall be evidenced by an Agreement between the offeree and the Company.
Such award or sale shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in an Agreement.  The provisions of the various Agreements
entered into under the Plan need not be identical.

    

    (B)  DURATION
OF OFFERS AND NONTRANSFERABILITY OF RIGHTS.  Any right to acquire
Shares under the Plan (other than an Option) shall automatically expire if not
exercised by the Offeree within 30 days after the grant of such right was
communicated to the Offeree by the Committee. Such right shall not be
transferable and shall be exercisable only by the Offeree to whom such right was
granted.

    

    (C)  PURCHASE
PRICE. The Purchase Price of Shares to be offered under the Plan shall not be
less than 90 percent of the Fair Market Value of such Shares. Subject to the
preceding sentence, the Purchase Price shall be determined by the Committee at
its sole discretion. The Purchase Price shall be payable in a form described in
Section 6.

    

    (D)  WITHHOLDING
TAXES.  As a condition to the award, sale or vesting of Shares, the
offeree shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that arise in connection with such Shares. The Committee may permit the Offeree
to satisfy all or part of his or her tax obligations related to such Shares by
having the Company withhold a portion of any Shares that otherwise would be
issued to him or her or by surrendering any Shares that previously were acquired
by him or her.  The Shares withheld or surrendered shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. The payment of taxes by assigning Shares to the Company, if permitted by
the committee, shall be subject to such restrictions as the Committee may
impose, including any restrictions required by rules of the Securities and
Exchange Commission.

    

    (E)  RESTRICTIONS
ON TRANSFER OF SHARES.  Any Shares awarded or sold under the Plan
shall be subject to such special forfeiture conditions, rights of repurchase,
rights of first refusal and other transfer restrictions as the Committee may
determine. Such restrictions shall be set forth in the applicable Stock Purchase
Agreement and shall apply in addition to any general restrictions that may apply
to all holders of Shares.

    

    SECTION
7. TERMS AND CONDITIONS OF OPTIONS.

    

    (A)  STOCK
OPTION AGREEMENT.  Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions which are not inconsistent with
the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.

    

    (B)  NUMBER OF
SHARES.  Each Stock Option Agreement shall specify the number of
Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 9. The Stock Option Agreement shall also
specify whether the Option is an ISO or a Non-statutory Option.

    

    (C)  EXERCISE PRICE. Each
Stock Option Agreement shall specify the Exercise Price.
The Exercise Price of an ISO shall not be less than 100 percent of the Fair
Market Value of a Share on the date of grant, except as otherwise provided in
Section 4(c). The Exercise Price of a Non-statutory Option shall not be less
than 85 percent of the Fair Market Value of a Share on the date of grant.
Subject to the preceding two sentences, the Exercise Price under any Option
shall be determined by the Committee at its sole discretion. The Exercise Price
shall be payable in a form described in Section 8.

    

    (D)  WITHHOLDING TAXES. As a
condition to the exercise of an Option, the Optionee shall make such
arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that arise in connection
with such exercise. The Optionee shall also make such arrangements as the
Committee may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that may arise in connection with the
disposition of Shares acquired by exercising an Option. The Committee may permit
the Optionee to satisfy all or part of his or her tax obligations related to the
Option by having the Company withhold a portion of any Shares that otherwise
would be issued to him or her or by surrendering any Shares that previously were
acquired by him or her. Such Shares shall be valued at their Fair Market Value
on the date when taxes otherwise would be withheld in cash. The payment of taxes
by assigning Shares to the Company, if permitted by the Committee, shall be
subject to such restrictions as the Committee may impose, including any
restrictions required by rules of the Securities and Exchange
Commission.

     

     

    
      
         

      

      
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    (E)  EXERCISABILITY AND
TERM.  Each Stock Option Agreement shall specify the date when all or
any installment of the Option is to become exercisable. The vesting of any
Option shall be determined by the Committee at its sole discretion. A Stock
Option Agreement may provide for accelerated exercisability in the event of the
Optionee’s death, Total and Permanent Disability or retirement or other events.
The Stock Option Agreement shall also specify the term of the Option. The term
shall not exceed 10 years from the date of grant, except as otherwise provided
in Section 4(c).  Subject to the preceding sentence, the Committee at
its sole discretion shall determine when an Option is to expire.

     

    (F)  NONTRANSFERABILITY.  During
an Optionee’s lifetime, such Optionee’s Option(s) shall be exercisable only by
him or her and shall not be transferable, unless permitted by the Stock Option
Agreement. In the event of an Optionee’s death, such Optionee’s Option(s) shall
not be transferable other than by will, by a beneficiary designation executed by
the Optionee and delivered to the Company, or by the laws of descent and
distribution.

    

    (G)  TERMINATION OF SERVICE
(EXCEPT BY DEATH).   If an Optionee’s Service terminates for any
reason other than the Optionee’s  death, then such Optionee’s
Option(s) shall expire on the earliest of the following occasions:

    

    
      (i)  The
expiration date determined pursuant to Subsection (e) above;

    

     

    (ii) The
date 90 days after the termination of the Optionee’s Service for any
reason
other than Total and Permanent Disability; or

     

    (iii)  The
date six months after the termination of the Optionee’s Service by reason of
Total and Permanent Disability.

     

    The
Optionee may exercise all or part of his or her Option(s) at any time before the
expiration of such Option(s) under the preceding sentence, but only to the
extent that such Option(s) had become exercisable before the Optionee’s Service
terminated or became exercisable as a result of the termination. The balance of
such Option(s) shall lapse when the Optionee’s Service terminates. In the event
that the Optionee dies after the termination of the Optionee’s Service but
before the expiration of the Optionee’s Option(s), all or part of such Option(s)
may be exercised (prior to expiration) by his or her designated beneficiary (if
applicable), by the executors or administrators of the Optionee’s estate or by
any person who has acquired such Option(s) directly from the Optionee by bequest
or inheritance, but only to the extent that such Option(s) had become
exercisable before the Optionee’s Service terminated or became exercisable as a
result of the termination.

    

    (H)  LEAVES
OF ABSENCE.  For purposes of Subsection (g) above, Service shall be
deemed to continue while the Optionee is on sick leave or other bona fide leave
of absence (as determined by the Committee) . The foregoing notwithstanding, in
the case of an ISO granted under the Plan. Service shall not be deemed to
continue beyond the first 90 days of such leave, unless the Optionee’s
reemployment rights are guaranteed by statute or by contract.

    

    (I)  DEATH
OF OPTIONEE.  If an Optionee dies while he or she is in Service, then
such Optionee’s Option(s) shall expire on the earlier of the following
dates:

    

    (i)  The
expiration date determined pursuant to Subsection (e) above; or

    

    (ii)  The
date six months after the Optionee’s death.

    

    
      All or
part of the Optionee’s Option(s) may be exercised at any time before the
expiration of such Option(s) under the preceding sentence by his or her
designated beneficiary (if applicable), by the executors or administrators of
the optionee’s estate or by any person who has acquired such Option(s) directly
from the Optionee by bequest or inheritance, but only to the extent that such
Option(s) had become exercisable before the Optionee’s death or became
exercisable as a result of the Optionee’s death. The balance of such Option(s)
shall lapse when the Optionee dies.

    

    

    (J)  NO
RIGHTS AS A STOCKHOLDER.  An Optionee, or a transferee of an Optionee,
shall have no rights as a stockholder with respect to any Shares covered by his
or her Option until the date of the issuance of a stock certificate for such
Shares. No adjustments shall be made, except as provided in Section
9.

    

    (K)  MODIFICATION.
EXTENSION AND RENEWAL OF OPTIONS.  Within the limitations
of the Plan, the Committee may modify, extend or renew outstanding Options or
may accept the cancellation of outstanding Options (to the extent not previously
exercised) in return for the grant of new Options at the same or a different
price. The foregoing notwithstanding, no modification of an option shall,
without the consent of the Optionee, impair such Optionee’s rights or increase
his or her obligations under such Option.

    

    (L)  RESTRICTIONS
ON TRANSFER OF SHARES.  Any Shares issued upon exercise of an Option
shall be subject to such special forfeiture conditions, rights of repurchase,
rights of first refusal and other transfer restrictions as the Committee may
determine. Such restrictions shall be set forth in the applicable Stock Option
Agreement and shall apply in addition to any general restrictions that may apply
to all holders of Shares.

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
SECTION
8.  PAYMENT FOR SHARES.

    

    (A)  GENERAL
RULE.  The entire Purchase Price or Exercise Price of Shares issued
under the Plan shall be payable in lawful money of the United States of America
at the time when such Shares are purchased, except as follows:

    

    
      (i)  In
the case of Shares sold under the terms of a Stock Purchase Agreement subject to
the Plan, payment shall be made only pursuant to the express provisions of such
Stock Purchase Agreement. However, the Committee (at its sole discretion) may
specify in the Stock Purchase Agreement that payment may be made in one or all
of the forms described in Subsections (e), (f) and (g) below.

    

    

    (ii)  In
the case of an ISO granted under the Plan, payment shall be made only pursuant
to the express provisions of the applicable Stock Option Agreement. However, the
Committee (at its sole discretion) may specify in the Stock Option Agreement
that payment may be made pursuant to Subsections (b), (c), (d), (1) or (g)
below.

    

    (iii)  In
the case of a Non-statutory Option granted under the Plan, the committee (at its
sole discretion) may accept payment pursuant to Subsections (b), (c), (d), (f)
or (g) below.

    

    (B)  SURRENDER
OF STOCK. To the extent that this Subsection (b) is applicable, payment may be
made all or in part with Shares which have already been owned by the Optionee or
his or her representative for more than 12 months and which are surrendered to
the Company in good form for transfer.  Such Shares shall be valued at
their Fair Market Value on the date when the new Shares are purchased under the
Plan.

    

    (C)  EXERCISE/SALE
TO THE EXTENT THAT THIS SUBSECTION (C) is applicable, payment may be made by the
delivery (on a form prescribed by the Company) of an irrevocable direction to a
securities broker approved by the Company to sell Shares and to deliver all or
part of the sales proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.

     

    (D)  EXERCISE/PLEDGE.
To the extent that this Subsection (d) is applicable, payment may be made by the
delivery (on a form prescribed by the Company) of an irrevocable direction to
pledge Shares to a securities broker or lender approved by the Company, as
security for a loan, and to deliver all or part of the loan proceeds to the
Company in payment of all or part of the Exercise Price and any withholding
taxes.

    

    (E)  SERVICES
RENDERED.  To the extent that this Subsection (e) is applicable,
Shares may be awarded under the Plan in consideration of services rendered to
the Company or a Subsidiary prior to the award. If Shares are awarded without
the payment of a Purchase Price in cash, the Committee shall make a
determination (at the time of the award) of the value of the services rendered
by the Offeree and the sufficiency of the consideration to meet the requirements
of Section 6(c).

    

    (F)  PROMISSORY
NOTE. To the extent that this Subsection (f) is applicable, a portion of the
Purchase Price or Exercise Price, as the case may be, of Shares issued under the
Plan maybe payable by a full recourse promissory note, provided that (i) the par
value of such Shares must be paid in lawful money of the United States of
America at the time when such Shares are purchased, (ii) the Shares are security
for payment of the principal amount of the promissory note and interest thereon
and (iii) the interest rate payable under the terms of the promissory note shall
be no less than the minimum rate (if any) required to avoid the imputation of
additional interest under the Code. Subject to the foregoing, the Committee (at
its sole discretion) shall specify the term, interest rate, amortization
requirements (if any) and other provisions of such note.

    

    (G)  OTHER
FORMS OF PAYMENT. To the extent that this Subsection (g) is applicable, payment
may be made in any other form approved by the Committee, consistent with
applicable laws, regulations and rules.

    

    SECTION
9.  ADJUSTMENT OF SHARES.

    

    (A)  GENERAL.
In the event of a subdivision of the outstanding Stock, a declaration of a
dividend payable in Shares, a declaration of a dividend payable in a form other
than Shares in an amount that has a material effect on the value of Shares, a
combination or consolidation of the outstanding Stock (by reclassification or
otherwise) into a lesser number of Shares, a recapitalization, a spinoff or a
similar occurrence, the Committee shall make appropriate adjustments in one or
more of (i) the number of Shares available for future grants under Section 5,
(ii) the number of Non-statutory Options to be granted to Outside Directors
under Section 4(b), (iii) the number of Shares covered by each outstanding
Option or (iv) the Exercise Price under each outstanding Option.

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (B)  REORGANIZATIONS.
In the event that the company is a party to a merger or other reorganization,
outstanding Options shall be subject to the agreement of merger or
reorganization. Such agreement may provide, without limitation, for the
assumption of outstanding Options by the surviving corporation or its parent,
for their continuation by the Company (if the Company is a surviving
corporation) , for payment of a cash settlement equal to the
difference between the amount to be paid for one Share under such agreement and
the Exercise Price, or for the acceleration of their exercisability followed by
the cancellation of Options not exercised, in all cases without the Optionees’
consent. Any cancellation shall not occur until after such acceleration is
effective and Optionees have been notified of such acceleration. In the case of
Options that have been outstanding for less than 12 months, a cancellation need
not be preceded by acceleration.

    

    (C)  RESERVATION
OF RIGHTS. Except as provided in this Section 9, an Optionee or Offeree shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any dividend or any other increase or decrease in
the number of shares of stock of any class. Any issue by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall not affect, and no adjustment by reason thereof shall be made with
respect to; the number or Exercise Price of Shares subject to an Option. The
grant of an Option pursuant to the Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or
assets.

    

    SECTION
10. SECURITIES LAWS.

    

    Shares
shall not be issued under the Plan unless the issuance and delivery of such
Shares complies with (or is exempt from) all applicable requirements of law,
including (without limitation) the Securities Act of 1933, as amended, the rules
and regulations promulgated thereunder, state securities laws and regulations,
and the regulations of any stock exchange on which the Company’s securities may
then be listed.

    

    SECTION
11.  NO RETENTION RIGHTS.

    

    Neither
the Plan nor any Option shall be deemed to give any individual a right to remain
an employee, consultant or director of the Company or a Subsidiary. The Company
and its Subsidiaries reserve the right to terminate the service of any employee,
consultant or director at any time, with or without cause, subject to applicable
laws, the Company’s certificate of incorporation and by-laws and a written
employment agreement (if any).

    

    SECTION
12.  DURATION AND AMENDMENTS.

    

    (A)  TERM
OF THE PLAN.  The Plan, as set forth herein, shall become effective as
of April 1, 2009. The Plan shall terminate automatically 15 years after its
initial adoption by the Board of Directors on March 31, 2024, and may be
terminated on any earlier date pursuant to Subsection (b) below.

    

    (B)  RIGHT
TO AMEND OR TERMINATE THE PLAN. The Board of Directors may, subject to
applicable law, amend, suspend or terminate the Plan at any time and for any
reason. An amendment to the Plan shall require stockholder approval only to the
extent required by applicable law.

    

    (C)  EFFECT
OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold under the Plan
after the termination thereof, except upon exercise of an Option granted prior
to such termination. The termination of the Plan, or any amendment thereto shall
not affect any Share previously issued or any Option previously granted under
the Plan.

    

    SECTION
13.  EXECUTION.

    

    To record
the adoption of the Plan by the Board of Directors on April 1, 2009, the Company
has caused its authorized officer to execute the same.

    

    CARBON
CREDITS INTERNATIONAL, INC.,

    a Nevada
corporation

    

    

    By: /s/ Hans J. Schulte

      
        

      

    

         Hans
J. Schulte, President

     

    7

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