Document:

IXI
      MOBILE, INC.

     

    2007
      STOCK PLAN

     

    1. Purposes
      of the Plan.
      The
      purposes of this Stock Plan are to attract and retain the best available
      personnel for positions of substantial responsibility, to provide additional
      incentive to Employees, Directors and Consultants and to promote the success
      of
      the Company's business. Options granted under the Plan will only be Nonstatutory
      Stock Options. 

     

    2. Definitions.
      As used
      herein, the following definitions shall apply:

     

    (a) “Applicable
      Laws”
means
      the requirements relating to the administration of stock option plans under
      U.S.
      state corporate laws, U.S. federal and state securities laws, the Code, any
      stock exchange or quotation system on which the Common Stock is listed or quoted
      and the applicable laws of any other country or jurisdiction where Options
      are
      granted under the Plan.

     

    (b) “Board”
means
      the Board of Directors of the Company.

     

    (c) “Cause”
      means,
      with
      respect to the termination by the Company, a Subsidiary or a Successor
      Corporation, of an Optionee’s services, that such termination is for “Cause” as
      such term is expressly defined in a then-effective written agreement between
      the
      Optionee and the Company or such Subsidiary or Successor Corporation, or in
      the
      absence of such then-effective written agreement and definition, is based on,
      in
      the determination of the Committee, the Optionee’s: (i) material breach of any
      written agreement with the Company or such Subsidiary or Successor Corporation;
      or (ii) conviction of a crime involving dishonesty, breach of trust, or physical
      or emotional harm to any person. 

     

    (d) “Change
      in Control”
means
      the occurrence of any of the following events:

     

    (i) Any
      “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
      becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
      directly or indirectly, of securities of the Company representing fifty percent
      (50%) or more of the total voting power represented by the Company’s then
      outstanding voting securities; or

     

    (ii) The
      consummation of the sale or disposition by the Company of all or substantially
      all of the Company’s assets; or

     

    (iii) The
      consummation of a merger or consolidation of the Company with any other
      corporation, other than a merger or consolidation which would result in the
      voting securities of the Company outstanding immediately prior thereto
      continuing to represent (either by remaining outstanding or by being converted
      into voting securities of the surviving entity or its parent) at least fifty
      percent (50%) of the total voting power represented by the voting securities
      of
      the Company or such surviving entity or its parent outstanding immediately
      after
      such merger or consolidation.

     

    (e) “Code”
means
      the Internal Revenue Code of 1986, as amended.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) “Committee”
means
      the Board or any committee of one or more Directors appointed by the Board
      in
      accordance with Section 4 hereof as shall be administering the
      Plan.

     

    (g) “Common
      Stock”
means
      the Common Stock of the Company.

     

    (h) “Company”
means
      IXI Mobile, Inc., a Delaware
      corporation.

     

    (i) “Consultant”
means
      any natural person who is engaged by the Company or any Parent or Subsidiary
      to
      render consulting or advisory services to such entity and who satisfies the
      requirements of subsection (c)(1) of Rule 701 under the Securities Act of 1933,
      as amended. 

     

    (j) “Director”
means
      a
      member of the Board.

     

    (k) “Disability”
means
      total and permanent disability as defined in Section 22(e)(3) of the
      Code.

     

    (l) “Employee”
means
      any person, including officers and Directors, employed by the Company or any
      Parent or Subsidiary of the Company. A Service Provider shall not cease to
      be an
      Employee in the case of (i) any leave of absence approved by the Company or
      (ii)
      transfers between locations of the Company or between the Company, its Parent,
      any Subsidiary, or any successor. For purposes of Incentive Stock Options,
      no
      such leave may exceed ninety (90) days, unless reemployment upon expiration
      of
      such leave is guaranteed by statute or contract. Neither service as a Director
      nor payment of a director's fee by the Company shall be sufficient to constitute
      “employment” by the Company.

     

    (m) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended. 

     

    (n) “Fair
      Market Value”
means,
      as of any date, the value of Common Stock determined as follows:

     

    (i) If
      the
      Common Stock is listed on any established stock exchange or a national market
      system, including without limitation the Nasdaq National Market or The Nasdaq
      SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be
      the
      closing sales price for such stock (or the closing bid, if no sales were
      reported) as quoted on such exchange or system on the day of determination,
      as
      reported in The
      Wall Street Journal
      or such
      other source as the Committee deems reliable;

     

    (ii) If
      the
      Common Stock is regularly quoted by a recognized securities dealer but selling
      prices are not reported, its Fair Market Value shall be the mean between the
      high bid and low asked prices for the Common Stock on the day of determination;
      or

     

    (iii) In
      the
      absence of an established market for the Common Stock, the Fair Market Value
      thereof shall be determined in good faith by the Committee. 

     

    (o) “IPO”
shall
      mean the first public offering by the Company of its Common Stock pursuant
      to an
      offering registered under the Securities Act.

    
      
        
        

      

      
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    (p) “Nonstatutory
      Stock Option”
means
      an Option not intended to qualify as an Incentive Stock Option.

     

    (q) “Option”
means
      a
      stock option granted pursuant to the Plan.

     

    (r) “Option
      Agreement”
means
      a
      written or electronic agreement between the Company and an Optionee evidencing
      the terms and conditions of an individual Option grant. The Option Agreement
      is
      subject to the terms and conditions of the Plan.

     

    (s) “Optioned
      Stock”
means
      the Common Stock subject to an Option.

     

    (t) “Optionee”
means
      the holder of an outstanding Option granted under the Plan.

     

    (u) “Parent”
means
      a
“parent corporation,” whether now or hereafter existing, as defined in Section
      424(e) of the Code. 

     

    (v) “Plan”
means
      this 2007 Stock Plan.

     

    (w) “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    (x) “Service
      Provider”
means
      an Employee, Director or Consultant.

     

    (y) “Share”
means
      a
      share of the Common Stock, as adjusted in accordance with Section 12
      below.

     

    (z) “Subsidiary”
means
      a
“subsidiary corporation,” whether now or hereafter existing, as defined in
      Section 424(f) of the Code.

     

    (aa) “Successor
      Corporation”
means
      the merged, consolidated, surviving or acquiring corporation or entity, as
      the
      case may be, in any merger or Change in Control (including, if applicable,
      the
      Company). 

     

    3. Stock
      Subject to the Plan.
      

     

    (a) Basic
      Limitation.
      The
      maximum aggregate number of Shares that may be subject to Options and sold
      under
      this Plan and the IXI Mobile, Inc. 2007 Israeli Stock Option Plan (each as
      amended from time to time) (collectively, the "Equity Plans") is 200,225 Shares
      (the "Common Reserve"). To the extent Options covering Shares are issued under
      any Equity Plan, the Common Reserve shall be appropriately reduced by the number
      of Shares subject to such awards. The Shares may be authorized but unissued,
      or
      reacquired Common Stock. The number of Shares that are subject to Options
      outstanding at any time under the Plan shall not exceed the number of Shares
      that then remain available for issuance under the Equity Plans.

     

    (b) Additional
      Shares.
      In the
      event that any outstanding Option for any reason expires or is canceled or
      otherwise terminated, the Shares allocable to the unexercised portion of such
      Option shall again be available for the purposes of the Equity Plans (unless
      any
      such Equity Plan has terminated) and shall be added back to the Common Reserve.
      In the event that Shares of restricted stock issued under the Plan are
      reacquired by the Company at their original purchase price, such Shares shall
      again be available for the purposes of the Equity Plans and shall be returned
      to
      the Common Reserve.

    
      
        
        

      

      
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    4. Administration
      of the Plan.

     

    (a) Committee.
      The
      Plan shall be administered by the Board or a Committee appointed by the Board,
      which Committee shall be constituted to comply with Applicable
      Laws.

     

    (b) Powers
      of the Committee.
      Subject
      to the provisions of the Plan and, in the case of a Committee, the specific
      duties delegated by the Board to such Committee, and subject to the approval
      of
      any relevant authorities, the Committee shall have the authority in its
      discretion:

     

    (i) to
      determine the Fair Market Value;

     

    (ii) to
      select
      the Service Providers to whom Options may from time to time be granted
      hereunder;

     

    (iii) to
      determine the number of Shares to be covered by each such Option granted
      hereunder;

     

    (iv) to
      approve forms of agreement for use under the Plan;

     

    (v) to
      determine the terms and conditions of any Option granted hereunder. Such terms
      and conditions include, but are not limited to, the exercise price, the time
      or
      times when Options may be exercised (which may be based on performance
      criteria), any vesting acceleration or waiver of forfeiture restrictions, and
      any restriction or limitation regarding any Option or the Common Stock relating
      thereto, based in each case on such factors as the Committee, in its sole
      discretion, shall determine;

     

    (vi) to
      prescribe, amend and rescind rules and regulations relating to the Plan,
      including rules and regulations relating to sub-plans established for the
      purpose of satisfying applicable foreign laws;

     

    (vii) to
      allow
      Optionees to satisfy withholding tax obligations by electing to have the Company
      withhold from the Shares to be issued upon exercise of an Option that number
      of
      Shares having a Fair Market Value equal to the minimum amount required to be
      withheld. The Fair Market Value of the Shares to be withheld shall be determined
      on the date that the amount of tax to be withheld is to be determined. All
      elections by Optionees to have Shares withheld for this purpose shall be made
      in
      such form and under such conditions as the Committee may deem necessary or
      advisable; and

     

    (viii) to
      construe and interpret the terms of the Plan and Options granted pursuant to
      the
      Plan.

     

    (c) Effect
      of Committee's Decision.
      All
      decisions, determinations and interpretations of the Committee shall be final
      and binding on all Optionees.

     

    5. Eligibility.
      Nonstatutory Stock Options may be granted to Service Providers.

    
      
        
        

      

      
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    6. Limitations
      - At-Will Employment.
      Neither
      the Plan nor any Option shall confer upon any Optionee any right with respect
      to
      continuing the Optionee's relationship as a Service Provider with the Company,
      nor shall it interfere in any way with his or her right or the Company's right
      to terminate such relationship at any time, with or without cause, and with
      or
      without notice.

     

    7. Term
      of Plan.
      Subject
      to shareholder approval in accordance with Section 18, the Plan shall become
      effective upon its adoption by the Board. Unless sooner terminated under Section
      14, it shall continue in effect for a term of ten (10) years from the later
      of
      (i) the effective date of the Plan, or (ii) the date of the most recent Board
      approval of an increase in the number of Shares reserved for issuance under
      the
      Plan.

     

    8. Term
      of Option.
      The
      term of each Option shall be stated in the Option Agreement; provided, however,
      that the term shall be no more than ten (10) years from the date of grant
      thereof. 

     

    9. Option
      Exercise Price and Consideration.

     

    (a) Exercise
      Price.
      The per
      share exercise price for the Shares to be issued upon exercise of an Option
      shall be such price as is determined by the Committee, but shall be subject
      to
      the following:

     

    (A) In
      the
      case of an Option granted to a Service Provider who, at the time of grant of
      such Option, owns stock representing more than ten percent (10%) of the voting
      power of all classes of stock of the Company or any Parent or Subsidiary, the
      exercise price shall be no less than 110% of the Fair Market Value per Share
      on
      the date of grant.

     

    (B) In
      the
      case of an Option granted to any other Service Provider, the per Share exercise
      price shall be no less than 85% of the Fair Market Value per Share on the date
      of grant.

     

    (ii) Notwithstanding
      the foregoing, Options may be granted with a per Share exercise price other
      than
      as required above pursuant to a merger or other corporate
      transaction.

     

    (b) Forms
      of Consideration.
      The
      consideration to be paid for the Shares to be issued upon exercise of an Option,
      including the method of payment, shall be determined by the Committee, in its
      sole and absolute discretion. Such consideration may consist of, without
      limitation, cash, check, or consideration received by the Company under a formal
      cashless exercise program adopted by the Company (if at all, in its sole and
      absolute discretion) in connection with the Plan, or any combination of the
      foregoing methods of payment. 

     

    10. Exercise
      of Option.

     

    (a) Procedure
      for Exercise; Rights as a Shareholder.
      Any
      Option granted hereunder shall be exercisable according to the terms hereof
      at
      such times and under such conditions as determined by the Committee and set
      forth in the Option Agreement. Except in the case of Options granted to
      officers, Directors and Consultants, Options shall become exercisable at a
      rate
      of no less than 20% per year over five (5) years from the date the Options
      are
      granted. Unless the Committee provides otherwise, and subject to the above
      20%
      per year over five years limitation (if applicable), vesting of Options granted
      hereunder to Optionees shall be suspended during any unpaid leave of absence.
      An
      Option may not be exercised for a fraction of a Share.

    
      
        
        

      

      
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    An
      Option
      shall be deemed exercised when the Company receives (i) written or electronic
      notice of exercise (in accordance with the Option Agreement) from the person
      entitled to exercise the Option, and (ii) full payment for the Shares with
      respect to which the Option is exercised. Full payment may consist of any
      consideration and method of payment authorized by the Committee in its sole
      and
      absolute discretion and permitted by the Option Agreement and the Plan. Until
      the Shares are issued (as evidenced by the appropriate entry on the books of
      the
      Company or of a duly authorized transfer agent of the Company), no right to
      vote
      or receive dividends or any other rights as a shareholder shall exist with
      respect to the Shares, notwithstanding the exercise of the Option. The Company
      shall issue (or cause to be issued) such Shares promptly after the Option is
      exercised. No adjustment will be made for a dividend or other right for which
      the record date is prior to the date the Shares are issued, except as provided
      in Section 12 of the Plan.

     

    Exercise
      of an Option in any manner shall result in a decrease in the number of Shares
      thereafter available, both for purposes of the Plan and for sale under the
      Option, by the number of Shares as to which the Option is
      exercised.

     

    (b) Termination
      of Relationship as a Service Provider.
      If an
      Optionee ceases to be a Service Provider, such Optionee may exercise his or
      her
      Option within thirty (30) days of termination, or such longer period of time
      as
      specified in the Option Agreement, to the extent that the Option is vested
      on
      the date of termination (but in no event later than the expiration of the term
      of the Option as set forth in the Option Agreement). If, on the date of
      termination, the Optionee is not vested as to his or her entire Option, the
      Shares covered by the unvested portion of the Option shall revert to the Plan.
      If, after termination, the Optionee does not exercise his or her Option within
      the time specified by the Committee, the Option shall terminate, and the Shares
      covered by such Option shall revert to the Plan.

     

    (c) Disability
      of Optionee.
      If an
      Optionee ceases to be a Service Provider as a result of the Optionee's
      Disability, the Optionee may exercise his or her Option within six (6) months
      of
      termination, or such longer period of time as specified in the Option Agreement,
      to the extent the Option is vested on the date of termination (but in no event
      later than the expiration of the term of such Option as set forth in the Option
      Agreement). If, on the date of termination, the Optionee is not vested as to
      his
      or her entire Option, the Shares covered by the unvested portion of the Option
      shall revert to the Plan. If, after termination, the Optionee does not exercise
      his or her Option within the time specified herein, the Option shall terminate,
      and the Shares covered by such Option shall revert to the Plan.

     

    (d) Death
      of Optionee.
      If an
      Optionee dies while a Service Provider, the Option may be exercised within
      six
      (6) months following Optionee’s death, or such longer period of time as
      specified in the Option Agreement, to the extent that the Option is vested
      on
      the date of death (but in no event later than the expiration of the term of
      such
      Option as set forth in the Option Agreement) by the Optionee’s designated
      beneficiary, provided such beneficiary has been designated prior to Optionee’s
      death in a form acceptable to the Committee. If no such beneficiary has been
      designated by the Optionee, then such Option may be exercised by the personal
      representative of the Optionee’s estate or by the person(s) to whom the Option
      is transferred pursuant to the Optionee’s will or in accordance with the laws of
      descent and distribution. If, at the time of death, the Optionee is not vested
      as to his or her entire Option, the Shares covered by the unvested portion
      of
      the Option shall immediately revert to the Plan. If the Option is not so
      exercised within the time specified herein, the Option shall terminate, and
      the
      Shares covered by such Option shall revert to the Plan.

    
      
        
        

      

      
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    11. Limited
      Transferability of Options.
      Unless
      determined otherwise by the Committee, Options may not be sold, pledged,
      assigned, hypothecated, transferred, or disposed of in any manner other than
      by
      will or the laws of descent and distribution, and may be exercised during the
      lifetime of the Optionee, only by the Optionee. If the Committee in its sole
      discretion makes an Option transferable, such Option may only be transferred
      by
      (i) will, (ii) the laws of descent and distribution, (iii) instrument to an
      inter vivos or testamentary trust in which the Option is to be passed to
      beneficiaries upon the death of the Optionee, or (iv) gift to a member of
      Optionee’s immediate family (as such term is defined in Rule 16a-1(e) of the
      Exchange Act). In addition, any transferable Option shall contain additional
      terms and conditions as the Committee deems appropriate.

     

    12. Adjustments
      Upon Changes in Capitalization, Merger or Change in Control.

     

    (a) Changes
      in Capitalization.
      Subject
      to any required action by the shareholders of the Company, the number and type
      of Shares which have been authorized for issuance under the Plan but as to
      which
      no Options have yet been granted or which have been returned to the Plan upon
      cancellation or expiration of an Option, and the number and type of Shares
      covered by each outstanding Option, as well as the price per Share covered
      by
      each such outstanding Option, shall be proportionately adjusted for any increase
      or decrease in the number or type of issued Shares resulting from a stock split,
      reverse stock split, stock dividend, combination or reclassification of the
      Common Stock, or any other increase or decrease in the number of issued shares
      of Common Stock effected without receipt of consideration by the Company. The
      conversion of any convertible securities of the Company shall not be deemed
      to
      have been “effected without receipt of consideration.” Such adjustment shall be
      made by the Board, whose determination in that respect shall be final, binding
      and conclusive. Except as expressly provided herein, no issuance by the Company
      of shares of stock of any class, or securities convertible into shares of stock
      of any class, shall affect, and no adjustment by reason thereof shall be made
      with respect to, the number, type or price of Shares subject to an
      Option.

     

    (b) Dissolution
      or Liquidation.
      In the
      event of the proposed dissolution or liquidation of the Company, the Committee
      shall notify each Optionee as soon as practicable prior to the effective date
      of
      such proposed transaction. The Committee in its discretion may provide for
      an
      Optionee to have the right to exercise his or her Option until fifteen (15)
      days
      prior to such transaction as to all of the Optioned Stock covered thereby,
      including Shares as to which the Option would not otherwise be exercisable.
      In
      addition, the Committee may provide that any Company repurchase option
      applicable to any Shares purchased upon exercise of an Option shall lapse as
      to
      all such Shares, provided the proposed dissolution or liquidation takes place
      at
      the time and in the manner contemplated. To the extent it has not been
      previously exercised, an Option will terminate immediately prior to the
      consummation of such proposed action.

     

    (c) Merger
      or Change in Control.
      In the
      event of a merger of the Company with or into another corporation, or a Change
      in Control, each outstanding Option shall be assumed, or an equivalent option
      substituted, by the Successor Corporation (or a Parent or Subsidiary of the
      Successor Corporation). For the purposes of this paragraph, the Option shall
      be
      considered assumed if, following the merger or Change in Control, the Option
      confers the right to purchase or receive, for each Share of Optioned Stock
      immediately prior to the merger or Change in Control, the consideration (whether
      stock, cash, or other securities or property) received in the merger or Change
      in Control by holders of Common Stock for each Share held on the effective
      date
      of the transaction (and if holders were offered a choice of consideration,
      the
      type of consideration chosen by the holders of a majority of the outstanding
      Shares); provided, however, that if such consideration received in the merger
      or
      Change in Control is not solely common stock of the Successor Corporation or
      its
      Parent or Subsidiary, the Committee may, with the consent of the Successor
      Corporation, provide for the consideration to be received upon the exercise
      of
      the Option, for each Share of Optioned Stock, to be solely common stock of
      the
      Successor Corporation or its Parent equal in fair market value to the per share
      consideration received by holders of Common Stock in the merger or Change in
      Control.

    
      
        
        

      

      
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    Notwithstanding
      the above, the Board, or the board of directors of the Successor Corporation,
      may determine at its sole and absolute discretion, which determination shall
      be
      final and binding on all Optionees, that, in lieu of such assumption or
      substitution: (i) all outstanding Options must be exercised (to the extent,
      and
      with respect to such number of Shares, as that they may be exercised at such
      time) within a specified period of time prior to such merger or Change in
      Control, or such Options will expire and be terminated (provided, however,
      that
      Optionees shall subsequently be entitled, and at the discretion of the Board
      or
      the board of directors of the Successor Corporation, be required, to participate
      in the merger or Change in Control by selling or exchanging (as the case may
      be)
      the Shares purchased as a result of such exercise, in the merger or Change
      in
      Control transaction); or (ii) the Company or the Successor Corporation (or
      its
      Parent or Subsidiary) shall, upon the effective date of such merger or Change
      in
      Control or within a specified period of time before or after the same, purchase,
      and thereby terminate, all outstanding Options for an amount equal to the excess
      of the Fair Market Value of the Shares that were vested under each Option at
      such time over the Exercise Price thereof, and/or to purchase all Shares that
      were purchased by Optionees under any Option prior to such merger or Change
      in
      Control, on the effective date thereof, for the Fair Market Value of such
      Shares; such amount to be paid in cash, stock or a combination thereof, as
      set
      forth above.

     

    If,
      in
      the event of a merger or Change in Control, any Options are not assumed or
      substituted as aforesaid, and the Board or the board of directors of the
      Successor Corporation does not determine otherwise (either pursuant to the
      above
      paragraph or otherwise) in its sole and absolute discretion, then any and all
      such Options shall, to the extent not exercised earlier, terminate and expire
      immediately upon the effective date of such merger or Change in
      Control.

     

    Notwithstanding
      anything contained herein to the contrary, if all or substantially all of the
      Shares of the Company are to be sold, exchanged or otherwise disposed of in
      connection with a merger or Change in Control transaction, then the Board or
      the
      board of directors of the Successor Corporation may determine, at its sole
      and
      absolute discretion, which determination shall be final and binding on all
      Optionees, that any and all Optionees that have exercised their Options be
      obligated to participate in such merger or Change in Control transaction by
      selling, exchanging or otherwise disposing of (as the case may be) all Shares
      purchased by such Optionees pursuant to such Options, on the effective date
      of
      such merger or Change in Control, for the Fair Market Value thereof; such amount
      to be paid in cash, stock or a combination thereof, as set forth hereinabove.
      For the avoidance of doubt, it is hereby clarified that the person designated
      by
      the Company as Escrow Agent (defined in Section 20 hereof) hereunder shall
      have
      full right and authority, in the name of such Optionees, to sign, execute,
      deliver, file and/or fill in, in any and all necessary or appropriate places,
      any stock assignments, stock certificates, or any other necessary or applicable
      documentation as may be required in connection with the transfer, sale, exchange
      or disposition of such Shares as aforesaid.

    
      
        
        

      

      
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    13. Time
      of Granting Options.
      The
      date of grant of an Option shall, for all purposes, be the date on which the
      Committee makes the determination granting such Option, or such later date
      as is
      determined by the Committee. Notice of the determination shall be given to
      each
      Service Provider to whom an Option is so granted within a reasonable time after
      the date of such grant.

     

    14. Amendment
      and Termination of the Plan.

     

    (a) Amendment
      and Termination.
      The
      Board may at any time amend, alter, suspend or terminate the Plan.

     

    (b) Shareholder
      Approval.
      The
      Board shall obtain shareholder approval of any Plan amendment to the extent
      necessary and desirable to comply with Applicable Laws. 

     

    (c) Effect
      of Amendment or Termination.
      No
      amendment, alteration, suspension or termination of the Plan shall impair the
      rights of any Optionee, unless mutually agreed otherwise between the Optionee
      and the Committee, which agreement must be in writing and signed by the Optionee
      and the Company. Termination of the Plan shall not affect the Committee's
      ability to exercise the powers granted to it hereunder with respect to Options
      granted under the Plan prior to the date of such termination.

     

    15. Conditions
      Upon Issuance of Shares.

     

    (a) Legal
      Compliance.
      Shares
      shall not be issued pursuant to the exercise of an Option unless the exercise
      of
      such Option and the issuance and delivery of such Shares shall comply with
      Applicable Laws and shall be further subject to the approval of counsel for
      the
      Company with respect to such compliance.

     

    (b) Investment
      Representations.
      As a
      condition to the exercise of an Option, the Committee may require the person
      exercising such Option to represent and warrant at the time of any such exercise
      that the Shares are being purchased only for investment and without any present
      intention to sell or distribute such Shares if, in the opinion of counsel for
      the Company, such a representation is required.

     

    16. Inability
      to Obtain Authority.
      The
      inability of the Company to obtain authority from any regulatory body having
      jurisdiction, which authority is deemed by the Company's counsel to be necessary
      to the lawful issuance and sale of any Shares hereunder, shall relieve the
      Company of any liability in respect of the failure to issue or sell such Shares
      as to which such requisite authority shall not have been
      obtained.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    17. Reservation
      of Shares.
      The
      Company, during the term of this Plan, shall at all times reserve and keep
      available such number of Shares as shall be sufficient to satisfy the
      requirements of the Plan.

     

    18. Information
      to Optionees.
      The
      Company shall provide to each Optionee and to each individual who acquires
      Shares pursuant to the Plan, not less frequently than annually during the period
      such Optionee has one or more Options outstanding, and, in the case of an
      individual who acquires Shares pursuant to the Plan, during the period such
      individual owns such Shares, copies of annual financial statements. The Company
      shall not be required to provide such statements to key employees whose duties
      in connection with the Company assure their access to equivalent
      information.

    
      
        
        

      

      
        -10-TELEGEN
        CORPORATION

      

      STOCK
        OPTION AGREEMENT

      Option
        No. _____

      

      This
        Stock Option Agreement (“Agreement”) is made and entered into as of the date of
        grant set forth below (the “Date of Grant”) by and between Telegen Corporation,
        a California corporation (the “Company”), and the participant named below
        (“Participant”). Capitalized terms not defined herein shall have the respective
        meanings ascribed to them in the Company’s 2007 Stock Incentive Plan (the
“Plan”). 

      

      
        	Participant:	 	  	 
	Social
                Security Number:	 	  	 
	Address:	 	  	 
	 	 	 	 
	Total
                Option Shares:	 	  	 
	Exercise
                Price Per Share (US$):	 	  	 
	Date
                of
                Grant:	 	  	 
	Expiration
                Date:	 	  	 
	Type
                of
                Stock Option	 	  	 
	(Check
                one):	 	[
                ]
                Incentive Stock Option	 
	 	 	[ ] Nonqualified Stock Option	 

      

       

      1. Grant
        of Option.
        The
        Company hereby grants to Participant an option (the “Option”) to purchase the
        total number of shares of Common Stock of the Company set forth above (the
        “Shares”) at the Exercise Price Per Share set forth above (the “Exercise
        Price”), subject
        to all of the terms and conditions of this Agreement and the Plan. If designated
        as an Incentive Stock Option above, the Option is intended to qualify as
        an
“incentive stock option” (“ISO”) within the meaning of Section 422 of the
        Internal Revenue Code of 1986, as amended (the “Code”); if designated as a
        Nonqualified Stock Option above, the Option is not intended to qualify as
        an ISO
        under the Code.

      

      2. Exercise
        of Option.

      

      2.1 Exercise
        Period of Option.
        Provided Participant continues to provide services to the Company throughout
        the
        specified period, the Option will become exercisable at the following rate:
        

      

      [describe
        vesting schedule]

       

      2.2 Expiration.
        The
        Option shall expire on the Expiration Date set forth above and must be
        exercised, if at all, on or before the Expiration Date.

      

      3. Termination.

      

      3.1 Termination
        for Any Reason Except Death or Disability.
        If
        Participant’s services are terminated for any reason, except death, disability
        or Cause, the Option, to the extent (and only to the extent) that it would
        have
        been exercisable by Participant on the date of termination, may be exercised
        by
        Participant no later than 90 days months after the date of termination, but
        in
        any event no later than the Expiration Date.

      

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      3.2 Termination
        Because of Death or Disability.
        If
        Participant’s services are terminated because of death or disability of
        Participant, the Option, to the extent (and only to the extent) that it is
        exercisable by Participant on the date of termination, may be exercised by
        Participant (or Participant’s legal representative) no later than one year after
        the date of Termination (or, if required by the policies of the Canadian
        Venture
        Exchange applicable to the Company, not more than 90 days in the event of
        disability), but in any event no later than the Expiration Date.

      

      3.3 Termination
        for Cause.
        If
        Participant’s services are terminated for Cause, the Option shall automatically
        and fully terminate upon the first notification to Participant of such
        termination.

      

      3.4 No
        Obligation to Employ.
        Nothing
        in the Plan or this Agreement shall confer on Participant any right to continue
        in the employ of, or other relationship (whether as an officer, director,
        consultant or otherwise) with, the Company or any parent, subsidiary or
        affiliate of the Company, or limit in any way the right of the Company (or
        any
        parent, subsidiary or affiliate of the Company) to terminate Participant’s
        employment or other relationship at any time, with or without
        Cause.

      

      4. Manner
        of Exercise.

      

      4.1 Stock
        Option Exercise Agreement.
        To
        exercise this Option, Participant (or in the case of exercise after
        Participant’s death, Participant’s executor, administrator, heir or legatee, as
        the case may be) must deliver to the Company an executed stock option exercise
        agreement in the form attached hereto as Exhibit
        A,
        or in
        such other form as may be approved by the Company from time to time (the
        “Exercise Agreement”), which shall set forth Participant’s election to exercise
        the Option, the number of Shares being purchased, any restrictions imposed
        on
        the Shares and any representations, warranties and agreements regarding
        Participant’s investment intent and access to information as may be required by
        the Company to comply with applicable securities laws. If someone other than
        Participant exercises the Option, then such person must submit documentation
        reasonably acceptable to the Company that such person has the right to exercise
        the Option.

      

      4.2 Limitations
        on Exercise.
        The
        Option may not be exercised unless such exercise is in compliance with all
        applicable federal and state securities laws, as they are in effect on the
        date
        of exercise. The Option may not be exercised as to fewer than 100 Shares
        unless
        it is exercised as to all Shares as to which the Option is then exercisable,
        and
        the Option may be exercised only for whole shares.

      

      4.3 Payment.
        The
        Exercise Agreement shall be accompanied by full payment of the Exercise Price
        for the Shares being purchased in cash (by check) payable to the Company.
        Payment may also be made as permitted in the Plan, to the extent deemed
        acceptable by the Company.

      

      4.4 Tax
        Withholding.
        Prior
        to the issuance of the Shares upon exercise of the Option, Participant must
        pay
        or provide for any applicable federal or state withholding obligations of
        the
        Company. If the Committee permits, Participant may provide for payment of
        withholding taxes upon exercise of the Option by requesting that the Company
        retain Shares with a Fair Market Value equal to the minimum amount of taxes
        required to be withheld. In such case, the Company shall issue the net number
        of
        Shares to the Participant by deducting the Shares retained from the Shares
        issuable upon exercise.

      

      4.5 Issuance
        of Shares.
        Provided that the Exercise Agreement and payment are in form and substance
        satisfactory to counsel for the Company, and provided that the requirements
        of
        any stock
        exchange upon which the Shares may then be listed are satisfied, the
        Company shall issue the Shares registered in the name of Participant,
        Participant’s authorized assignee, or Participant’s legal representative, and
        shall deliver certificates representing the Shares with the appropriate legends
        affixed thereto.

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      5. Notice
        of Disqualifying Disposition of ISO Shares.
        If the
        Option is intended to qualify as an ISO, and if Participant sells or otherwise
        disposes of any of the Shares acquired pursuant to the Option on or before
        the
        later of (a) the date two years after the Date of Grant, and (b) the
        date one year after issuance of such Shares to Participant upon exercise
        of the
        Option, Participant shall immediately notify the Company in writing of such
        disposition. Participant acknowledges that Participant may be subject to
        income
        tax withholding by the Company on the compensation income recognized by
        Participant from the early disposition by payment in cash or out of the current
        wages or other compensation payable to Participant.

      

      6. Compliance
        with Laws and Regulations.
        The
        exercise of the Option and the issuance and transfer of Shares shall be subject
        to compliance by the Company and Participant with all applicable requirements
        of
        federal and state securities laws and with all applicable requirements of
        any
        stock exchange on which the Company’s Common Stock may be listed at the time of
        such issuance or transfer. Participant understands that the Company is under
        no
        obligation to register or qualify the Shares with the Securities and Exchange
        Commission, any state securities commission or any stock exchange to effect
        such
        compliance.

      

      7. Nontransferability
        of Option.
        The
        Option may not be transferred in any manner other than by will or by the
        laws of
        descent and distribution and may be exercised during the lifetime of Participant
        only by Participant. The terms of the Option shall be binding upon the
        executors, administrators, successors and assigns of Participant.

      

      8. Tax
        Consequences.
        If the
        Option is granted intending to qualify as an ISO under federal income tax
        law,
        but the Company does not represent or guarantee that the Option qualifies
        as
        such. Participant agrees and acknowledges that there are or may be federal
        and
        state income tax consequences to Participant as a result of the exercise
        of the
        Option and disposition of the Shares. PARTICIPANTS ARE URGED TO CONSULT THEIR
        OWN TAX ADVISERS BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
        SHARES.

      

      9. Privileges
        of Stock Ownership.
        Participant shall not have any of the rights of a shareholder with respect
        to
        any Shares until Participant exercises the Option and pays the Exercise
        Price.

      

      10. Interpretation.
        Any
        dispute regarding the interpretation of this Agreement shall be submitted
        by
        Participant or the Company to the Committee for review. The resolution of
        such a
        dispute by the Committee shall be final and binding on the Company and
        Participant.

      

      11. Entire
        Agreement.
        The
        Plan is incorporated herein by reference. This Agreement and the Plan constitute
        the entire agreement of the parties and supersede all prior undertakings
        and
        agreements with respect to the subject matter hereof.

      

      12. Notices.
        Any
        notice required to be given or delivered to the Company under the terms of
        this
        Agreement shall be in writing and addressed to the Corporate Secretary of
        the
        Company at its principal corporate offices. Any notice required to be given
        or
        delivered to Participant shall be in writing and addressed to Participant
        at the
        address indicated above or to such other address as such party may designate
        in
        writing from time to time to the Company. All notices shall be deemed to
        have
        been given or delivered upon: personal delivery; three days after deposit
        in the
        United States mail by certified or registered mail (return receipt requested);
        one business day after deposit with any return receipt express courier
        (prepaid); or one business day after transmission by facsimile (transmission
        confirmed).

      

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      13. Successors
        and Assigns.
        The
        Company may assign any of its rights under this Agreement. This Agreement
        shall
        be binding upon and inure to the benefit of the successors and assigns of
        the
        Company. Subject to the restrictions on transfer set forth herein, this
        Agreement shall be binding upon Participant and Participant’s heirs, executors,
        administrators, legal representatives, successors and assigns.

      

      14. Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Washington, without regard to its provisions regarding conflicts
        of
        laws.

      

      15. Limitation
        on Rights; No Right to Future Grants; Extraordinary Item of
        Compensation.
        By
        entering into this Agreement and accepting the grant of the Option evidenced
        hereby, you acknowledge: (a) that the Plan is discretionary in nature and
        may be suspended or terminated by the Company at any time; (b) that the
        grant of the Option is a one-time benefit which does not create any contractual
        or other right to receive future grants of options, or benefits in lieu of
        options; (c) that all determinations with respect to any such future
        grants, including, but not limited to, the times when options will be granted,
        the number of shares subject to each option, the option price, and the time
        or
        times when each option will be exercisable, will be at the sole discretion
        of
        the Company; (d) that your participation in the Plan is voluntary;
        (e) that the value of the Option is an extraordinary item of compensation
        which is outside the scope of your employment contract, if any; (f) that
        the Option is not part of normal or expected compensation for purposes of
        calculating any severance, resignation, redundancy, end of service payments,
        bonuses, long-service awards, pension or retirement benefits or similar
        payments; (g) that the vesting of the Option ceases upon termination of
        employment or service relationship with the Company for any reason except
        as may
        otherwise be explicitly provided in the Plan or this Agreement; (h) that
        the future value of the underlying Shares is unknown and cannot be predicted
        with certainty; and (i) that if the underlying Shares do not increase in
        value, the Option will have no value.

      

      16. Employee
        Data Privacy.
        By
        entering this Agreement, you (a) authorize the Company and any agent of the
        Company administering the Plan or providing Plan recordkeeping services,
        to
        disclose to the Company or any of its affiliates any information and data
        the
        Company requests in order to facilitate the grant of the Option and the
        administration of the Plan; (b) waive any data privacy rights you may have
        with respect to such information; and (c) authorize the Company and its
        agents to store and transmit such information in electronic form.

      

      17. Acceptance.
        Participant hereby acknowledges receipt of a copy of the Plan and this
        Agreement. Participant has read and understands the terms and provisions
        thereof, and accepts the Option subject to all the terms and conditions of
        the
        Plan and this Agreement. Participant acknowledges that there may be adverse
        tax
        consequences upon exercise of the Option or disposition of the Shares and
        that
        Participant should consult a tax adviser prior to such exercise or
        disposition.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      DATED
        as
        of the Date of Grant set forth above.

       

      
        
          	 	 	 
	 	TELEGEN
                  CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	Its:	  
	 	Name:	  
	 	 	 
	 	
                
	 	 

        

  

      Participant
        acknowledges receipt of a copy of the Plan, a copy of which is annexed hereto;
        represents that Participant is familiar with the terms and provisions of
        the
        Plan and this Agreement; and hereby accepts this Option subject to all of
        the
        terms and provisions of the Plan and this Agreement. Participant further
        acknowledges that if the Plan has not been approved by the Company’s
        shareholders as of the Date of Grant of this Option, this Option shall not
        be
        exercisable until such approval has been obtained.

       

      
        	Participant:	 	  

	
              	 	
                (Signature)

              
	 	 	 
	 	 	  

	 	 	
                (Print
                  Name)

              
	 	 	 
	Date signed:
                __________________________	 	 

      

       

       

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      

      EXHIBIT
        A

      

      STOCK
        OPTION EXERCISE NOTICE

      AND

      INVESTMENT
        REPRESENTATION STATEMENT

      

      

      
        	To:	
                Telegen
                  Corporation

              

        	 	__________________________________

        	 	__________________________________

        	 	Attn: Secretary

        	 	 

      

       

      This
        Notice of Exercise is made and entered into as of _____________, 20___ (the
        “Effective Date”) by the purchaser named below (the “Purchaser”) in connection
        with stock options granted to Purchaser by Telegen Corporation, a California
        corporation (the “Company”). Capitalized terms not defined herein shall have the
        respective meanings ascribed to them in the Company’s 2007 Stock Incentive Plan
        (the “Plan”).

       

      
        

        
          	Purchaser:	 	  	 
	Total
                  Number of Shares:	 	  	 
	Purchase
                  Price Per Share:	 	   	 
	Total
                  Purchase Price:	 	   	 
	Option
                  Date of Grant:	 	   	 

        

         

      

      1. Exercise
        of Option.

      

      1.1 Exercise.
        Pursuant to exercise of that certain option (“Option”) granted to Purchaser
        under the Plan and subject to the terms and conditions of this Agreement,
        Purchaser hereby elects to purchases from the Company the total number of
        shares
        set forth above (“Shares”) of the Company’s Common Stock at a purchase price per
        share set forth above for a total purchase price set forth above (the “Purchase
        Price”).

      

      1.2 Title
        to Shares.
        The
        exact spelling of the name(s) under which Purchaser will take title to the
        Shares is:

       

      
        
          

        

        
          

        

      

       

      Purchaser
        desires to take title to the Shares as follows:

      

      
        	 	
                [
                  ]

              	
                Individual,
                  as separate property

              

      

      
        	 	
                [
                  ]

              	
                Husband
                  and wife, as community property

              

      

      
        	 	
                [
                  ]

              	
                Joint
                  Tenants

              

      

      
        	 	
                [
                  ]

              	
                Alone
                  or with spouse as trustee(s) of the following trust (including
                  date):

              

        	 	 	 

        	 	 	 

        	 	 	 

        	 	 	 

        	 	[
                ]	Other; please
                specify:
                

        	 	 	 

      

       

              

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      

      1.3 Payment.
        Purchaser hereby delivers payment of the Purchase Price in the manner permitted
        in the Stock Option Agreement by delivery of a check for the full Purchase
        Price.

      

      2. Representations
        and Warranties of Purchaser.
        Purchaser represents and warrants to the Company that:

      

      2.1 Agrees
        to Terms of the Plan.
        Purchaser has received a copy of the Plan and the Stock Option Agreement,
        has
        read and understands the terms of the Plan, the Stock Option Agreement and
        this
        Exercise Agreement, and agrees to be bound by their terms and conditions.
        Purchaser acknowledges that there may be adverse tax consequences upon exercise
        of the Option or disposition of the Shares, and that Purchaser should consult
        a
        tax adviser prior to such exercise or disposition.

      

      2.2 Purchase
        for Own Account for Investment.
        For as
        long as the Shares have not been registered under the Securities Act of 1933,
        as
        amended (the “Securities Act”), Purchaser makes the following representations:
        (a) Purchaser is purchasing the Shares for Purchaser’s own account for
        investment purposes only and not with a view to, or for sale in connection
        with,
        a distribution of the Shares within the meaning of the Securities Act; and
        (b) Purchaser has no present intention of selling or otherwise disposing of
        all or any portion of the Shares and no one other than Purchaser has any
        beneficial ownership of any of the Shares.

      

      2.3 Access
        to Information.
        Purchaser has had access to all information regarding the Company and its
        present and prospective business, assets, liabilities and financial condition
        that Purchaser reasonably considers important in making the decision to purchase
        the Shares. Purchaser has had ample opportunity to ask questions of the
        Company’s representatives concerning such matters and this investment and all
        such questions have been answered to Purchaser’s full satisfaction.

      

      2.4 Understanding
        of Risks.
        Purchaser is fully aware of (i) the highly speculative nature of the
        investment in the Shares, (ii) the financial hazards involved,
        (iii) the potential lack of liquidity of the Shares and the restrictions on
        transferability of the Shares (e.g., that Purchaser may not be able to sell
        or
        dispose of the Shares or use them as collateral for loans), (iv) the
        qualifications and backgrounds of the management of the Company; and
        (v) the tax consequences of investment in the Shares. Purchaser is capable
        of evaluating the merits and risks of this investment, has the ability to
        protect Purchaser’s own interests in this transaction and is financially capable
        of bearing a total loss of this investment.

      

      2.5 Compliance
        with Securities Laws.
        Purchaser understands that the Shares have not been registered under the
        Securities Act in reliance upon a specific exemption therefrom, which exemption
        depends upon, among other things, the bona fide nature of his or her investment
        intent as expressed herein. In this connection, Purchaser understands that,
        in
        the view of the Securities and Exchange Commission (“SEC”), the statutory basis
        for such exemption may be unavailable if his or her representation was
        predicated solely upon a present intention to hold these Securities for the
        minimum capital gains period specified under tax statutes, for a deferred
        sale,
        for or until an increase or decrease in the market price of the Securities,
        or
        for a period of one year or any other fixed period in the future.

      

      3. Restricted
        Securities.

      

      3.1 No
        Transfer Unless Registered or Exempt.
        Purchaser understands that Purchaser may not transfer any Shares and must
        hold
        the Shares indefinitely unless such Shares are registered under the Securities
        Act or qualified under applicable state securities laws or unless, in the
        opinion of counsel to the Company, exemptions from such registration and
        qualification requirements are available. Purchaser understands that only
        the
        Company may file a registration statement with the SEC and that the Company
        is
        under no obligation to do so with respect to the Shares. Purchaser has also
        been
        advised that exemptions from registration and qualification may not be available
        or may not permit Purchaser to transfer all or any of the Shares in the amounts
        or at the times proposed by Purchaser.

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      3.2 Legends.
        Purchaser understands and agrees that until
        or
        unless the Shares are registered under the Securities Act, the certificate
        evidencing the Shares will be imprinted with a legend that prohibits the
        transfer of the Shares unless they are registered or such registration is
        not
        required in the opinion of counsel for the Purchaser satisfactory to the
        Company.

      

      4. Tax
        Consequences.
        PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE FEDERAL OR STATE
        TAX
        CONSEQUENCES AS A RESULT OF PURCHASER’S PURCHASE OR DISPOSITION OF THE SHARES.
        PURCHASER ACKNOWLEDGES THAT SHE/HE HAS BEEN ADVISED TO CONSULT WITH HER/HIS
        OWN
        TAX ADVISER IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES
        AND
        THAT PURCHASER HAS HAD AN OPPORTUNITY TO DO SO. PURCHASER IS NOT RELYING
        ON THE
        COMPANY OR ITS AGENTS FOR ANY TAX ADVICE.

      

      5. Compliance
        with Laws and Regulations.
        The
        issuance and transfer of the Shares will be subject to and conditioned upon
        compliance by the Company and Purchaser with all applicable state and federal
        laws and regulations and with all applicable requirements of any stock exchange
        or automated quotation system on which the Company’s Common Stock may be listed
        or quoted at the time of such issuance or transfer.

      

      6. Governing
        Law; Severability.
        This
        Agreement shall be governed by and construed in accordance with the internal
        laws of the State of Washington, without regard to conflicts of laws. If
        any
        provision of this Agreement is determined by a court of law to be illegal
        or
        unenforceable, then such provision will be enforced to the maximum extent
        possible and the other provisions will remain fully effective and
        enforceable.

      

      7. Entire
        Agreement.
        The
        Plan and this Agreement, together with all its Exhibits, constitute the entire
        agreement and understanding of the parties with respect to the subject matter
        of
        this Agreement, and supersede all prior understandings and agreements, whether
        oral or written, between the parties hereto with respect to the specific
        subject
        matter hereof.

      

      EXECUTED
        as of the Effective Date.

      

      PARTICIPANT

      

      

      
        	  	 	SSN:	  
	
                (Signature)

              	 	 	 
	 	 	Address:	  
	   	 	 	  
	
                (Please
                  print name)

              	 	 	 

      

            

       

      
        
           

        

        
          -3-

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