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Exhibit 10.28  

 
 

DISTRIBUTOR AGREEMENT    
    

        AGREEMENT made as of the 12 day of June, 2003, by and between AltiGen Communications, Inc., a
corporation duly organized and existing under the laws of the State of Delaware, with its principal office at 47427 Fremont Blvd., Fremont, California 94538, hereinafter called the "Supplier" and
GRAYBAR ELECTRIC COMPANY, INC., a corporation duly organized and existing under the laws of the State of New York, with its principal office at 34 North Meramec Avenue, St. Louis, Missouri
63105 (Post Office Box 7231, St. Louis, Missouri 63177), hereinafter called "Graybar". 

WITNESSETH:  

        WHEREAS, the Supplier is desirous of appointing Graybar a non-exclusive distributor, and Graybar is
desirous of accepting such appointment, 

        NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, Supplier hereby appoints
Graybar its non-exclusive distributor and Graybar accepts appointment for the sale of products or material (hereinafter "Material") furnished by Supplier under this Agreement. 

        1. TERRITORY; AUTHORIZED RESELLERS.    This appointment applies throughout the United States, Canada, and Mexico. Graybar may
resell Material only to resellers included in the list of authorized resellers provided by Supplier and updated by Supplier as changes are made. 

        2. TITLE AND SHIPPING.    Title to all Material covered by this Agreement shall pass to Graybar upon delivery at the destination
designated by Graybar and shall be at the risk of Supplier until title thereto
shall have passed as herein provided. Routing of shipments may be specified by Graybar when Graybar is liable for transportation charges. Graybar is liable for all costs relating to transportation and
delivery. Graybar has transportation insurance, and Altigen will not provide duplicate coverage. Transportation costs prepaid by Supplier and added to Graybar's invoice will be at the lowest net cost
after applying all negotiated discounts obtained by Supplier from shipper. 

        3. PRICE.    All purchases of Material made by Graybar shall be upon the current terms and prices established by Supplier, as
stated in the Altigen Distributor Price List attached hereto as Exhibit A and incorporated herein by reference, and updated from time to time. Furthermore, Graybar shall be given written notice
** days in advance of the effective date of any price change. Such notice shall be sent to the attention of the Manager, Price/Cost Services at the principal office listed above and shall include
actual unit costs to Graybar (and suggested selling prices, if applicable). 

        In
the event of an increase in the price of said Material for which orders shall have been placed by Graybar, Graybar may, at its option, cancel such orders in whole or in part within **
days after receipt of notice of such price increase described in the previous paragraph. 

        Price Protection.    In the event of a decrease in Material pricing, Graybar shall be credited with an amount equal to the
difference between the price charged for such Material and the new and reduced price for any such Material in Graybar's inventory or in transit to Graybar as of the effective date of the price
decrease. To obtain price protection, within ** days of receipt of Supplier's notice of the price decrease, Graybar shall provide to Supplier a written report of (i) inventory on hand and
(ii) inventory in transit from Supplier, showing by part number the quantity of each Supplier Material in Graybar's inventory and in transit as of the effective date of the price decrease.
Price protection will not be granted in the case of special promotion. 

1

 

        3A. TAXES.    The prices referred to in this Agreement do not include taxes and other similar charges. Graybar is responsible
for, and shall pay or reimburse Supplier for, all taxes, including sales, use, value-added (VAT), general services (GST), gross receipts, excise, personal property, or other federal, state or local
taxes, export taxes and import duties, or any similar assessments based on the sale to Graybar of Material, maintenance, or other services provided under this Agreement, and any penalties, interest
and collection or withholding costs associated with any of the foregoing items, excluding taxes on Supplier's net worth and net income. Tax Exemption.
Graybar may provide Supplier with a tax exemption certificate acceptable to the taxing authorities in lieu of paying such taxes. Graybar shall reimburse Supplier for any fines, penalties, taxes and
other charges, including expenses incurred by Supplier, due to Graybar's submission of invalid information. 

        4. TERMS OF PAYMENT.    Net ** Proximo, which means that all invoices received in a calendar month are paid on the ** day of the
following calendar month. The maximum time to pay is therefore ** days and the minimum time to pay is ** days, with an average of ** days. 

        5. GENERAL INDEMNITY; EXCLUSION OF CONSEQUENTIAL OR SPECIAL DAMAGES.    

        5.1 Indemnity by Supplier    Notwithstanding disclaimers of liability for consequential or special damages contained in
Section 5.4 ("No Non-Direct Damages") or in Supplier's warranty to the contrary and provided Supplier is notified promptly and given authority, information and assistance for the
defense of same, Supplier agrees to defend and hold Graybar harmless from all claims and suits made or brought against Graybar by any third party for consequential or special damages arising from
Material purchased by Graybar hereunder except claims or suits: (i) arising from the negligence or intentional misconduct of Graybar, its employees, or agents or servants of either of them; or
(ii) to the extent based upon any material deviation between a warranty expressly extended by Graybar to any such customer and Supplier's warranty given to Graybar. 

        5.2 Indemnity by Graybar.    Notwithstanding the disclaimers of liability for consequential, special, and non-direct
damages contained in Section 5.4 ("No Non-Direct Damages"), Graybar agrees to indemnify and hold Supplier harmless from any claims, suits, proceedings, losses, liabilities, damages,
costs and expenses (inclusive of Supplier's reasonable attorneys' fees) for bodily injury or property damage, including consequential or special damages relating thereto, made against or incurred by
Supplier as a result of negligence, misrepresentation, or error or omission on the part of Graybar or representative of Graybar. 

        Graybar
shall be solely responsible for any warranties or representations made by Graybar or Graybar's employees or agents which differ from the warranty provided by Supplier in its
end-user agreement which Supplier includes with each Material sold hereunder. 

        5.3 Third-Party Claims.    Neither party shall be liable for any claim by the other party based on any third-party claim except
as expressly authorized in Section 5.1 ("Indemnity by Supplier"), Section 5.2 ("Indemnity by Graybar"), Section 7 ("Patent and Trademark Indemnification") and in Section 9
("Environmental Liability") of this Agreement. 

        5.4 No Non-Direct Damages.    EXCEPT AS EXPRESSLY STATED TO THE CONTRARY HEREIN, TO THE FULL EXTENT ALLOWED BY LAW
THE PARTIES SHALL NOT BE LIABLE TO EACH OTHER FOR ANY CLAIM, WHETHER BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), OR ANY OTHER LEGAL THEORY, FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR
PUNITIVE DAMAGES OF ANY KIND, OR FOR LOSS OF REVENUE OR PROFITS, LOSS OF BUSINESS, LOSS OF INFORMATION OR DATA, OR ANY DAMAGES THAT ARE NOT DIRECT, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR THE PERFORMANCE OR BREACH HEREOF, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF. 

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        5.5 Validity.    THESE DISCLAIMERS AND LIMITATIONS OF LIABILITY WILL NOT BE AFFECTED IF ANY REMEDY PROVIDED HEREIN FAILS OF ITS
ESSENTIAL PURPOSE. 

        6. PURCHASE ORDERS AND SUPPLY.    Purchase orders will be deemed accepted by Supplier unless rejected within two
(2) business days of receipt. Requested shipment date must comply with Supplier's stated lead-time, which will not exceed two (2) weeks. Supplier will make every reasonable
effort to furnish a sufficient quantity of said Material to meet the resale requirements of Graybar. Supplier may decline to make shipments to Graybar if Graybar is delinquent in making payments to
Supplier. 

        6A. MONTHLY POINT-OF-SALE AND INVENTORY REPORTS.    

        6A.1 Point-of-Sale Report.    During the term of this Agreement, Graybar shall provide to Supplier a
monthly report containing the following information: (i) the authorized reseller's account number, (ii) authorized reseller's name, (iii) the "ship to" destination zip code and
(iv) the part number and Graybar's cost of the Material shipped. Such report, with respect to a calendar month, shall be delivered to Supplier no later than the tenth (10th) day of the
following calendar month. 

        6A.2 Monthly Inventory Report.    Within ten (10) days after the end of each month during the term of this Agreement,
Distributor shall provide Supplier with an inventory report. 

        7. PATENT AND TRADEMARK INFRINGEMENT.    

        7.1 Defense.    Supplier hereby warrants that all of the Material sold hereunder by it to Graybar, its successors or assigns,
are and will be as of the date of shipment by Supplier free and clear of infringement of any patent valid in the United States, Canada, or Mexico, or any trademark registered in the United States,
Canada, or Mexico. Supplier agrees to defend any and all actions and suits alleging any infringement of any patent valid in the United States, Canada, or Mexico, or any trademark registered in the
United States, Canada, or Mexico (regardless of whether such patent or trademark was in effect on the date of shipment of the Material) that may at any time be brought against Graybar, or its
successors or assigns, or any of its or their customers, to pay all costs and expenses incurred with Supplier's prior written authorization, and to satisfy all final judgments and decrees against the
defendant or defendants or settlement agreed to by Supplier in such actions or suits, but Supplier shall not be liable for any settlement incurred by Graybar without Supplier's prior written
authorization; provided that (i) the Supplier shall have prompt written notice of the commencement of any such action or suit, (ii) Graybar gives Supplier the right to control and direct
the investigation, and preparation, and full opportunity to defend and settle such action or suit, through counsel of Supplier' choice; and (iii) Graybar gives Supplier assistance and full
cooperation for the defense of such action or suit. 

        7.2 Exclusions.    The provisions of the foregoing indemnity shall not apply with respect to any instances of alleged
infringement based upon or arising out of the use of such Material in any manner for which the Material was not designed, or for use of Material other than the uses and distributions designated by
Supplier, for use of any Material that has been modified by Graybar or any third party, or for use of any Material in connection with or in combination with any equipment, devices or software that
have not been supplied by Supplier, unless such connection or combination arises from standard, expected telephony usage. Notwithstanding any other provisions hereof, the foregoing indemnity shall not
apply with respect to any infringement based on Graybar's activities occurring subsequent to its receipt of notice of any claimed infringement or activities in violation of written instructions given
to Graybar by Supplier, unless Supplier shall have given Graybar written permission to continue to market and distribute the allegedly infringing Material. 

        7.3 Supplier's Solutions.    If Material is, or in Supplier's opinion might be, held to infringe as set forth above, Supplier
may, at its option and expense, replace or modify such Material so as to avoid 

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infringement,
or procure the right for Graybar to continue the use and resale of such Material. If neither of such alternatives is, in Supplier's opinion, reasonably possible, the infringing Material
shall be returned to Supplier, and Supplier's sole liability, in addition to its obligation to reimburse any awarded damages, costs and expenses set forth above, shall be to refund the purchase price
paid for such Material by Graybar. Supplier is not obligated to accept new orders for Materials which are subject to a Claim covered under this Section. 

        7.4 ** Remedy.    THIS SECTION STATES **' ** RESPONSIBILITY AND LIABILITY TO **, AND **'S ** REMEDY FROM **, FOR ANY CLAIMS
AGAINST ** FOR ACTUAL OR ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF ANY INTELLECTUAL PROPERTY RIGHT BY ANY MATERIAL ** HEREUNDER OR **, AND IS IN ** AND ** OTHER EXPRESS, IMPLIED OR STATUTORY
WARRANTIES, TERMS, OR CONDITIONS TO ** REGARDING
INFRINGEMENT AND MISAPPROPRIATION. ** may ** only to ** ** obligations as stated here in this Section 7, but may not obligate ** to provide any additional intellectual property **. 

        8. PRODUCT LIABILITY INSURANCE.    Supplier will furnish Graybar with a Certificate of Insurance evidencing Product Liability
Coverage with protection extending to Graybar under a Vendors Endorsement. Such insurance shall cover all Material sold by Supplier to Graybar and shall be maintained in companies reasonably
acceptable to Graybar with minimum limits of liability of $** combined single limit per occurrence with a policy aggregate of $**. 

        9. ENVIRONMENTAL LIABILITY.    For purposes of this Agreement, "Hazardous Substances" shall be defined as any Material that:
(a) is a hazardous substance as defined under U.S. federal or state law; or (b) includes any extremely hazardous substance; toxic substance or chemical; radioactive material; petroleum;
oil; asbestos-containing material; or any other contaminant or pollutant. If any of the Material to be sold hereunder is considered a Hazardous Substance, or might otherwise be subject to regulation
under any environmental, health or safety laws or regulations, Supplier will notify Graybar in writing prior to the purchase of such Material and will provide, in accordance with applicable law,
instructions on the proper use, handling and disposal of the Material, in the form of a Material Safety Data Sheet (MSDS). Within ** days after receipt of notice that the Material to be purchased
contains Hazardous Substances, Graybar may, at its option, cancel such orders. 

        Supplier
shall, at its own expense, defend or settle any claim, suit, or proceeding ("Claim") that is instituted against Graybar, its successors, assigns, agents or employees
("Indemnitees") by a third party to the extent such Claim arises out of or is in any way related to any environmental contamination, injury or damage to natural resources or property, or injury to or
death of persons, resulting from or related to (i) the release, spilling, leaking, or discharging of any Hazardous Substance by the Material or packaging provided by Supplier, when used in
accordance with Supplier's instructions and disposed of in accordance with legal requirements, or (ii) liability resulting from dumping, use, storage, treatment, or disposal of the Material or
packaging in accordance with instructions provided by Supplier in the MSDS; except to the extent caused by the negligence or willful misconduct of any Indemnitee, or by the negligence or willful
misconduct of any third party, and Supplier shall pay all damages awarded therein against any Indemnitee or agreed upon in settlement by Supplier. This indemnity is conditioned upon the Indemnitee
(i) giving Supplier prompt notice in writing of any covered Claim or threat thereof, (ii) permitting Supplier sole control, through counsel of Supplier's choice, to defend and/or settle
such Claim; and (iii) giving Supplier all the needed information, assistance and authority, at Supplier's expense, to enable Supplier to defend or settle such Claim. 

        10. LIMITED WARRANTY; REPAIR OR REPLACEMENT.    

        10.1 AltiGen Communications Material Warranty.    Supplier warrants the Material TO END USERS ONLY pursuant to the terms and
conditions of the End-User Agreement and no warranty is 

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extended
to Graybar. Supplier's End-User Agreement is included with each unit of Material, and must be passed through by Graybar, unchanged. 

        10.2 Warranty Procedures.    Supplier will repair or replace, at its own expense,, for a period of one year from the date of
purchase by Graybar's customer or by the end user, any parts of the Material manufactured by Supplier or sold by it which parts do not substantially conform to Supplier's end-user warranty
when used for the intended purposes. Defective Material may be returned by Graybar's customer or by the end user, or by Graybar provided Graybar obtains a Returned Material Authorization (RMA) number
prior to accepting the return from its customer. The customer pays transportation charges to return the defective Material to Supplier, and Supplier pays transportation charges to ship the replaced or
repaired Material to the customer. If neither repair nor replacement is reasonably available, Supplier may, in its sole discretion, refund to the customer who submitted the defective Material the
purchase price paid for the defective Material. All Material and parts that are replaced will become the property of Supplier. Replacement Material or parts may be new or reconditioned. Supplier
warrants any replaced or repaired Material or part for ninety (90) days from shipment, or the remainder of the initial warranty period, whichever is longer. Should Supplier's warranty exceed
one year, then such longer term is applicable. In the event of "out of box" failures, the warranty procedures stated above apply. 

        10.3 Limitations and Disclaimer.    EXCEPT FOR THE EXPRESS WARRANTY SET FORTH IN THE END-USER AGREEMENT, AND THE
EXPRESS WARRANTY OF NON-INFRINGEMENT STATED IN SECTION 7.1 ("PATENT AND TRADEMARK INFRINGEMENT DEFENSE") SUPPLIER EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, EITHER IN
FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE, OR ARISING FROM THE COURSE OF DEALING BETWEEN THE PARTIES OR USAGE OF TRADE, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE. 

        10.4    NO PERSON IS AUTHORIZED TO MAKE ANY OTHER WARRANTY OR REPRESENTATION BINDING UPON SUPPLIER CONCERNING THE PERFORMANCE OF
THE MATERIAL OTHER THAN AS PROVIDED IN THE END-USER AGREEMENT. GRAYBAR SHALL MAKE NO OTHER WARRANTY, EXPRESS OR IMPLIED, ON BEHALF OF SUPPLIER. 

        10.5 Toll Fraud    Graybar is forbidden from stating or implying that Supplier Material provides immunity from fraudulent
intrusion ("Toll Fraud"). 

        10A GRAYBAR'S WARRANTY.    Graybar hereby represents and warrants to Supplier that neither this Agreement (nor any term hereof)
nor the performance of or exercise of rights under this Agreement, is restricted by, contrary to, in conflict with, ineffective under, requires registration or approval or tax withholding under, or
affects Supplier's intellectual property rights (or the duration thereof) under, or will require any compulsory licensing under, any law or regulation of any organization, country, group of countries
or political or governmental entity to which Graybar is subject. 

        10B EXPORT COMPLIANCE.    Graybar agrees not to export, either directly or indirectly, the Material or any documentation related
thereto without first obtaining any required license or other approval from the U.S. Department of Commerce or any other agency or department of the United States Government. If Graybar exports any
Material or related documentation from the United States or re-exports any Material or related documentation from a foreign destination, Graybar shall ensure that the
export/re-export or import of the Material and related documentation is in compliance with all laws, regulations, orders or other restrictions of the United States and the appropriate
foreign government. 

5

 

        11. STOCK BALANCING PROGRAM.    Supplier recognizes that from time to time, it may be necessary for Graybar, in order to
properly perform its obligations hereunder, to reduce, exchange or eliminate certain Material from its inventory. Accordingly, Supplier shall allow quarterly returns with no restocking charges
provided Graybar prepays associated freight and insurance costs and subject to all of the following conditions: 

	•
	The
quarterly return is limited to a total of ** percent (**%) of the value of Material shipped to Graybar in the previous calendar quarter;

	•
	the
returned Material is (i) new and in factory-sealed, unopened boxes, and (ii) in the current Altigen Distributor Price List; and

	•
	Graybar
submits a new, non-cancellable order, for immediate shipment at the time of the return, in an amount equal to or greater than the value of the returned
Material; 

Supplier
will issue a credit memo for the returned Material in the amount of the lesser of (i) current price as stated in the Altigen Distributor Price List or (ii) the price invoiced to
and actually paid by Graybar less any rebates and price protection. 

        12. NON-ASSIGNABILITY.    This agreement shall not be transferable or assignable by either party hereto without the
written consent of the other party, which may not be unreasonably delayed or withheld. Until such written consent is obtained, the party transferring or assigning this agreement shall not be relieved
of the obligations hereunder. 

        13. TERMINATION.    The distributorship hereby created may be terminated only (a) by an agreement in writing duly signed
by the parties hereto; or (b) by either party at will, with or without cause, upon not less than ninety (90) days' notice in writing given by certified mail or other method allowed by
Section 24 ("Notices") to the other party; (c) by either party if the other party commits a material breach of any obligation hereunder which is not cured within thirty (30) days'
after issuance of written notice to the breaching party, which notice shall state the breach upon which termination is based, or (d) by either party hereto upon one (1) day's like notice
in the event the other party hereto attempts to assign this Agreement or any rights thereunder without the other party's written consent, or either party ceases to function as a going concern or to
conduct its operations in the normal course of business, or a receiver is appointed or applied for by the party, or a petition under the Federal Bankruptcy Act is filed by or against either party, or
either party makes an assignment for the benefit of creditors. Termination shall not relieve Graybar of the obligation to pay all sums due hereunder. 

        14. REPURCHASE AFTER TERMINATION.    Within thirty (30) days after the termination of the distributorship hereby created,
(a) if Graybar terminates for convenience or Supplier terminates for Graybar's breach or bankruptcy, Supplier may, at its option, repurchase from Graybar any or all Material and all repair and
replacement parts therefor which are new and unused of which Graybar is then the owner, at the net price paid by Graybar, or at Supplier's then current net price to distributors generally, whichever
is lower, Graybar to bear all return transportation costs; or (b) if Supplier terminates for convenience or Graybar terminates for Supplier's breach or bankruptcy, then Supplier shall be
obligated to repurchase all of the Material and all the repair and replacement parts from Graybar at the said price set forth above, the Supplier to bear all return transportation costs. 

        15. DELIVERIES AFTER TERMINATION.    After a date for termination of the distributorship hereby created shall have been
established by notice or agreement, the Supplier shall be obligated to deliver, and Graybar shall be obligated to accept, such of the Material as Graybar shall have ordered from the Supplier prior to
the date for termination; provided, however, that in no event shall the Supplier be obligated to deliver, or Graybar be obligated to accept, any of such Material after the date of such termination. 

6

 

        16. SALES AFTER TERMINATION.    The acceptance of any order from, or the sale of any Material to, Graybar after the termination
of the distributorship hereby created shall not be construed as a renewal or extension thereof nor as a waiver of termination, but in the absence of a new written Agreement, all such transactions
shall be governed by provisions identical with the provisions of this Agreement. 

        17.    NO LIABILITY FOR TERMINATION. Neither party shall, by reason of
termination of distributorship of said Material, be liable to the other for compensation, reimbursement or damages on account of the loss of prospective profits on anticipated sales, or on account of
expenditures, investments, leases or commitments in connection with the business or goodwill of the other. The foregoing shall not affect either party's claim for damages arising out of any breach
which led to such termination. 

        18.    FAILURE TO ENFORCE. The failure of either party to enforce at any time,
or for any period of time, the provisions hereof shall not be construed to be a waiver of such provisions unless accompanied by a clear written statement that such provision is waived. A waiver of any
default hereunder or of any of the terms and conditions of this Agreement shall not be deemed to be a continuing waiver or a waiver of any other default or of any other term or condition, or a waiver
of the right of such party thereafter to enforce each and every such provision. 

        19.    ENTIRE AGREEMENT; NO ORAL AGREEMENTS. This Agreement is intended as the
complete, final and exclusive statement of the terms of the agreement between the parties and supersedes all prior understandings, writings, proposals, representations or communications, oral or
written, relating to the subject matter hereof. Although Graybar may use its standard purchase order and other forms, and Supplier may use its standard order acknowledgment and invoice, the terms and
conditions of this Agreement will prevail over such forms, and any inconsistent, conflicting or different terms in such forms will be of no effect. Except where unilateral modification is specifically
authorized herein, any amendments to this Agreement must be in writing and executed by both parties. 

        20.    TERMINATION OF PRIOR AGREEMENTS. This Agreement terminates and supersedes
all prior Agreements between the parties, except those listed below which shall continue in full force and effect: 

        Exceptions:
None 

        21. HEADINGS.    Headings of this Agreement are inserted solely for the purpose of convenience of reference and are in no manner
to be construed as a part of the Agreement. 

        22. RELATIONSHIP OF THE PARTIES.    The parties shall at all times during the term of this Agreement act as, and shall represent
themselves to be, independent contractors, and not an agent,
partner, joint venturer, or employee of the other party. Neither party will have the right to enter into any contracts or binding commitments in the name of the other party or on such other party's
behalf. 

        23. FORCE MAJEURE.    Neither party shall be liable to the other party for the failure to perform any of its obligations
hereunder (other than the payment of money) resulting from acts of the other party, acts of civil or military authority, governmental priorities, earthquake, fire, flood, epidemic, quarantine, energy
interruptions, strike, labor trouble, war, riot, accident, shortage, delay in transportation, or any other causes beyond the reasonable control of the party whose performance is delayed. 

        24. NOTICES.    Notices shall be given in writing to the address stated immediately below, or to such other address as shall be
given by either party to the other in writing. Any notice involving breach or termination shall be sent by recognized overnight courier or by certified mail, return receipt requested. All other
notices may additionally be sent by fax or e-mail with an automatic confirmation 

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of
transmission by the transmitting machine. All notices shall be deemed to have been given and received on the earlier of actual delivery (except that faxes and e-mails sent on a
non-business day will be deemed received on the next business day) or three (3) days from the date of postmark. 

	

 	
 	

 
	To Graybar:	 	To Supplier:
	

Graybar Electric Company, Inc.	
 	

AltiGen Communications, Inc.
	34 N. Meramec Ave	 	47427 Fremont Blvd.
	Clayton, MO 63105	 	Fremont, CA 94538
	Attn: David Bender	 	Attn: Philip M. McDermott, CFO
	e-mail: david.bender@gbe.com	 	e-mail: pmcdermott@altigen.com
	Fax: 314-573-9288	 	Fax: 510/252-9738
	Telephone: 314-573-9318	 	Telephone: 510/580-7904

        25. SEVERABILITY.    In the event any provision of this Agreement is found to be invalid, illegal or unenforceable, a modified
provision shall be substituted which carries out as nearly as possible the original intent of the parties, and the validity, legality and enforceability of any of the remaining provisions shall not in
any way be affected or impaired thereby. 

        26. GOVERNING LAW.    THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND ALL DISPUTES HEREUNDER SHALL BE GOVERNED BY, THE
LAWS OF THE STATE OF CALIFORNIA, EXCLUDING ITS CONFLICT OF LAWS RULES. The United Nations Convention on Contracts for the International Sale of Goods (1980) is hereby excluded in its entirety from
application to this Agreement. 

        27. SURVIVAL.    The following sections will survive expiration or termination of this Agreement: 

	3A.
	Taxes

	4.
	Terms
of Payment 
	5.
	General
Indemnity; Exclusion of Consequential or Special Damages 
	7.
	Patent
and Trademark Infringement 
	9.
	Environmental
Liability 
	10.
	Limited
Warranty; Repair or Replacement 
	10B.
	Export
Compliance 
	14.
	Repurchase
after Termination 
	15.
	Deliveries
after Termination 
	16.
	Sales
After Termination 
	17.
	No
Liability for Termination 
	18.
	Failure
to Enforce 
	19.
	Entire
Agreement; No Oral Agreements 
	21.
	Headings

	23.
	Force
Majeure 
	24.
	Notices

	25.
	Severability 
	26.
	Governing
Law 
	27.
	Survival 

8

 

        IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed by a duly authorized officer on the date(s) shown below,
to be effective as of the day and year first above written. 

	

 	
 	

 
	ALTIGEN COMMUNICATIONS, INC.
 Supplier	 	GRAYBAR ELECTRIC COMPANY, INC.
	

 	
 	

 
	/s/  PHILIP MCDERMOTT      
 Signature (Vice) President (CFO)	 	/s/  RICHARD D. OFFENBACHER      
 Signature (Vice) President
	

 	
 	

 
	Philip McDermott
 Type or print name of person whose signature appears above	 	Richard D. Offenbacher
 Type or print name of person whose signature appears above
	

 	
 	

 
	June 12, 2003
 Date	 	August 27, 2003
 Date

SG-930 (10/01) 

9

   Exhibit A

Graybar / AltiGen Distributor Agreement  

Effective June 12, 2003  

	AltiGen Communications, Inc.

Distributor Price List	 	

	
 Part Number
 
	
 	

Description
	
 	

 
	
 	

Price

	AltiServ Office	 	 	 	 	 
	 	ALTI-SERV1-IP	 	08x04x12 AltiServ1 IP-PBX Solution w/ AltiWare v4.6, 8 Alti-IP 600 Phones, and 16 Station Licenses	 	 	 	$	**
	 	ALTI-SERV2-IP	 	00x00x12 AltiServ2 IP-PBX Solution w/AltiWare v4.6 and 12 Station Licenses	 	Note: 17	 	$	**
	 	ALTI-OFFICE1A	 	04x08 AltiServ Small Office Solution w/ AltiWare OE v4.6 and 12 Station License	 	 	 	$	**
	 	ALTI-OFFICE2A-R	 	00x24 AltiServ Office Solution w/ AltiWare OE v4.6 and 24 Station License	 	 	 	$	**
	 	ALTI-OFFICE3-R	 	24x36 AltiServ Office Solution w/ AltiWare OE v4.6 and 36 Station License	 	 	 	$	**
	
Alti-IP 600 IP Phone	
 	

 	
 	
 	

 
	 	ALTI-IP600	 	Alti-IP 600 IP Phone	 	 	 	$	**
	
AltiWare Telephony Boards	
 	

 	
 	
 	

 
	 	ALTI-CD0408UD-SPH001	 	CID Quantum Platform, 4 trunks & 8 extensions. Rev. D	 	Note: 1	 	$	**
	 	ALTI-CD0804UD-SPH001	 	CID Quantum Platform, 8 trunks & 4 extensions. Rev. D	 	Note: 1	 	$	**
	 	ALTI-CD0012UD-SPH001	 	CID Quantum Platform, 12 extensions. Rev. D	 	Note: 1	 	$	**
	 	ALTI-TTAS-12	 	PCI Analog Station Board, 12 extensions	 	Note: 2	 	$	**
	 	ALTI-TTRS-12	 	Triton Resource Board with 12 session support	 	Note: 3	 	$	**
	 	ALTI-TTAT-12	 	PCI 12 port Analog Trunk Board—Loopstart Only	 	Note: 7	 	$	**
	 	ALTI-TTAT-12GS	 	PCI 12 port Analog Trunk Board—Loopstart / Groundstart	 	Note: 7	 	$	**
	 	ALTI-T1E1-1	 	Triton T1 / E1 Board (4.0i and 4.5 and above for E1)	 	Note:12	 	$	**
	 	ALTI-TTT1-1	 	Triton T1/PRI Board	 	 	 	$	**
	 	ALTI-TTIP-8	 	Triton VoIP Board with 8 / 12 ports	 	Note: 4	 	$	**
	 	ALTI-30IPLIC460	 	30-Port G.711 upgrade license for ALTI-TTIP-8	 	Note: 8	 	$	**
	 	
AltiWare Software	
 	

 	
 	
 	

 
	 	ALTI-OE460E	 	AltiWare Open Edition (OE) Release 4.6	 	Note:11	 	$	**
	 	
v4.6 AltiWare Station Licensing	
 	

 	
 	
 	

 
	 	ALTI-OELIC460-012	 	AltiWare OE 4.6—12 Station Licenses	 	 	 	$	**
	 	ALTI-OELIC460-024	 	AltiWare OE 4.6—24 Station Licenses	 	 	 	$	**
	 	 	 	 	 	 	 	 

10

 

	 	ALTI-OELIC460-048	 	AltiWare OE 4.6—48 Station Licenses	 	 	 	$	**
	 	ALTI-OELIC460-072	 	AltiWare OE 4.6—72 Station Licenses	 	 	 	$	**
	 	
v4.6 AltiWare Software Options	
 	

 	
 	
 	

 
	 	ALTI-ACOLIC460	 	AltiConsole 4.6 License Key	 	Note: 22	 	$	**
	 	ALTI-AVWLIC460	 	AltiView 4.6 License Key	 	Note: 22	 	$	**
	 	ALTI-CRALIC460	 	AltiServ Call Router Advanced w/ Queue Announcements	 	 	 	$	**
	 	
v4.6 AltiWare Contact Center Software	
 	

 	
 	
 	

 
	 	ALTI-ACCLIC460	 	AltiServ Contact Center(ACC) Optional Call Center for AltiServ	 	Note: 15	 	$	**
	 	ALTI-AGSLIC460-01	 	1 AltiServ Contact Center(ACC) Agent Seat	 	Note: 16	 	$	**
	 	ALTI-AGSLIC460-05	 	5 AltiServ Contact Center ACC Agent Seats	 	Note: 16	 	$	**
	 	ALTI-AGSLIC460-10	 	10 AltiServ Contact Center ACC Agent Seats	 	Note: 16	 	$	**
	 	ALTI-AGCLIC460-01	 	1 AltiServ Contact Center ACC AltiAgent client Session	 	Note: 16	 	$	**
	 	ALTI-AGCLIC460-05	 	5 AltiServ Contact Center ACC AltiAgent client Sessions	 	Note: 16	 	$	**
	 	ALTI-AGCLIC460-10	 	10 AltiServ Contact Center ACC AltiAgent client Sessions	 	Note: 16	 	$	**
	 	ALTI-SPCLIC460-01	 	1 AltiServ Contact Center ACC AltiSupervisor client Session	 	Note: 16	 	$	**
	 	ALTI-SPCLIC460-05	 	5 AltiServ Contact Center ACC AltiSupervisor clients Sessions	 	Note: 16	 	$	**
	 	
v4.6 AltiWare Upgrades from OE 4.0 and higher	
 	

Note: 9	
 	
 	

 
	 	ALTI-OE460E-UP-012	 	AltiWare OE 4.6 Upgrade for 12 Station Licenses	 	 	 	$	**
	 	ALTI-OE460E-UP-024	 	AltiWare OE 4.6 Upgrade for 24 Station Licenses	 	 	 	$	**
	 	ALTI-OE460E-UP-048	 	AltiWare OE 4.6 Upgrade for 48 Station Licenses	 	 	 	$	**
	 	ALTI-OE460E-UP-072	 	AltiWare OE 4.6 Upgrade for 72 Station Licenses	 	 	 	$	**
	 	
v4.6 AltiWare Software Option Upgrades from OE4.0 and higher	
 	

Note: 9	
 	
 	

 
	 	ALTI-ACOLIC460-UP	 	AltiConsole 4.6 Upgrade	 	 	 	$	**
	 	ALTI-AVWLIC460-UP	 	AltiView 4.6 Upgrade	 	 	 	$	**
	 	ALTI-ACCLIC460-UP	 	AltiServ Contact Center 4.6 Upgrade	 	 	 	$	**
	
v4.0a AltiWare Licensing	
 	

 	
 	
 	

 
	 	ALTI-OELIC-012	 	AltiWare OE 4.0a—12 Station Licenses	 	 	 	$	**
	 	ALTI-OELIC-024	 	AltiWare OE 4.0a—24 Station Licenses	 	 	 	$	**
	 	ALTI-OELIC-048	 	AltiWare OE 4.0a—48 Station Licenses	 	 	 	$	**
	 	ALTI-OELIC-072	 	AltiWare OE 4.0a—72 Station Licenses	 	 	 	$	**
	
v4.0a AltiServ Software Options	
 	

 	
 	
 	

 
	 	ALTI-ACO400AE	 	AltiConsole 4.0a For OE 4.0a only	 	 	 	$	**
	 	ALTI-CTR400AE	 	AltiWare Center 4.0a For OE 4.0a only	 	 	 	$	**
	 	ALTI-AVW400AE	 	AltiView 4.0a For OE 4.0a client software	 	Note: 5	 	$	**
	 	
AltiContact Manager Product	
 	

 	
 	
 	

 
	
AltiContact Manager Starter Package	
 	

 	
 	
 	

 
	 	ACM-PLATFORM	 	ACM IP-Contact Center Solution w/ 12 Agent, 12 AltiAgent sessions, and 1 AltiSupervisor session.	 	 	 	$	**
	 	 	 	 	 	 	 	 

11

 

	 	
AltiContact Manager Business User Licensing	
 	

 	
 	
 	

 
	 	ACM-ACBLIC460-01	 	ACM 1 Business User License	 	Note: 21	 	$	**
	 	ACM-ACBLIC460-12	 	ACM 12 Business User License	 	Note: 21	 	$	**
	 	ACM-ACBLIC460-24	 	ACM 24 Business User License	 	Note: 21	 	$	**
	 	ACM-ACBLIC460-48	 	ACM 48 Business User License	 	Note: 21	 	$	**
	 	ACM-ACBLIC460-72	 	ACM 72 Business User License	 	Note: 21	 	$	**
	 	
ACM Contact Center Expansion Software	
 	

 	
 	
 	

 
	 	ACM-AGSLIC460-01	 	1 ACM Agent Seat	 	Note: 18	 	$	**
	 	ACM-AGSLIC460-05	 	5 ACM Agent Seats	 	Note: 18	 	$	**
	 	ACM-AGSLIC460-10	 	10 ACM Agent Seats	 	Note: 18	 	$	**
	 	ACM-AGSLIC460-20	 	20 ACM Agent Seats	 	Note: 18	 	$	**
	 	

ACM-AGCLIC460-01	
 	

1 ACM AltiAgent client session	
 	

Note: 18	
 	
$	

**
	 	ACM-AGCLIC460-05	 	5 ACM AltiAgent client sessions	 	Note: 18	 	$	**
	 	ACM-AGCLIC460-10	 	10 ACM AltiAgent client sessions	 	Note: 18	 	$	**
	 	ACM-AGCLIC460-20	 	20 ACM AltiAgent client sessions	 	Note: 18	 	$	**
	 	

ACM-SPCLIC460-01	
 	

1 ACM AltiSupervisor client session	
 	

Note: 18	
 	
$	

**
	 	ACM-SPCLIC460-05	 	5 ACM AltiSupervisor client sessions	 	Note: 18	 	$	**
	 	ACM-SPCLIC460-10	 	10 ACM AltiSupervisor client sessions	 	Note: 18	 	$	**
	 	ACM-SPCLIC460-20	 	20 ACM AltiSupervisor client sessions	 	Note: 18	 	$	**
	 	

ACM-RECLIC460-01	
 	

1 ACM Centralized Recording Seat	
 	

Note: 20	
 	
$	

**
	 	ACM-RECLIC460-05	 	5 ACM Centralized Recording Seats	 	Note: 20	 	$	**
	 	ACM-RECLIC460-10	 	10 ACM Centralized Recording Seats	 	Note: 20	 	$	**
	 	
ACM Software Options	
 	

 	
 	
 	

 
	 	ACM-CRALIC460	 	ACM Call Router Advanced w/ Queue Announcements	 	 	 	$	**
	 	ACM-WEBLIC460	 	ACM AltiWeb	 	Note: 19	 	$	**
	 	ALTI-ACOLIC460	 	AltiConsole 4.6	 	Note: 22	 	$	**
	 	ALTI-AVWLIC460	 	AltiView 4.6	 	Note: 22	 	$	**
	
Peripherals	
 	

 	
 	
 	

 
	 	CBL-25M50-01	 	DB25 to 50-pin Telco cable, Male to Male	 	 	 	$	**
	 	CBL-MVIP22-01	 	MVIP cable with 22 connectors	 	 	 	$	**
	 	CBL-P12DC-06	 	6 connector, PC to 12Vdc power supply cable for ALTI-TTAS-12	 	 	 	$	**
	 	

DOC-RFG01-04	
 	

4 User Pocket Reference Guides	
 	

 	
 	
$	

**
	 	DOC-ICM01-400	 	Installation Configuration & Maintenance Manual (OE 4.0a)	 	 	 	$	**
	 	DOC-ICM01-460	 	Installation Configuration & Maintenance Manual (OE 4.6)	 	 	 	$	**
	 	DOC-ACMICM-460	 	Installation Configuration & Maintenance Manual (ACM)	 	 	 	$	**
	 	DOC-AVWMAN460	 	8 AltiView User Guides in one package (OE 4.6)	 	 	 	$	**
	 	DOC-CTRMAN-400	 	8 Center 4.0a User Guides in one package	 	 	 	$	**
	 	DOC-ATCMAN-460	 	8 AltiClient User Manual in one package	 	 	 	$	**
	 	MSC-PANEL-02	 	12 Port Connection Panel with 50-pin F Telco connector	 	 	 	$	**
	 	ALTI-PIF4	 	4 port Power Influence Filter	 	 	 	$	**
	 	 	 	 	 	 	 	 

12

 

	 	ALTI-RF0012	 	RF Filter 12 Ports	 	 	 	$	**
	 	ALTI-E1-BALUN	 	E1 7 Ohm DIN 1.6/5.6 coax to 120 twisted pair BALUN	 	Note: 10	 	$	**
	 	
Not for Resale Kit	
 	

 	
 	
 	

 
	 	ALTI-NFR4600	 	Dealer Demo Kits—OE 4.6, AltiConsole, ACC, 12 port station board, 12-port VoIP card	 	 	 	$	**
	 	ALTI-NFR460Q	 	Dealer Demo Kits—OE 4.6, AltiConsole, ACC, 4x8 analog Quantum board, 12-port VoIP card	 	 	 	$	**
	 	ALTI-NFRLIC-460A	 	Optiion OE Demo ACC, AltiConsole, Call Router	 	Note: 13	 	$	**

Notes:  

	1)
	All
four Quantum boards, ALTI-CDXXXXUD-SPH001, only support phones with FSK message waiting.

	2)
	Ships
only supporting FSK message waiting phone sets.

	3)
	A
resource board is required when supervisors monitor agents, or when a voice recording system is used to monitor calls.

	4)
	In
OE 4.5 and above, ALTI-TTIP-8 is upgraded to 12-ports. In OE 4.0a & 3.5, ALTI-TTIP-8 is 8-ports only.

	5)
	It
is only shipped with one manual. If you wish additional manuals, order DOC-AVWMAN, which is an 8-pack of AltiView manuals.

	7)
	ALTI-TTAT-12
and ALTI-TTAT-12GS are only supported in AltiWare OE 4.0a and above.

	8)
	Requires
ALTI-TTIP-8 & OE 4.5 or above

	9)
	Users
wishing to upgrade from versions <3.5 must purchase OE 4.6 as new.

	10)
	ALT1-E1-BALUN
to be used with each E1 installation.

	11)
	Includes
Software CD-ROM and Manuals Only

	12)
	ALTI-T1E1-1
is a T1 / PRI / E1 software configurable board. Currently, E1 is only supported on AltiWare 4.0i, 4.5 and 4.6. The E1 protocol support is for E1 R2 MF
(TelMex), E1 DTMF(Telnor) and E1 PRI(UK) protocols.

	13)
	ALTI-NFROFFICE
requires the purchase of an ALTI-OFFICEx product

	15)
	Support
for AltiServ workgroups, AltiView, 10 agent seats, 10 AltiAgents, 1 AltiSupervisor and detailed statistics reports

	16)
	ACC
Agent seats, ACC AltiAgent sessions and ACC AltiSupervisor sessions require ALTI-ACCLIC460 software upgrade

	17)
	These
products are CE certified for distribution in Europe.

	18)
	ACM
Agent seats, ACM AltiAgent sessions and ACM AltiSupervisor sessions require ACM-PLATFORM starter

	19)
	Require
SDK Connection license per AltiWeb concurrent session

	20)
	Enables
centralized concurrent recording sessions on PCI analog extension ports. Does not include playback or management software.

	21)
	Used
to increase business users on AltiContact Manager Platform

	22)
	AltiConsole
and AltiView are common applications across AltiServ and AltiContact Manager platforms 

13

QuickLinks

DISTRIBUTOR AGREEMENTFiled by Automated Filing Services Inc. (604) 609-0244 - Encore Clean Energy Inc. - Exhibit 10.1

 ENCORE CLEAN ENERGY, INC.

  2003 STOCK INCENTIVE PLAN  

ARTICLE 1. THE PLAN

1.1	Title 

 This plan is entitled the “2003 Stock Incentive Plan”
  (the "Plan") of Encore Clean Energy, Inc., a Delaware corporation (the "Company”).

 1.2 Purpose 

 The purpose of the Plan is to enhance the long-term stockholder
  value of the Company by offering opportunities to directors, officers, employees
  and eligible consultants of the Company and any Related Company, as defined
  below, to acquire and maintain stock ownership in the Company in order to give
  these persons the opportunity to participate in the Company's growth and success,
  and to encourage them to remain in the service of the Company or a Related Company.

ARTICLE 2. DEFINITIONS

2.1 	Definitions 

 The following terms will have the following meanings in the
  Plan: 

 "Award" means any Option or Stock Award. 

 "Board" means the Board of Directors of the Company.

 "Cause," unless otherwise defined in the instrument
  evidencing the award or in an employment or services agreement between the Company
  or a Related Company and a Participant, means a material breach of the employment
  or services agreement, dishonesty, fraud, misconduct, unauthorized use or disclosure
  of confidential information or trade secrets, or conviction or confession of
  a crime punishable by law (except minor violations), in each case as determined
  by the Plan Administrator, and its determination shall be conclusive and binding.

 "Code" means the Internal Revenue Code of 1986, as
  amended from time to time. 

 "Common Stock" means the common stock, par value $0.001
  per share, of the Company. 

 "Consultant Participant" means a Participant who is
  defined as a Consultant Participant in Article 5. 

 "Corporate Transaction," unless otherwise defined in
  the instrument evidencing the Award or in a written employment or services agreement
  between the Company or a Related Company and a Participant, means consummation
  of either. 

	(a)

        	a merger or consolidation of the Company
        with or into any other corporation, entity or person or

         

	(b)	a sale, lease, exchange or other transfer
        in one transaction or a series of related transactions of all or substantially
        all the Company's outstanding securities or all or substantially all the
        Company's assets; provided, however, that a Corporate Transaction shall
        not include a Related Party Transaction.

1

 "Disability," unless otherwise defined by the
  Plan Administrator, means a mental or physical impairment of the Participant
  that is expected to result in death or that has lasted or is expected to last
  for a continuous period of 12 months or more and that causes the Participant
  to be unable, in the opinion of the Company, to perform his or her duties for
  the Company or a Related Company and to be engaged in any substantial gainful
  activity. 

 "Employment Termination Date" means, with respect to
  a Participant, the first day upon which the Participant no longer has an employment
  or service relationship with the Company or any Related Company. 

 "Exchange Act" means the Securities Exchange Act of
  1934, as amended. 

 "Fair Market Value" means the per share value of the
  Common Stock determined as follows (a) if the Common Stock is listed on an established
  stock exchange or exchanges or the NASDAQ National Market, the closing price
  per share on the last trading day immediately preceding such date on the principal
  exchange on which it is traded or as reported by NASDAQ; (b) if the Common Stock
  is not then listed on an exchange or the NASDAQ National Market, but is quoted
  on the NASDAQ Small Cap Market, the NASDAQ electronic bulletin board or the
  National Quotation Bureau pink sheets, the average of the closing bid and asked
  prices per share for the Common Stock as quoted by NASDAQ or the National Quotation
  Bureau, as the case may be, on the last trading day immediately preceding such
  date; or (c) if there is no such reported market for the Common Stock for the
  date in question, then an amount determined in good faith by the Plan Administrator.

 "Grant Date" means the date on which the Plan Administrator
  completes the corporate action relating to the grant of an Award or such later
  date specified by the Plan Administrator, and on which all conditions precedent
  to the grant have been satisfied, provided that conditions to the exercisability
  or vesting of Awards shall not defer the Grant Date. 

 "Incentive Stock Option" means an Option granted with
  the intention, as reflected in the instrument evidencing the Option, that it
  qualify as an "incentive stock option" as that term is defined in Section 422
  of the Code. 

 "Nonqualified Stock Option" means an Option other than
  an Incentive Stock Option. 

"Option" means the right to purchase Common Stock granted
  under Article 7. 

"Option Expiration Date" has the meaning set forth in
  Article 7.6. 

 "Option Term" has the meaning set forth in Article
  7.3. 

 "Participant" means the person to whom an Award is
  granted and who meets the eligibility requirements imposed by Article 5, including
  Consultant Participants, as defined in Article 5. 

 "Plan Administrator" has the meaning set forth in Article
  3.1. 

 "Related Company" means any entity that, directly or
  indirectly, is in control of or is controlled by the Company. 

 "Related Party Transaction" means (a) a merger or consolidation
  of the Company in which the holders of shares of Common Stock immediately prior
  to the merger hold at least a majority of the shares of Common Stock in the
  Successor Corporation immediately after the merger; (b) a sale, lease, exchange
  or other transaction in one transaction or a series of related transactions
  of all or substantially all the Company's assets to a wholly-owned subsidiary
  corporation; (c) a mere reincorporation of the Company; or (d) a transaction
  undertaken for the sole purpose of creating a 

 2

 holding company that will be owned in substantially the same
  proportion by the persons who held the Company's securities immediately before
  such transaction. 

 "Retirement," unless otherwise defined by the
  Plan Administrator from time to time for purposes of the Plan, means retirement
  on or after the individual's normal retirement date under the Company's 401(k)
  plan or other similar successor plan applicable to salaried employees. 

 "Securities Act" means the Securities Act of 1933,
  as amended. 

 "Stock Award" means an Award of shares of Common Stock
  or units denominated in Common Stock granted under Article 9, the rights of
  ownership of which may be subject to restrictions prescribed by the Plan Administrator.

 "Successor Corporation" has the meaning set forth in
  Article 12.3.1. 

 "Vesting Commencement Date" means the Grant Date or
  such other date selected by the Plan Administrator as the date from which the
  Option begins to vest for purposes of Article 7.4. 

ARTICLE 3. ADMINISTRATION

3.1	Plan Administrator 

 The Plan shall be administered by the Board or a committee
  appointed by, and consisting of two or more members of, the Board (the "Plan
  Administrator"). If and so long as the Common Stock is registered under Section
  12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting the
  members of any committee acting as Plan Administrator, with respect to any persons
  subject or likely to become subject to Section 16 of the Exchange Act, the provisions
  regarding (a) "outside directors" as contemplated by Section 162(m) of the Code
  and (b) "non-employee directors" as contemplated by Rule 16b-3 under the Exchange
  Act. Committee members shall serve for such term as the Board may determine,
  subject to removal by the Board at any time. At any time when no committee has
  been appointed to administer the Plan, then the Board will be the Plan Administrator.

 3.2 Administration and Interpretation by Plan Administrator
   

 Except for the terms and conditions explicitly set forth in
  the Plan, the Plan Administrator shall have exclusive authority, in its discretion,
  to determine all matters relating to Awards under the Plan, including the selection
  of individuals to be granted Awards, the type of Awards, the number of shares
  of Common Stock subject to an Award, all terms, conditions, restrictions and
  limitations, if any, of an Award and the terms of any instrument that evidences
  the Award. The Plan Administrator shall also have exclusive authority to interpret
  the Plan and the terms of any instrument evidencing the Award and may from time
  to time adopt and change rules and regulations of general application for the
  Plan's administration. The Plan Administrator's interpretation of the Plan and
  its rules and regulations, and all actions taken and determinations made by
  the Plan Administrator pursuant to the Plan, shall be conclusive and binding
  on all parties involved or affected. The Plan Administrator may delegate administrative
  duties to such of the Company's officers as it so determines. 

 3

ARTICLE 4. STOCK SUBJECT TO THE PLAN 

4.1	Authorized Number of Shares 

 Subject to adjustment from time to time as provided in Article
  12.1, the number of shares of Common Stock available for issuance under the
  Plan shall be TWO MILLION (2,000,000) shares. 

 Shares issued under the Plan shall be drawn from authorized
  and unissued shares or shares now held or subsequently acquired by the Company
  as treasury shares. 

 4.2 Reuse of Shares  

 Any shares of Common Stock that have been made subject to
  an Award that cease to be subject to the Award (other than by reason of exercise
  or settlement of the Award to the extent it is exercised for or settled in shares)
  shall again be available for issuance in connection with future grants of Awards
  under the Plan. In the event shares issued under the Plan are reacquired by
  the Company pursuant to any forfeiture provision or right of repurchase, such
  shares shall again be available for the purposes of the Plan; provided, however,
  that the maximum number of shares that may be issued upon the exercise of Incentive
  Stock Options shall equal the share number stated in Article 4.1, subject to
  adjustment from time to time as provided in Article 12.1; and provided, further,
  that for purposes of Article 4.3, any such shares shall be counted in accordance
  with the requirements of Section 162(m) of the Code. 

4.3	Limitations 

	(a)
  	Subject to adjustment from time to time as provided in Article 12.1, not more than an aggregate of TWO MILLION (2,000,000) shares of Common Stock shall be available for issuance pursuant to grants of Stock Awards under the
Plan.

       
	(b)
  	Subject to adjustment from time to time as provided in Article 12.1, not more than 200,000 shares of Common Stock may be made subject to Awards under the Plan to any individual in the aggregate in any one fiscal year of the
Company.

        

	
ARTICLE 5. ELIGIBILITY

      An Award may be granted to any officer, director or employee
        of the Company or a Related Company that the Plan Administrator from time
        to time selects. An Award may also be granted to any consultant, agent,
        advisor or independent contractor who provides services to the Company
        or any Related Company (a “Consultant Participant”), so long
        as such Consultant Participant (a) is a natural person or an alter ego
        entity of the natural person providing the services; (b) renders bona
        fide services that are not in connection with the offer and sale of the
        Company's securities in a capital-raising transaction; and (c) does not
        directly or indirectly promote or maintain a market for the Company's
        securities.

 4

ARTICLE 6. AWARDS 

6.1	Form and Grant of Awards 

 The Plan Administrator shall have the authority, in its sole
  discretion, to determine the type or types of Awards to be granted under the
  Plan. Awards may be granted singly or in combination. 

 6.2 Settlement of Awards  

 The Company may settle Awards through the delivery of shares
  of Common Stock, the granting of replacement Awards or any combination thereof
  as the Plan Administrator shall determine. Any Award settlement, including payment
  deferrals, may be subject to such conditions, restrictions and contingencies
  as the Plan Administrator shall determine. The Plan Administrator may permit
  or require the deferral of any Award payment, subject to such rules and procedures
  as it may establish, which may include provisions for the payment or crediting
  of interest, or dividend equivalents, including converting such credits into
  deferred stock equivalents. 

ARTICLE 7. AWARDS OF OPTIONS

7.1	Grant of Options 

The Plan Administrator shall have the authority, in its sole discretion, to grant Options as Incentive Stock Options or as Nonqualified Stock Options, which shall be appropriately designated.

7.2	Option Exercise Price 

The exercise price for shares purchased under an Option shall be as determined by the Plan Administrator, provided that:

(a) 	the exercise price for Options granted to Participants other than Consultant Participants but shall not be less than the minimum exercise price required by Article 8.3 with respect to Incentive Stock Options and shall not be less than 85% of
Fair Market Value of the Common Stock on the Grant Date with respect to Nonqualified Stock Options;

(b) 	the exercise price for Options granted to Consultant Participants shall not be less than the lesser of 85% of Fair Market Value of the Common Stock on the Grant Date.

7.3	Term of Options 

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option (the "Option Term") shall be as established for that Option by the Plan Administrator or, if not so
established, shall be ten years from the Grant Date.

7.4	Exercise of Options 

The Plan Administrator shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the
Plan Administrator at any time.

The Plan Administrator, in its sole discretion, may adjust the vesting schedule of an Option held by a Participant who works less than "full-time" as that term is defined by the Plan Administrator or who takes a Company-approved leave of absence.

5

 To the extent an Option has vested and become exercisable,
  the Option may be exercised in whole or from time to time in part by delivery
  to the Company of a written stock option exercise agreement or notice, in a
  form and in accordance with procedures established by the Plan Administrator,
  setting forth the number of shares with respect to which the Option is being
  exercised, the restrictions imposed on the shares purchased under such exercise
  agreement, if any, and such representations and agreements as may be required
  by the Plan Administrator, accompanied by payment in full as described in Article
  7.5. An Option may be exercised only for whole shares and may not be exercised
  for less than a reasonable number of shares at any one time, as determined by
  the Plan Administrator. 

 7.5 Payment of Exercise Price  

 The exercise price for shares purchased under an Option shall
  be paid in full to the Company by delivery of consideration equal to the product
  of the Option exercise price and the number of shares purchased. Such consideration
  must be paid before the Company will issue the shares being purchased and must
  be in a form or a combination of forms acceptable to the Plan Administrator
  for that purchase, which forms may include: 

	(a)

        	cash;
  
	(b)

        	check;
  
	(c)

        	tendering (either actually or, if the
        Common Stock is registered under Section 12(b) or 12(g) of the Exchange
        Act, by attestation) shares of Common Stock already owned by the Participant
        for at least six months (or any shorter period necessary to avoid a charge
        to the Company's earnings for financial reporting purposes) that on the
        day prior to the exercise date have a Fair Market Value equal to the aggregate
        exercise price of the shares being purchased under the Option; or

         

	(d)	if the Common Stock is registered under
        Section 12(b) or 12(g) of the Exchange Act, delivery of a properly executed
        exercise notice, together with irrevocable instructions to a brokerage
        firm designated by the Company to deliver promptly to the Company the
        aggregate amount of sale or loan proceeds to pay the Option exercise price
        and any withholding tax obligations that may arise in connection with
        the exercise, all in accordance with the regulations of the Federal Reserve
        Board.

7.6	Post-Termination Exercises 

 The Plan Administrator shall establish and set forth in each
  instrument that evidences an Option whether the Option shall continue to be
  exercisable, and the terms and conditions of such exercise, if the Participant
  ceases to be employed by, or to provide services to, the Company or a Related
  Company, which provisions may be waived or modified by the Plan Administrator
  at any time. If not so established in the instrument evidencing the Option,
  the Option shall be exercisable according to the following terms and conditions,
  which may be waived or modified by the Plan Administrator at any time: 

	(a)
   	Except as otherwise set
        forth in this Article 7.6, any portion of an Option that is not vested
        and exercisable on the Employment Termination Date shall expire on such
        date.

         

	(b)
   	Any portion of an Option
        that is vested and exercisable on the Employment Termination Date shall
        expire on the earliest to occur of

          

	 	(i) 	if the Participant's Employment Termination
        Date occurs for reasons other than Cause, Retirement, Disability or death,
        the day which is three months after such Employment Termination Date;

 6

 

	 	(ii)

        	if the Participant's Employment Termination Date occurs by
      reason of Retirement, Disability or death, the one-year anniversary of such
      Employment Termination Date; and

       
	 	(iii)	the last day of the Option Term (the "Option Expiration Date").

Notwithstanding the foregoing, if the
  Participant dies after his or her Employment Termination Date but while an Option
  is otherwise exercisable, the portion of the Option that is vested and exercisable
  on such Employment Termination Date shall expire upon the earlier to occur of
  (y) the Option Expiration Date and (z) the one-year anniversary of the date
  of death, unless the Plan Administrator determines otherwise. 

Also notwithstanding the foregoing,
  in case of termination of the Participant's employment or service relationship
  for Cause, all Options granted to that Participant shall automatically expire
  upon first notification to the Participant of such termination, unless the Plan
  Administrator determines otherwise. If a Participant's employment or service
  relationship with the Company is suspended pending an investigation of whether
  the Participant shall be terminated for Cause, all the Participant's rights
  under any Option shall likewise be suspended during the period of investigation.
  If any facts that would constitute termination for Cause are discovered after
  the Participant's relationship with the Company or a Related Company has ended,
  any Option then held by the Participant may be immediately terminated by the
  Plan Administrator, in its sole discretion. 

	(c)

        	A Participant's transfer of employment
        or service relationship between or among the Company and any Related Company,
        or a change in status from an employee to a consultant, agent, advisor
        or independent contractor or a change in status from a consultant, agent,
        advisor or independent contractor to an employee, shall not be considered
        a termination of employment or service relationship for purposes of this
        Article 7. Unless the Plan Administrator determines otherwise, a termination
        of employment or service relationship shall be deemed to occur if a Participant's
        employment or service relationship is with an entity that has ceased to
        be a Related Company.

         

	(d)

        	The effect of a Company-approved leave
        of absence on the application of this Article 7 shall be determined by
        the Plan Administrator, in its sole discretion.

         

	(e)	If a Participant's employment or service
        relationship with the Company or a Related Company terminates by reason
        of Disability or death, the Option shall become fully vested and exercisable
        for all the shares subject to the Option. Such Option shall remain exercisable
        for the time period set forth in this Article 7.6.

 ARTICLE 8. INCENTIVE STOCK OPTION LIMITATIONS

 Notwithstanding any other provisions of the Plan, and to the
  extent required by Section 422 of the Code, Incentive Stock Options shall be
  subject to the following additional terms and conditions: 

 8.1 Dollar Limitation  

 To the extent the aggregate Fair Market Value (determined
  as of the Grant Date) of Common Stock with respect to which Incentive Stock
  Options are exercisable for the first time during any calendar year (under the
  Plan and all other stock option plans of the Company) exceeds $100,000, such
  portion in excess of $100,000 shall be treated as a Nonqualified Stock Option.
  In the event the Participant holds two or more such Options that become exercisable
  for the first time in the same calendar year, such limitation shall be applied
  on the basis of the order in which such Options are granted. 

 7

8.2	Eligible Employees 

 Individuals who are not employees of the Company or one of
  its parent corporations or subsidiary corporations may not be granted Incentive
  Stock Options. 

 8.3 Exercise Price  

 The exercise price of an Incentive Stock Option shall be at
  least 100% of the Fair Market Value of the Common Stock on the Grant Date, and
  in the case of an Incentive Stock Option granted to a Participant who owns more
  than 10% of the total combined voting power of all classes of the stock of the
  Company or of its parent or subsidiary corporations (a "Ten Percent Stockholder"),
  shall not be less than 110% of the Fair Market Value of the Common Stock on
  the Grant Date. The determination of more than 10% ownership shall be made in
  accordance with Section 422 of the Code. 

 8.4 Exercisability  

 An Option designated as an Incentive Stock Option shall cease
  to qualify for favorable tax treatment as an Incentive Stock Option to the extent
  it is exercised (if permitted by the terms of the Option) (a) more than three
  months after the Employment Termination Date if termination was for reasons
  other than death or disability, (b) more than one year after the Employment
  Termination Date if termination was by reason of disability, or (c) after the
  Participant has been on leave of absence for more than 90 days, unless the Participant's
  reemployment rights are guaranteed by statute or contract. 

 8.5 Taxation of Incentive Stock Options  

 In order to obtain certain tax benefits afforded to Incentive
  Stock Options under Section 422 of the Code, the Participant must hold the shares
  acquired upon the exercise of an Incentive Stock Option for two years after
  the Grant Date and one year after the date of exercise. 

 A Participant may be subject to the alternative minimum tax
  at the time of exercise of an Incentive Stock Option. The Participant shall
  give the Company prompt notice of any disposition of shares acquired on the
  exercise of an Incentive Stock Option prior to the expiration of such holding
  periods. 

 8.6 Code Definitions  

 For the purposes of this Article 8, "parent corporation,"
  "subsidiary corporation" and "disability" shall have the meanings attributed
  to those terms for purposes of Section 422 of the Code. 

ARTICLE 9. STOCK AWARDS 

9.1 Grant of Stock Awards

 The Plan Administrator is authorized to make Awards of Common
  Stock or Awards denominated in units of Common Stock on such terms and conditions
  and subject to such repurchase or forfeiture restrictions, if any (which may
  be based on achievement of performance goals), as the Plan Administrator shall
  determine, in its sole discretion, which terms, conditions and restrictions
  shall be set forth in the instrument evidencing the Award. The terms, conditions
  and restrictions that the Plan Administrator shall have the power to determine
  shall include, without limitation:

	(a)	the value of the shares of common stock to be issued
        pursuant to the Stock Award by the Plan Administrator to a Participant,
        provided that value of the shares of Common Stock

 8

used in the determination of any Stock
  Award granted shall not be less than 85% of Fair Market Value of the Common
  Stock on the Grant Date; 

	(b)

        	the price to be paid by the Participant
        or the amount and nature of services to be provided by the Participant
        to the Company in consideration of the Stock Award, including the value
        of any services provided;

         

	(c)

        	the manner in which shares subject to
        Stock Awards are held during the periods they are subject to restrictions;
        and

         

	(d)	the circumstances under which repurchase
        or forfeiture of the Stock Award shall occur by reason of termination
        of the Participant's employment or service relationship.

9.2	Issuance of Shares 

 Stock Awards that may be granted by the Plan Administrator
  including the following types of Stock Awards, without limitation: 

	(a)

        	Restricted Stock Awards, whereby the
        Company sells shares of Common Stock to a Participant that is subject
        to restrictions;

         

	(b)

        	Compensation Stock Awards, whereby the
        Company issues shares of Common Stock to a Participant as compensation
        for services provided or to be provided by the Participant pursuant to
        an employment or consultant agreement;

         

	(c)	Bonus Stock Awards, whereby the Company
        issues shares of Common Stock in consideration for services rendered to
        the Company by a Participant.

 The value of the shares of Common Stock used in the determination
  of any Stock Award granted by the Plan Administrator to a Participant shall
  not be less than 85% of Fair Market Value of the Common Stock on the Grant Date.

9.3	Issuance of Shares 

 Upon the satisfaction of any terms, conditions and restrictions
  prescribed in respect to a Stock Award, or upon the Participant's release from
  any terms, conditions and restrictions of a Stock Award, as determined by the
  Plan Administrator, the Company shall release, as soon as practicable, to the
  Participant or, in the case of the Participant's death, to the personal representative
  of the Participant's estate or as the appropriate court directs, the appropriate
  number of shares of Common Stock. 

 9.4 Waiver of Restrictions  

 Notwithstanding any other provisions of the Plan, the Plan
  Administrator may, in its sole discretion, waive the repurchase or forfeiture
  period and any other terms, conditions or restrictions on any Stock Award under
  such circumstances and subject to such terms and conditions as the Plan Administrator
  shall deem appropriate; provided, however, that the Plan Administrator may not
  adjust performance goals for any Stock Award intended to be exempt under Section
  162(m) of the Code for the year in which the Stock Award is settled in such
  a manner as would increase the amount of compensation otherwise payable to a
  Participant. 

9

ARTICLE 10. WITHHOLDING 

10.1 General 

 The Company may require the Participant to pay to the Company
  the amount of any taxes that the Company is required by applicable federal,
  state, local or foreign law to withhold with respect to the grant, vesting or
  exercise of an Award. The Company shall not be required to issue any shares
  Common Stock under the Plan until such obligations are satisfied. 

 10.2 Payment of Withholding Obligations in Cash or Shares
   

 The Plan Administrator may permit or require a Participant
  to satisfy all or part of his or her tax withholding obligations by (a) paying
  cash to the Company, (b) having the Company withhold from any cash amounts otherwise
  due or to become due from the Company to the Participant, (c) having the Company
  withhold a portion of any shares of Common Stock that would otherwise be issued
  to the Participant having a value equal to the tax withholding obligations (up
  to the employer's minimum required tax withholding rate), or (d) surrendering
  any shares of Common Stock that the Participant previously acquired having a
  value equal to the tax withholding obligations (up to the employer's minimum
  required tax withholding rate to the extent the Participant has held the surrendered
  shares for less than six months). 

ARTICLE 11. ASSIGNABILITY

 Neither an Award nor any interest therein may be assigned,
  pledged or transferred by the Participant or made subject to attachment or similar
  proceedings other than by will or by the applicable laws of descent and distribution,
  and, during the Participant's lifetime, such Awards may be exercised only by
  the Participant. Notwithstanding the foregoing, and to the extent permitted
  by Section 422 of the Code, the Plan Administrator, in its sole discretion,
  may permit a Participant to assign or transfer an Award or may permit a Participant
  to designate a beneficiary who may exercise the Award or receive payment under
  the Award after the Participant's death; provided, however, that any Award so
  assigned or transferred shall be subject to all the terms and conditions of
  the Plan and those contained in the instrument evidencing the Award. 

ARTICLE 12. ADJUSTMENTS

12.1 Adjustment of Shares 

 In the event, at any time or from time to time, a stock dividend,
  stock split, spin-off, combination or exchange of shares, recapitalization,
  merger, consolidation, distribution to stockholders other than a normal cash
  dividend, or other change in the Company's corporate or capital structure, including,
  without limitation, a Related Party Transaction, results in (a) the outstanding
  shares of Common Stock, or any securities exchanged therefor or received in
  their place, being exchanged for a different number or kind of securities of
  the Company or of any other corporation or (b) new, different or additional
  securities of the Company or of any other corporation being received by the
  holders of shares of Common Stock of the Company, then the Plan Administrator
  shall make proportional adjustments in (i) the maximum number and kind of securities
  subject to the Plan and issuable as Incentive Stock Options as set forth in
  Article 4 and the maximum number and kind of securities that may be made subject
  to Stock Awards and to Awards to any individual as set forth in Article 4.3,
  and (ii) the number and kind of securities that are subject to any outstanding
  Award and the per share price of such securities, without any change in the
  aggregate price to be paid therefor. The determination by the Plan Administrator
  as to the terms of any of the foregoing adjustments shall be conclusive and
  binding. Notwithstanding the foregoing, a dissolution or liquidation of the
  Company or a Corporate Transaction shall not be governed by this Article 12.1
  but shall be governed by Articles 12.2 and 12.3, respectively. 

10

12.2 Dissolution or Liquidation 

 To the extent not previously exercised or settled, and unless
  otherwise determined by the Plan Administrator in its sole discretion, Options
  and Stock Awards denominated in units shall terminate immediately prior to the
  dissolution or liquidation of the Company. To the extent a forfeiture provision
  or repurchase right applicable to an Award has not been waived by the Plan Administrator,
  the Award shall be forfeited immediately prior to the consummation of the dissolution
  or liquidation. 

12.3 Corporate Transaction 

Options 

	(a)
   	In the event of a Corporate
        Transaction, except as otherwise provided in the instrument evidencing
        an Option (or in a written employment or services agreement between a
        Participant and the Company or Related Company) and except as provided
        in subsection (b) below, each outstanding Option shall be assumed or an
        equivalent option or right substituted by the surviving corporation, the
        successor corporation or its parent corporation, as applicable (the "Successor
        Corporation").

      

	 	 
	(b)
   	If, in connection with a
        Corporate Transaction, the Successor Corporation refuses to assume or
        substitute for an Option, then each such outstanding Option shall become
        fully vested and exercisable with respect to 100% of the unvested portion
        of the Option. In such case, the Plan Administrator shall notify the Participant
        in writing or electronically that the unvested portion of the Option specified
        above shall be fully vested and exercisable for a specified time period.
        At the expiration of the time period, the Option shall terminate, provided
        that the Corporate Transaction has occurred.

         

	(c)
   	For the purposes of this
        Article 12.3, the Option shall be considered assumed or substituted for
        if following the Corporate Transaction the option or right confers the
        right to purchase or receive, for each share of Common Stock subject to
        the Option immediately prior to the Corporate Transaction, the consideration
        (whether stock, cash, or other securities or property) received in the
        Corporate Transaction 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 Corporate Transaction is not solely common stock of the
        Successor Corporation, the Plan Administrator 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 Common Stock subject
        thereto, to be solely common stock of the Successor Corporation substantially
        equal in fair market value to the per share consideration received by
        holders of Common Stock in the Corporate Transaction. The determination
        of such substantial equality of value of consideration shall be made by
        the Plan Administrator and its determination shall be conclusive and binding.

         

	(d)	All Options shall terminate
        and cease to remain outstanding immediately following the Corporate Transaction,
        except to the extent assumed by the Successor Corporation.

12.4 Further Adjustment of Awards 

 Subject to Articles 12.2 and 12.3, the Plan Administrator
  shall have the discretion, exercisable at any time before a sale, merger, consolidation,
  reorganization, liquidation or change of control of the Company, as defined
  by the Plan Administrator, to take such further action as it determines to be
  necessary or advisable, and fair and equitable to the Participants, with respect
  to Awards. Such authorized action may include (but shall not be limited to)
  establishing, amending or waiving 

 11

 the type, terms, conditions or duration of, or restrictions
  on, Awards so as to provide for earlier, later, extended or additional time
  for exercise, lifting restrictions and other modifications, and the Plan Administrator
  may take such actions with respect to all Participants, to certain categories
  of Participants or only to individual Participants. The Plan Administrator may
  take such action before or after granting Awards to which the action relates
  and before or after any public announcement with respect to such sale, merger,
  consolidation, reorganization, liquidation or change of control that is the
  reason for such action. 

 12.5 Limitations  

 The grant of Awards shall in no way affect the Company's right
  to adjust, reclassify, reorganize or otherwise change its capital or business
  structure or to merge, consolidate, dissolve, liquidate or sell or transfer
  all or any part of its business or assets. 

 12.6 Fractional Shares  

 In the event of any adjustment in the number of shares covered
  by any Award, each such Award shall cover only the number of full shares resulting
  from such adjustment. 

 ARTICLE 13. AMENDMENT AND TERMINATION

13.1 Amendment or Termination of Plan 

 The Board may suspend, amend or terminate the Plan or any
  portion of the Plan at any time and in such respects as it shall deem advisable;
  provided, however, that to the extent required for compliance with Section 422
  of the Code or any applicable law or regulation, stockholder approval shall
  be required for any amendment that would (a) increase the total number of shares
  available for issuance under the Plan, (b) modify the class of employees eligible
  to receive Options, or (c) otherwise require stockholder approval under any
  applicable law or regulation. Any amendment made to the Plan that would constitute
  a "modification" to Incentive Stock Options outstanding on the date of such
  amendment shall not, without the consent of the Participant, be applicable to
  such outstanding Incentive Stock Options but shall have prospective effect only.

 13.2 Term of Plan  

 Unless sooner terminated as provided herein, the Plan shall
  terminate ten years after the earlier of the Plan's adoption by the Board and
  approval by the stockholders. 

 13.3 Consent of Participant  

 The suspension, amendment or termination of the Plan or a
  portion thereof or the amendment of an outstanding Award shall not, without
  the Participant's consent, materially adversely affect any rights under any
  Award theretofore granted to the Participant under the Plan. Any change or adjustment
  to an outstanding Incentive Stock Option shall not, without the consent of the
  Participant, be made in a manner so as to constitute a "modification" that would
  cause such Incentive Stock Option to fail to continue to qualify as an Incentive
  Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to
  Article 12 shall not be subject to these restrictions. 

12

ARTICLE 14. GENERAL 

14.1 Evidence of Awards 

 Awards granted under the Plan shall be evidenced by a written
  instrument that shall contain such terms, conditions, limitations and restrictions
  as the Plan Administrator shall deem advisable and that are not inconsistent
  with the Plan. 

 14.2 No Individual Rights  

 Nothing in the Plan or any Award granted under the Plan shall
  be deemed to constitute an employment contract or confer or be deemed to confer
  on any Participant any right to continue in the employ of, or to continue any
  other relationship with, the Company or any Related Company or limit in any
  way the right of the Company or any Related Company to terminate a Participant's
  employment or other relationship at any time, with or without Cause. 

 14.3 Issuance of Shares  

 Notwithstanding any other provision of the Plan, the Company
  shall have no obligation to issue or deliver any shares of Common Stock under
  the Plan or make any other distribution of benefits under the Plan unless, in
  the opinion of the Company's counsel, such issuance, delivery or distribution
  would comply with all applicable laws (including, without limitation, the requirements
  of the Securities Act), and the applicable requirements of any securities exchange
  or similar entity. 

 The Company shall be under no obligation to any Participant
  to register for offering or resale or to qualify for exemption under the Securities
  Act, or to register or qualify under state securities laws, any shares of Common
  Stock, security or interest in a security paid or issued under, or created by,
  the Plan, or to continue in effect any such registrations or qualifications
  if made. The Company may issue certificates for shares with such legends and
  subject to such restrictions on transfer and stop-transfer instructions as counsel
  for the Company deems necessary or desirable for compliance by the Company with
  federal and state securities laws. 

 To the extent the Plan or any instrument evidencing an Award
  provides for issuance of stock certificates to reflect the issuance of shares
  of Common Stock, the issuance may be effected on a noncertificated basis, to
  the extent not prohibited by applicable law or the applicable rules of any stock
  exchange. 

 14.4 No Rights as a Stockholder  

 No Option or Stock Award denominated in units shall entitle
  the Participant to any cash dividend, voting or other right of a stockholder
  unless and until the date of issuance under the Plan of the shares that are
  the subject of such Award. 

 14.5 Compliance With Laws and Regulations  

 Notwithstanding anything in the Plan to the contrary, the
  Plan Administrator, in its sole discretion, may bifurcate the Plan so as to
  restrict, limit or condition the use of any provision of the Plan to Participants
  who are officers or directors subject to Section 16 of the Exchange Act without
  so restricting, limiting or conditioning the Plan with respect to other Participants.
  Additionally, in interpreting and applying the provisions of the Plan, any Option
  granted as an Incentive Stock Option pursuant to the Plan shall, to the extent
  permitted by law, be construed as an "incentive stock option" within the meaning
  of Section 422 of the Code. 

13

14.6 Participants in Other Countries 

 The Plan Administrator shall have the authority to adopt such
  modifications, procedures and subplans as may be necessary or desirable to comply
  with provisions of the laws of other countries in which the Company or any Related
  Company may operate to assure the viability of the benefits from Awards granted
  to Participants employed in such countries and to meet the objectives of the
  Plan. 

 14.7 No Trust or Fund  

 The Plan is intended to constitute an "unfunded" plan. Nothing
  contained herein shall require the Company to segregate any monies or other
  property, or shares of Common Stock, or to create any trusts, or to make any
  special deposits for any immediate or deferred amounts payable to any Participant,
  and no Participant shall have any rights that are greater than those of a general
  unsecured creditor of the Company. 

 14.8 Severability  

 If any provision of the Plan or any Award is determined to
  be invalid, illegal or unenforceable in any jurisdiction, or as to any person,
  or would disqualify the Plan or any Award under any law deemed applicable by
  the Plan Administrator, such provision shall be construed or deemed amended
  to conform to applicable laws, or, if it cannot be so construed or deemed amended
  without, in the Plan Administrator's determination, materially altering the
  intent of the Plan or the Award, such provision shall be stricken as to such
  jurisdiction, person or Award, and the remainder of the Plan and any such Award
  shall remain in full force and effect. 

 14.9 Choice of Law  

 The Plan and all determinations made and actions taken pursuant
  hereto, to the extent not otherwise governed by the laws of the United States,
  shall be governed by the laws of the State of Nevada without giving effect to
  principles of conflicts of law. 

ARTICLE 15. EFFECTIVE DATE 

 The effective date is the date on which the Plan is adopted
  by the Board. If the stockholders of the Company do not approve the Plan within
  12 months after the Board's adoption of the Plan, any Incentive Stock Options
  granted under the Plan will be treated as Nonqualified Stock Options. 

14

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