Document:

AMENDMENT TO LICENSE AND PURCHASE AGREEMENT

     AMENDMENT  TO LICENSE  AND  PURCHASE  AGREEMENT,  made as of the 8th day of
March, 2002 (the "Amendment") between HUMAN PHEROMONE SCIENCES,  INC., having an
office at 84 West Santa Clara  Street,  Suite 720,  San Jose,  California  95113
("Licensor"),  and NICHE  MARKETING,  INC.  having an office at 35 Engel Street,
Hicksville, New York 11802 ("Licensee").

                               W I T N E S S E T H

     WHEREAS,  by that certain License and Purchase  Agreement (the "Agreement")
dated April 24, 2000 between Licensor and Licensee, Licensor granted Licensee an
exclusive license to produce,  promote,  advertise and sell REALM and innerREALM
fragrances and toiletry products,  line extensions and new products carrying the
REALM and  innerREALM  name or variations  thereof in certain  territories  (the
"Territories") during the license period; and

     WHEREAS,  pursuant to the  Agreement,  the Licensee  agreed to pay Licensor
royalties (the  "Royalties") as well as produce the Products for the Licensor at
direct  cost plus a markup of twenty  (20%)  percent  for re-sale by Licensor in
certain other territories (the "Excluded Territories"); and

     WHEREAS,  the parties  wish to amend the  Agreement  as to their rights and
obligations under the Agreement;

     NOW THEREFORE,  in consideration of the mutual covenants herein  contained,
the  sufficiency  of which are hereby  acknowledged,  it is  mutually  agreed as
follows:

<PAGE>

     1.  Agreement:  Except as otherwise set forth  herein,  every other term of
Agreement shall remain in full force and effect.

     2. Purchase of Products by Licensor: Articles 1, 16 and 22 of the Agreement
affecting  the rights of the Licensor to purchase the Products,  and  Licensee's
obligation to produce such Products, are hereby amended as follows:

          (i)  Article 1, Grant of License shall read as follows:

     Licensor grants an exclusive license to Licensee under which Licensee shall
have the right to produce or have produced,  promote,  advertise and sell in all
classes of trade, including but not limited to, retail sales, mass market sales,
close out sales, catalog sales,  internet sales, and direct response sales REALM
and  innerREALM  fragrances  and  toiletry  products,  line  extensions  and new
products  carrying the name of REALM or a variation  thereof in the  Territories
("Licensed  Products") provided during the license period of the Agreement.  The
license to use the names REALM and innerREALM shall be granted free of all liens
and encumbrances  during the term of the Agreement and each extension thereto in
the Territories. Licensee shall also have the right of first refusal to sell the
Licensed Products in the Excluded Territories (except there shall be no right of
first  refusal  with respect the Excluded  Territories  into which  Licensor has
previously sold the Licensed Products, and to the Philippines),  in exchange for
which Licensee grants to Licensor an exclusive license for any Licensed Products
developed by Licensee for Licensor's sale in the Excluded Territories subject to
the secondary packaging restrictions set forth below.

     The term "Licensed Products" as used herein shall be defined as:

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<PAGE>

     (a)  fragrance  products  consisting  of  perfume,  eau de  parfum,  eau de
     toilette, cologne and after shave (the "Fragrance Products"); and

     (b) ancillary products consisting of all other products under the REALM and
     innerREALM  trademarks  including  body  lotions,   creams  and  gels  (the
     "Ancillary Products").

          (ii) Article 16,  Purchase  of  Products  by Licensor  After the Close
               shall read as follows:

     Fragrance  Product  requirements  of the Licensor  for its  personal  needs
(local  donations,  personal gifts,  etc.) from time to time are not included in
Schedule 1 annexed hereto.  Fragrance  Product  requirements of the Licensor for
re-sale  into the  Excluded  Territories  shall be as set  forth in  Schedule  1
annexed  hereto,  and shall be accompanied by a Purchase  Order,  if one has not
already been placed prior to the  execution of this  Amendment.  Licensee  shall
sell such Fragrance Products to Licensor at Licensee's direct cost plus a markup
of twenty (20%) percent.  Notwithstanding anything contained in the Agreement to
the contrary, after Licensee has fulfilled the production requirements set forth
in  Schedule 1,  Licensor  shall have no further  right to require and  Licensee
shall have no further obligation to produce the Fragrance Products for Licensor.
Thereafter,  any  Fragrance  Products  to be sold by  Licensor  in the  Excluded
Territories will either be manufactured by the Licensor, or its designee outside
the  United  States  and its  territories  and shall  bear  different  secondary
packaging   (outside   carton)  than  that  produced  by  Licensee   within  the
Territories,  and shall additionally  contain English and country of destination
national  language,  bearing a label indicating HPSI as the  manufacturer.  HPSI
shall retain the exclusive  rights to all such  different  secondary  packaging.
Secondary packaging for sales of the Fragrance Products to

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<PAGE>

Japan and Hong  Kong/China  may be of the same  design  and color as those  sold
within  the  Territories,  but  must  comply  with  the  language  and  labeling
requirements set forth above.

     Licensor  further  agrees to produce the Ancillary  Products for re-sale by
Licensor in the Excluded  Territories  provided,  however,  that  Licensor  will
provide at least three (3) months  advance notice of the types and quantities of
Ancillary Products required and, if the total quantities exceed 240 units at one
time, by submission of a Purchase Order. Notwithstanding the foregoing, Licensee
shall not be  required  to produce  more than  1,500  total  units of  Ancillary
Products  combined  per year and may refuse to produce  any or all such units at
any time  before  accepting  a Purchase  Order,  for any or no reason.  Purchase
Orders will be considered  as accepted by Licensee if not rejected  within seven
(7) business days after receipt.

               (iii) Article 22, Licensee Obligations. Shall read as follows:

                                      ****

               (C) LICENSEE  SHALL  EXERCISE ITS BEST EFFORTS TO PRODUCE OR HAVE
PRODUCED SUFFICIENT QUANTITIES OF THE FRAGRANCE PRODUCTS INDICATED ON SCHEDULE 1
ANNEXED HERETO TO MEET THE NEEDS INDICATED ON SUCH SCHEDULE.

                                      ****

     3. Component Products: Licensee shall provide reasonable component products
to the Licensor above and beyond the  quantities  included in Schedule 1 annexed
hereto until component  vendors are able to supply such components to HPSI under
Purchase  Orders  placed  by HPSI  prior  to the  execution  of this  Amendment.
Estimates  of such needs will be provided to Niche at the time of the  execution
of this Amendment. Niche shall not,

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<PAGE>

however,  be  required  to provide  component  products  that  would  materially
endanger Niche's ability to fulfill its currently  existing orders. In addition,
the Operations Executive of Niche and the Operations Executive of HPSI will work
together in good faith to coordinate  orders for all  components in an effort to
increase the quantities  being produced by any component  vendor at one time and
thereby  increase the chance that both  Licensor and Licensee will receive lower
prices for the component products based upon increased quantities.

     4. The Territories:  The Territories included in Article 2 of the Agreement
shall exclude the Philippines.  In exchange for Licensee's ceding this territory
to Licensor,  Licensor will pay Licensee the sum of $160,000  upon  execution of
this  Agreement.  Upon receipt and  clearance of such payment,  the  Philippines
shall become a territory of HPSI in perpetuity.

     5.  Counterparts:  This Amendment may be executed in counterparts,  each of
which shall  constitute an original,  but all such  counterparts  shall together
constitute but one and the same instrument. An electronic version,  facsimile or
photocopy of this Amendment or any signature hereon shall be deemed an original.

     IN WITNESS  WHEREOF,  the parties have duly executed this  Amendment on the
dates indicated below.

HUMAN PHEROMONE SCIENCES, INC.              NICHE MARKETING, INC.

By: /s/ William P Horgan                    By: Mark Crames
Its: Chairman, CEO                          Its: General Counsel
Dated:  March 7, 2002                       Dated:  March 8, 2002

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<PAGE>

     The  undersigned,  as Guarantor,  has read the terms and  conditions of the
within Amendment to the License and Purchase  Agreement  executed by and between
Niche  Marketing,  Inc.  as  Licensee  and Human  Pheromone  Sciences,  Inc.  as
Licensor,  agrees to be bound by its terms and to Guarantee the  performance  of
Licensee under this Amendment.

NORTHERN GROUP, INC.

By: Mark Crames

Its: General Counsel

Dated:  March 8, 2002

                                       6Exhibit 4.1

                      CALIFORNIA MICRO DEVICES CORPORATION

                         1995 EMPLOYEE STOCK OPTION PLAN
            AMENDED AS OF JULY 26, 1996, AMENDED AS OF JULY 18, 1997,
          AMENDED AS OF AUGUST 7, 1998, AMENDED AS OF AUGUST 1, 2000,
                        AND AMENDED AS OF AUGUST 7, 2001

1.  PURPOSE.

                  The purpose of the CALIFORNIA  MICRO DEVICES  CORPORATION 1995
Employee  Stock  Option  Plan (the  "Plan") is to advance the  interests  of the
Corporation  and its  shareholders by providing a means by which the Corporation
and its Subsidiaries shall be able to attract and retain qualified employees and
consultants.

2.  DEFINITIONS.

         (a) "Affiliate" shall mean any corporation (other than the Corporation)
in an unbroken chain of  corporations  that includes the  Corporation if each of
such  corporations,  other than the last corporation in the chain, owns at least
50% of the total voting power of one of the other corporations.

         (b) "Affiliated  Group" shall mean an affiliated group of corporations,
as defined in Code Section 1504, which includes the Corporation.

         (c) "Board" shall mean the Board of Directors of the Corporation.

         (d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

         (e)  "Committee"  shall mean the committee  appointed by the Board,  in
accordance with Section 3(a) hereof, to administer the Plan.

         (f)  "Common   Stock"  shall  mean  the  voting  common  stock  of  the
Corporation.

         (g) "Consultant" shall mean any person who, or any employee of any firm
which, is engaged by the Company or any Affiliate to render consulting services.

         (h) "Corporation"  shall mean CALIFORNIA MICRO DEVICES  CORPORATION,  a
California corporation.

         (i) "Effective Date" shall mean February 10, 1995.

         (j) "Employee"  shall mean any  individual who is employed,  within the
meaning  of  Section  3401 of the Code and the  regulations  thereunder,  by the
Corporation or by any Affiliate.  For purposes of the Plan and only for purposes
of the Plan, and in regard to  Nonstatutory  Stock Options but not for Incentive
Stock Options,  a Consultant of the Corporation or any Affiliate shall be deemed
to be an  Employee,  and service as a  Consultant  with the  Corporation  or any
Affiliate shall be deemed to be employment,  but no Incentive Stock Option shall
be granted to a  Consultant  who is not an  employee of the  Corporation  or any
Affiliate  within the  meaning of Section  3401 of the Code and the  regulations
thereunder.  In the  case  of a  Consultant,  the  provisions  governing  when a
termination  of  employment  has  occurred for purposes of the Plan shall be set
forth in the  written  stock  option  agreement  between  the  Optionee  and the
corporation, or, if not so set forth, the Committee shall have the discretion to
determine  when a termination of  "employment"  has occurred for purposes of the
Plan.

         (k) "Exchange Act" shall mean the  Securities  Exchange Act of 1934, as
amended.

         (l) "Exercise  Price" shall mean the price per Share at which an Option
may be  exercised,  as

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<PAGE>

determined  by the  Committee  and as specified in the  Optionee's  stock option
agreement.

         (m) "Fair  Market  Value"  shall  mean the value of one Share of Common
Stock,  determined as follows: (i) if the Shares are traded on an exchange or on
the NASDAQ National Market System,  the reported  "closing price" on the date of
valuation  or if no trading  occurred on such date,  the next  preceding  day on
which trading occurred;  (ii) if the Shares are traded  over-the-counter  on the
NASDAQ  System  (other  than on the NASDAQ  National  Market  System),  the mean
between  the bid and the ask prices on said  System at the close of  business on
the date of valuation or if no trading occurred on such date, the next preceding
day on which trading  occurred;  and (iii) if neither (i) nor (ii) applies,  the
fair  market  value  as  determined  by  the  Committee  in  good  faith.   Such
determination shall be conclusive and binding on all persons.

         (n) "Incentive Stock Option" shall mean an Option of the type described
in Section 422(b) of the Code.

         (o)  "Nonstatutory  Stock  Option" shall mean an Option of the type not
described in Section 422(b) or 423(b) of the Code.

         (p)  "Option"  shall mean an option to purchase  Common  Stock  granted
pursuant to the Plan.

         (q)  "Optionee"  shall mean any person who holds an Option  pursuant to
the Plan.

         (r) "Outside  Director"  shall mean a non-employee  member of the Board
who (1) is not a current  employee of any member of the  Affiliated  Group;  (2)
does not receive  compensation  for prior services  (other than benefits under a
tax-qualified  retirement plan) from any member of the Affiliated Group during a
taxable year in which he or she serves on the  Committee;  (3) has never been an
officer  of any  member  of the  Affiliated  Group;  and (4)  does  not  receive
remuneration  from any  member  of the  Affiliated  Group,  either  directly  or
indirectly, in any capacity other than as a director.

         (s) "Plan"  shall mean this stock option plan as it may be amended from
time to time.

         (t)  "Purchase  Price" shall mean at any  particular  time the Exercise
Price times the number of Shares for which an Option is being exercised.

         (u) "Share" shall mean one share of authorized Common Stock.

3.  ADMINISTRATION.

         (a)      The Committee.

         The Plan shall be  administered  by a  Committee  of Outside  Directors
which shall consist of not less than two members,  who during the one year prior
to  service  as an  administrator  of the Plan,  shall not have been  granted or
awarded  equity  securities  pursuant  to the  Plan  or any  other  plan  of the
Corporation or any of its Affiliates  except as permitted under Rule 16b-3 under
the  Exchange  Act.  The Board may from time to time  designate  individuals  as
ineligible to participate in the Plan for a specified  period in order to become
eligible to be a member of the Committee.

         (b)      Powers of the Committee.

                  Subject to the  provisions of the Plan,  the  Committee  shall
have the authority, in its discretion and on behalf of the Corporation:

                  (i)  to grant Options;

                  (ii) to determine  the Exercise  Price per Share of Options to
be granted;

                  (iii) to  determine  the  Employees  to whom,  and the time or
times at which,  Options  shall be granted and the number of Shares for which an
Option will be exercisable;

                  (iv)  to interpret the Plan;

                  (v) to prescribe,  amend,  and rescind  rules and  regulations
relating to the Plan;

                  (vi) to  determine  the terms and  provisions  of each  Option
granted  and,  with the  consent  of the  holder  thereof,  modify or amend each
Option;

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<PAGE>

                  (vii)  to  accelerate  or  defer,  with  the  consent  of  the
Optionee,  the exercise  date of any Option;

                  (viii) to  authorize  any  person to  execute on behalf of the
Corporation  any  instrument  required  to  effectuate  the  grant of an  Option
previously granted by the Committee;

                  (ix) with the consent of the Optionee, to reprice,  cancel and
regrant,  or otherwise adjust the Exercise Price of an Option previously granted
by the Committee; and

                  (x) to make  all  other  determinations  deemed  necessary  or
advisable for the administration of the Plan.

         (c)      Board's Determination of Fair Market Value.

                  The Board shall have the authority to  determine,  upon review
of relevant  information,  the Fair Market Value of the Common Stock, subject to
the provisions of the Plan and irrespective of whether the Board has appointed a
Committee to administer  the Plan.  The Board may delegate this authority to the
Committee.

         (d)      Committee's Interpretation of the Plan.

                  The  interpretation  and  construction by the Committee of any
provision  of the Plan or of any  Option  granted  hereunder  shall be final and
binding on all parties claiming an interest in an Option granted under the Plan.
No member of the Committee shall be liable for any action or determination  made
in good faith with respect to the Plan or any Option.

4.  PARTICIPATION.

         (a)      Eligibility.

                  The  Optionees  shall be such  persons  as the  Committee  may
select from among the Employees,  provided that  Consultants are not eligible to
receive  Incentive  Stock  Options.  Non-employee  members  of the Board are not
eligible for grants of Options.

         (b)      Ten Percent Shareholders.

                  Any  Employee who owns Stock  possessing  more than 10% of the
total  combined  voting  power  of  all  classes  of  outstanding  stock  of the
Corporation or any Affiliate shall not be eligible to receive an Option unless:

                  (i) the  Exercise  Price of the Shares  subject to such Option
when granted is at least 110% of the Fair Market Value of such Shares, and

                  (ii) such  Option by its  terms is not  exercisable  after the
expiration of five years from the date of grant.

         (c)      Stock Ownership.

                  For  purposes  of  Paragraph   4(b),  in   determining   stock
ownership,  an Employee shall be considered as owning the stock owned,  directly
or indirectly, by or for his or her brothers and sisters, spouse, ancestors, and
lineal  descendants.   Stock  owned,  directly  or  indirectly,   by  or  for  a
corporation,  partnership,  estate,  or trust shall be considered as being owned
proportionately  by  or  for  its  shareholders,   partners,  or  beneficiaries,
respectively.  Stock with  respect to which such  Employee  or any other  person
holds an option shall be disregarded.

         (d)      Outstanding Stock.

                  For purposes of Section  4(b),  the term  "outstanding  stock"
shall include all stock actually  issued and outstanding  immediately  after the
grant of the Option to the Optionee but shall not include any share for which an
Option is exercisable by any person.

5.  STOCK.

         (a)      Shares Subject to This Plan.

                  The  aggregate  number  of Shares  which  may be  issued  upon
exercise of Options  under the Plan shall not exceed  three  million six hundred
fifty-five  thousand  (3,655,000),  subject to adjustment  pursuant to Section 9
hereof.

         (b)      Options Not to Exceed Shares Available.

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<PAGE>

                  The number of Shares for which an Option is exercisable at any
time  shall not exceed the number of Shares  remaining  available  for  issuance
under the Plan. If any Option expires or is terminated, the number of Shares for
which such  Option was  exercisable  may be made  exercisable  pursuant to other
Options under the Plan. The  limitations  established by this Section 5(b) shall
be subject to  adjustment  in the manner  provided  in Section 9 hereof upon the
occurrence of an event specified therein.

         (c)      Limitation on Grants.

                  No person  shall be granted in any one fiscal year options for
more than 500,000 Shares.

6.  TERMS AND CONDITIONS OF OPTIONS.

         (a)      Stock Option Agreements.

                  Options shall be evidenced by written stock option  agreements
between the Optionee and the  Corporation  in such form as the  Committee  shall
from time to time determine.  No Option or purported Option shall be a valid and
binding obligation of the Corporation unless so evidenced in writing.

         (b)      Number of Shares.

                  Each stock option  agreement  shall state the number of Shares
for which the Option is exercisable and shall provide for the adjustment thereof
in accordance with Section 9 hereof.

         (c)      Vesting.

                  An Optionee  may not exercise his or her Option for any Shares
until the  Option,  in regard to such  Shares,  has  vested.  Each stock  option
agreement  shall  include a vesting  schedule  which  shall show when the Option
becomes exercisable.  The vesting schedule shall not impose upon the Corporation
or any  Affiliate  any  obligation to retain the Optionee in its employ or under
contract for any period or otherwise change the employment-at-will  status of an
Optionee who is an employee of the Corporation or any Affiliate.

         (d)      Lapse of Options.

                  Each stock option agreement shall state the time or times when
the Option covered thereby lapses and becomes  unexercisable in part or in full.
An Option shall lapse on the earliest of the following events (unless  otherwise
determined by the Committee and reflected in an option agreement):

                  (i) The tenth anniversary of the date of granting the Option;

                  (ii) The first anniversary of the Optionee's death;

                  (iii) The first anniversary of the date the Optionee ceases to
be an  Employee  due to total and  permanent  disability,  within the meaning of
Section 22(e)(3) of the Code;

                  (iv) On the date  provided  in Section  6(h)(i),  unless  with
respect to a Nonstatutory  Stock Option,  the Committee  otherwise  extends such
period before the applicable expiration date;

                  (v)  On the  date  provided  in  Section  9 for a  transaction
described in such Section;

                  (vi) The date the Optionee  files or has filed  against him or
her a petition in bankruptcy; or

                  (vii) The  expiration  date  specified in an Optionee's  stock
option agreement.

         (e)      Exercise Price.

                  Each stock option agreement shall state the Exercise Price for
the Shares for which the Option is  exercisable.  Subject to Section  4(b),  the
Exercise  Price of an  Incentive  Stock Option and a  Nonstatutory  Stock Option
shall,  when granted,  be not less than 100% and 85% of the Fair Market Value of
the Shares for which the Option is exercisable,  respectively, and not less than
the par value of the Shares.

         (f)      Medium and Time of Payment.

                  The  Purchase  Price shall be payable in full in cash upon the
exercise  of an Option  but the  Committee  may allow  the  Optionee  to pay the
Purchase Price:

                  (i) by surrendering Shares in good form for transfer, owned by
the Optionee and having a Fair Market Value on the date of exercise equal to the
Purchase  Price;

                  (ii) by delivery of a full recourse  promissory  note ("Note")
made by the  Optionee in the amount of the  Purchase  Price,  bearing  interest,
compounded  semiannually,  at a rate not less  than  the rate  determined  under

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<PAGE>

Section  7872 of the Code to insure that no "foregone  interest",  as defined in
such  section,  will  accrue,  together  with the  delivery  of a duly  executed
standard  form  security  agreement  securing the Note by a pledge of the Shares
purchased; or

                  (iii) in any combination of such  consideration  or such other
consideration  and method of payment  for the  issuance  of Shares to the extent
permitted under  applicable law Code as long as the sum of the cash so paid, the
Fair  Market  Value of the  Shares so  surrendered,  and the  amount of any Note
equals the Purchase Price.

                  The  Committee  or a  stock  option  agreement  may  prescribe
requirements  with respect to the exercise of Options,  including the submission
by the Optionee of such forms and  documents as the  Committee  may require and,
the  delivery  by  the  Optionee  of  cash  sufficient  to  satisfy   applicable
withholding  requirements.  The Committee may vary the exercise requirements and
procedures  from time to time to facilitate,  for example,  the  broker-assisted
exercise of Options.

         (g)      Nontransferability of Options.

                  During the  lifetime  of the  Optionee,  the  Option  shall be
exercisable  only  by  the  Optionee  or the  Optionee's  conservator  or  legal
representative and shall not be assignable or transferable  except pursuant to a
qualified  domestic  relations order as defined by the Code. In the event of the
Optionee's  death,  the Option shall not be  transferable  by the Optionee other
than by will or the laws of descent and distribution.

         (h)      Termination of Employment Other than by Death or Disability.

                  (i) If an  Optionee  ceases to be an  Employee  for any reason
other than his or her death or  disability,  the Optionee  shall have the right,
subject to the  provisions of this Section 6, to exercise any Option held by the
Optionee at any time within  ninety  (90) days after his or her  termination  of
employment,  but not beyond the otherwise applicable term of the Option and only
to the extent that on such date of  termination  of  employment  the  Optionee's
right to exercise such Option had vested.

                  (ii)  For  purposes  of  this  Section  6(h),  the  employment
relationship  shall be treated as  continuing  intact  while the  Optionee is an
active  employee of the  Corporation or any Affiliate,  or is on military leave,
sick  leave,  or other bona fide leave of absence to be  determined  in the sole
discretion of the Committee. The preceding sentence notwithstanding, in the case
of an Incentive  Stock  Option,  employment  shall be deemed to terminate on the
date  the  Optionee  ceases  active  employment  with  the  Corporation  or  any
Affiliate,  unless the Optionee's  reemployment rights are guaranteed by statute
or contract.

         (i)      Death of Optionee.

                  If an Optionee dies while an Employee,  or after ceasing to be
an Employee but during the period while he or she could have exercised an Option
under Section 6(h), any Option granted to the Optionee may be exercised,  to the
extent it had vested at the time of death and  subject to the Plan,  at any time
within 12 months after the Optionee's  death, by the executors or administrators
of his or her estate or by any person or persons  who acquire the Option by will
or the laws of descent and distribution, but not beyond the otherwise applicable
term of the Option.

         (j)      Disability of Optionee.

                  If an  Optionee  ceases  to be an  Employee  due  to  becoming
totally and permanently  disabled within the meaning of Section  22(e)(3) of the
Code,  any Option  granted to the Optionee may be exercised to the extent it had
vested at the time of cessation and,  subject to the Plan, at any time within 12
months  after the  Optionee's  termination  of  employment,  but not  beyond the
otherwise applicable term of the Option.

         (k)      Rights as a Shareholder.

                  An  Optionee,  or a transferee  of an Optionee,  shall have no
rights as a shareholder of the Corporation  with respect to any Shares for which
his or her  Option  is  exercisable  until the date of the  issuance  of a stock
certificate for such Shares. No adjustment shall be made for dividends, ordinary
or  extraordinary  or  whether  in  currency,  securities,  or  other  property,
distributions,  or other  rights for which the record  date is prior to the date
such stock certificate is issued, except as provided in Section 9 hereof.

         (l)      Modification, Extension, and Renewal of Options.

                  Within the  limitations of the Plan, the Committee may modify,
extend or renew  outstanding  Options or accept the  cancellation of outstanding
Options   for  the   granting   of  new   Options  in   substitution   therefor.

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<PAGE>

Notwithstanding  the preceding  sentence,  no  modification  of an Option shall,
without the consent of the Optionee,  alter or impair any rights or  obligations
under any Option previously granted.

         (m)      Other Provisions.

                  The  stock  option  agreements  authorized  under the Plan may
contain such other provisions  which are not inconsistent  with the terms of the
Plan,  including,  without  limitation,  restrictions  upon the  exercise of the
Option, as the Committee shall deem advisable.

7.  $100,000 PER YEAR LIMITATION ON VESTING OF ISOs.

         To the extent that the Fair Market Value of Shares (determined for each
Share as of the date of grant of the  Option  covering  such  Share)  subject to
Options  granted  under this Plan (or any other plan of the  Corporation  or any
Affiliate)  which are  designated  as Incentive  Stock  Options and which become
exercisable  by an  Optionee  for the first time during a single  calendar  year
exceeds $100,000,  the Option(s) (or portion thereof) covering such Shares shall
be  recharacterized   (to  the  extent  of  such  excess  over  $100,000)  as  a
Nonstatutory  Stock Option.  In determining  which Option(s) shall be treated as
Nonstatutory  Stock Options under the preceding  sentence,  the Options shall be
taken into account in the order  granted,  with the result that a later  granted
Option shall be  recharacterized  as a  Nonstatutory  Stock Option prior to such
recharacterization of a previously granted Option.

8.  TERM OF PLAN.

         Options may be granted  pursuant to the Plan until ten years  following
the Effective  Date,  and all Options which are  outstanding  on such date shall
remain in effect until they are  exercised  or expire by their  terms.  The Plan
shall expire for all purposes on the date 20 years following the Effective Date.

9.  RECAPITALIZATION, TAKEOVERS, AND LIQUIDATIONS.

         (a)      Reorganizations.

                  The  number of Shares  covered  by the Plan,  as  provided  in
Section 5 hereof,  and the number of Shares for which each Option is exercisable
shall be proportionately  adjusted for any increase or decrease in the number of
issued Shares  resulting  from the payment of a Common Stock  dividend,  a stock
split,  a reverse stock split or any other event which results in an increase or
decrease  in  the  number  of  issued  Shares   effected   without   receipt  of
consideration   by  the   Corporation,   and  the   Exercise   Price   shall  be
proportionately  increased  in the event the  number of Shares  subject  to such
Option are  decreased  and shall be  proportionately  decreased in the event the
number of Shares subject to such Option are increased.  For the purposes of this
paragraph, conversion of any convertible securities of the Corporation shall not
be deemed to have been "effected without receipt of consideration."  Adjustments
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
Corporation  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 or price of shares of Common  Stock
subject to an Option.

         (b)      Liquidation.

                  In  the  event  of  the  dissolution  or  liquidation  of  the
Corporation,  each Option shall terminate  immediately prior to the consummation
of such action.  The  Committee  shall notify the Optionee not less than fifteen
(15)  days  prior to the  proposed  consummation  of a  pending  dissolution  or
liquidation,  and the Option  shall be  exercisable  as to all Shares  which are
vested prior to expiration until  immediately  prior to the consummation of such
action.

         (c)      Merger.

                  In  the  event  of  a  merger  or  acquisition   involving  an
acquisition of the  Corporation or an acquisition by the  Corporation of another
company,  the result of which is that the outstanding  voting  securities of the
Corporation  do not  represent,  or are not  converted  into,  a majority of the
outstanding voting securities of the surviving corporation,  except as otherwise
provided in any particular Option agreement, the vesting of all unvested Options
shall be accelerated and all options shall be immediately  exercisable.  Without
limiting the generality of the foregoing,  in the event of (i) a proposed merger
of the Corporation  with or into another  corporation,  as a result of

                                       11
<PAGE>

which the  Corporation is not the surviving  corporation  and (ii) the Option is
not assumed or an equivalent option substituted by the successor  corporation or
a parent or  subsidiary  of the  successor  corporation,  then in such case each
Option  shall  terminate   immediately   prior  to  the   consummation  of  such
transaction.  The Committee shall notify the Optionee not less than fifteen (15)
days prior to the  proposed  consummation  of such  transaction,  and the Option
shall be  exercisable  as to all Shares  which are  subject to the Option  until
immediately prior to the consummation of such transaction.

         (d)      Determination by Committee.

                  All  adjustments  described in this Section 9 shall be made by
the  Committee,  whose  determination  shall be  conclusive  and  binding on all
persons.

         (e)      Limitation on Rights of Optionee.

                  Except as  expressly  provided in this  Section 9, no Optionee
shall have any  rights by reason of any  payment  of any stock  dividend,  stock
split or reverse stock split or any other  increase or decrease in the number of
shares of stock of any class, or by reason of any reorganization, consolidation,
dissolution,  liquidation,  merger,  exchange,  split-up or reverse split-up, or
spin-off  of  assets  or stock  of  another  corporation.  Any  issuance  by the
Corporation of Shares,  Options or securities convertible into Shares or Options
shall not affect, and no adjustment by reason thereof shall be made with respect
to,  the  number  or  Exercise  Price  of the  Shares  for  which an  Option  is
exercisable.  Notwithstanding the foregoing, if the Corporation shall enter into
a transaction  affecting the Corporation's capital stock or distributions to the
holders of its capital stock for which a revision in the terms of each Option is
not required pursuant to this Section 9, the Committee shall have the right, but
not the  obligation,  to  revise  the  terms  of each  Option  in a  manner  the
Committee,  in  its  sole  discretion,  deems  fair  and  reasonable  given  the
transaction  involved.  If  necessary or  appropriate  in  connection  with such
transaction,  the Committee may declare that any Option shall  terminate as of a
date fixed by the  Committee  and give each  Optionee  the right to exercise his
Option in whole or in part,  including exercise as to Shares to which the Option
would not otherwise be exercisable.

         (f)      No Restriction on Rights of Corporation.

         The grant of an  Option  shall not  affect or  restrict  in any way the
right  or  power  of the  Corporation  to make  adjustments,  reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or
consolidate, or to dissolve, liquidate, sell, or transfer all or any part of its
business or assets.

10.  SECURITIES LAW REQUIREMENTS.

         The  Corporation  shall not be under any obligation to issue any Shares
upon the exercise of any Option unless and until the  Corporation has determined
that:  (i) it and the Optionee  have taken all actions  required to register the
Shares under the  Securities  Act of 1933,  or to perfect an exemption  from the
registration  requirements  thereof;  (ii) any applicable listing requirement of
any stock exchange on which the Common Stock is listed has been  satisfied;  and
(iii)  all  other  applicable  provisions  of state  and  Federal  law have been
satisfied.

11.  EXERCISE OF UNVESTED OPTIONS.

         The  Committee  may grant any Optionee the right to exercise any Option
prior to the complete vesting of such Option. Without limiting the generality of
the foregoing, the Committee may provide that if an Option is exercised prior to
having  completely  vested,  the Shares issued upon such  exercise  shall remain
subject to vesting at the same rate as under the Option so  exercised  and shall
be subject to a right,  but not an obligation,  of repurchase by the Corporation
with respect to all unvested Shares if the Optionee ceases to be an Employee for
any reason.  For the purposes of facilitating  the enforcement of any such right
of repurchase,  at the request of the  Committee,  the Optionee shall enter into
the Joint Escrow Instructions with the Corporation and deliver every certificate
for his or her  unvested  Shares  with a stock  power  executed  in blank by the
Optionee and by the Optionee's spouse, if required for transfer.

12.  AMENDMENT OF THE PLAN.

         The Board or the Committee may, from time to time,  terminate,  suspend
or  discontinue  the  Plan,  in whole or in part,  or  revise or amend it in any
respect  whatsoever  including,   but  not  limited  to,  the  adoption  of  any
amendment(s)  deemed  necessary or advisable to qualify the Options  under rules
and  regulations  promulgated  by the

                                       12
<PAGE>

Securities and Exchange  Commission with respect to Employees who are subject to
the provisions of Section 16 of the Securities Exchange Act of 1934, as amended,
or to correct any defect or supply any omission or reconcile  any  inconsistency
in the  Plan  or in any  Option  granted  thereunder,  without  approval  of the
shareholders of the Corporation,  but without the approval of the  Corporation's
shareholders, no such revision or amendment shall:

         (i) Increase the number of Shares  subject to the Plan,  other than any
increase pursuant to Section 9;

         (ii)  Materially   modify  the   requirements  as  to  eligibility  for
participation in the Plan;

         (iii) Materially  increase the benefits accruing to Optionees under the
Plan;

         (iv) Extend the term of the Plan; or

         (v) Amend this Section to defeat its purpose.

         No amendment, termination, or modification of the Plan shall affect any
Option  theretofore  granted in any material  adverse way without the consent of
the Optionee.

13.  APPLICATION OF FUNDS.

         The proceeds  received by the Corporation from the sale of Common Stock
pursuant  to the  exercise  of an  Option  shall be used for  general  corporate
purposes.

14.  APPROVAL OF SHAREHOLDERS.

         The Plan shall be subject to  approval by the  affirmative  vote of the
holders of a majority  of all  classes of the  outstanding  shares  present  and
entitled  to  vote at the  first  meeting  of  shareholders  of the  Corporation
following the adoption of the Plan or by written consent,  and in no event later
than one (1) year following the Effective Date. Prior to such approval,  Options
may be granted but shall not be exercisable.  Any amendment described in Section
12 (i)  to  (iv)  shall  also  be  subject  to  approval  by  the  Corporation's
shareholders.

15  WITHHOLDING OF TAXES.

         In the event  the  Corporation  or a  Affiliate  determines  that it is
required to withhold  Federal,  state,  or local  taxes in  connection  with the
exercise  of an  Option or the  disposition  of Shares  issued  pursuant  to the
exercise of an Option,  the Optionee or any person  succeeding  to the rights of
the Optionee, as a condition to such exercise or disposition, may be required to
make arrangements  satisfactory to the Corporation or the Affiliate to enable it
to satisfy such withholding requirements.

16  RIGHTS AS AN EMPLOYEE.

         Neither  the Plan nor any  Option  granted  pursuant  thereto  shall be
construed  to  give  any  person  the  right  to  remain  in the  employ  of the
Corporation or any Affiliate,  or to affect the right of the  Corporation or any
Affiliate to terminate such individual's  employment at any time with or without
cause.  The grant of an Option shall not entitle the Optionee to, or  disqualify
the Optionee from, participation in the grant of any other Option under the Plan
or  participation in any other benefit plan maintained by the Corporation or any
Affiliate.

17.  DISAVOWAL OF REPRESENTATIONS, UNDERTAKINGS OR CREATION OF IMPLIED RIGHTS.

         In adopting and maintaining this Plan and granting  options  hereunder,
neither  the  Corporation  nor  any  Affiliate  makes  any   representations  or
undertakings  with respect to the initial  qualification or treatment of Options
under  federal  or  state  tax or  securities  laws.  The  Corporation  and each
Affiliate expressly disavows the creation of any rights in Employees, Optionees,
or  beneficiaries  of any  obligations  on the  part  of  the  Corporation,  any
Affiliate or the Committee, except as expressly provided herein.

18.  INSPECTION OF RECORDS.

         Copies of the Plan,  records reflecting each Optionee's Option, and any
other  documents  and  records  which an  Optionee is entitled by law to inspect
shall be open to  inspection  by the  Optionee  and his or her  duly  authorized

                                       13
<PAGE>

representative at the office of the Committee at any reasonable business hour.

19.  INFORMATION TO OPTIONEES.

         Each  Optionee  shall be provided with such  information  regarding the
Corporation as the Committee from time to time deems  necessary or  appropriate;
provided  however,  that each Optionee  shall at all times be provided with such
information  as is  required  to be  provided  from  time  to time  pursuant  to
applicable  regulatory   requirements,   including,  but  not  limited  to,  any
applicable   requirements  of  the  Securities  and  Exchange  Commission,   the
California Department of Corporations and other state securities agencies.

                                       14

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