Document:

Exhibit
10.2

Contract
No.260006119521

Maximum Pledge Contract for Small-Sized Enterprises

Important Notice: Following consultations conducted on
the basis of equality and in accordance with the relevant laws and regulations,
both parties voluntarily enter into this Contract, by which they shall strictly
abide. In order to secure legal rights of pledgor, Pledgee hereby call
attention to the pledgor to carefully read the bold-face words and pay full
attention to such contents.

 1
 

 

	
  Pledgee:

  	
  Industrial and Commercial Bank of China Limited
  Shanghai branch Fengxian sub-branch (hereinafter is referred to “Party A”)

  Principal: Yi Zhang

  Address: No. 48 Nanzhong Road

  Fax: 57180753

  
	
   

  	
   

  
	
  Pledgor:

  	
  Cherokee International (China) Power Supply Ltd. (hereinafter
  is referred to “Party B”)

  Legal representative or Principal:

  Address: Shanghai Fengpu Industrial Park, Shanghai, China

  Fax: 67108907

  

 

In order to realize the creditor’s rights of Party A,
Party B agrees to provide pledge as guaranty. Both parties enter into this
contract to regulate respective rights and liabilities after friendly
negotiation according to The Contract Law of the People’s Republic of China and
The Guarantee Law of the People’s Republic of China.

Article
1 Creditor’s Rights

Article 1.1 The
creditor’s rights shall include: all the loans in RMB & Foreign currency
Party A have launched to Party B according to the principal contract and the
creditor’s rights Party A enjoys against Party B due to the issuance of Bank
Acceptance Bill, Letter of Credit and Letter of Guarantee from December 25,
2006 to December 25, 2009, no matter such creditor’s rights is mature or
immature when such period expires. The maximum balance of creditor’s rights
shall be RMB 25, 000, 000. 

The above-mentioned principal contract includes
following contract (agreement) A signed by Party A and Cherokee
International (China) Power Supply Ltd. 

A. Loan Contract

B. Acceptance agreement for Bank Acceptance Bill

C. Agreement for opening Letter of Credit

D. Agreement for issuing Letter of Guarantee

Article 1.2 The above-mentioned maximum balance of
creditor’s rights refers to the total sum converted to RMB by all the creditor’s
rights whether in RMB or foreign currency. The rate of exchange is the selling
price of foreign currency publicized by Party A on the date when Party A’s
creditor’s rights against Party B are affirmed.

Article
2 Scope of Pledge

Article 2.1 The scope of the pledge includes: the full
amount of principle under the loan contract, its interests, penalty, compounding
interests, compensation and reimbursement for breaching of the contract,
attorney fees and other fees that Part A accrued for realizing the credit and
hypothecation, and all other expenses.

 2
 

Article
3 Pawn

Article 3.1 Details of the pawn are as per the List of
Pledge. The List of Pledge is the appendix of this contact and has the same
legal effect of this contract.

Article 3.2 The effectiveness of the pledge under this
contract shall be extended to the ancillary component, collateral rights, appendage,
adjunction, natural and legal fruits, substitute of the pawn and such
effectiveness shall also be extended to the insurance payment, compensation
incurred from the damage, loss or confiscation of the pawn.

Article 3.3 When the performance period of the
principal debt expires, should the pawn be seized by the People’s court due to
the non-performance of the principal debt, Party A shall be entitled to take
the detached natural and legal fruits of the pawn. And the payment shall be in
following sequence: 

A. Costs and
expenses to collect the fruits

B. Interest due and other costs and expenses under the
principal contract 

C. Principal of
the debt

Article 3.4 The estimated value of pawn under the List
of Pledge shall not be the foundation value when Party A disposes the pawn, and
shall not limit the rights of Party A on executing the hypothecation.

Article 3.5 The certificate of title of the pawn and
related documents shall be sealed after mutual confirmation by both parties and
shall be kept by Party A unless otherwise stipulated by the laws and
regulations.

Article 3.6 During the validation period of the
contract, the pawn shall be possessed and employed by Party B. Party B shall
maintain the pawn in good condition, and shall not employ the pawn in any inappropriate
way, which will tear off the value of pawn. Party A reserves the right to check
the condition of the pawn.

Article 3.7 Should there be any damage, loss to the
pawn, Party B shall inform Party A in time and take measures to prevent the
aggravation of the loss or damage. Party B is also obliged to provide the
certificate issued by the competent authorities to testify such damage or loss
at the same time.

Article 3.8 In case the action of Party B will
sufficiently result in the reduction of pawn value, Party B is obliged to
suspend its action immediately. If the pawn value is reduced as thus, Party B
shall recoup the value of pawn or provide guarantee with equivalent value.

Article 3.9 In case Party B is immune from the
reduction of pawn value, the compensation and reimbursement to Party B shall be
used to refund the debts under the principal contract in advance, or to recoup
the value of pawn with the consent of Party A, or shall be saved under the
designated account by Party A to guarantee the performing of the debt. The
remaining value of pawn shall still be the hypothecation of the debt.

 3
 

Article 3.10 Should the pawn be confiscated as a
result of the construction requirements of the State, the confiscation
compensation to Party B shall be used to refund the debts under the contract in
advance, or shall be deposited to the third party.

Article
4 Pledge registration

Article 4.1 Where the law or regulation requires, or
the two parties agrees, that the pledge shall be registered, both parties shall
register the pledge in the local registration office within 15 days since this
contract is signed. Shall there be any different contents between the contract
and registration, the registration shall have the priority.

Article 4.2 Should there be any changes of registered
items and the corresponding registration is required to be modified to record
such changes by the law, both parties shall register the changes in the local
registration office within 15 days since such changes occur.

Article
5 Insurance

Article 5.1 Party
B shall complete the procedure in corresponding insurance institute for buying
property insurance for the pawn within 15 days since the contract is signed,
the insurance category is property insurance. The insurance terms shall cover a
period longer than the period stipulated in Article 1.1 of this contract and
the insurance amount shall not be less than the maximum balance of creditor’s
rights as stipulated in Article 1.1 of this contract. 

Should the insurance terms not be longer than the expiration
date of the creditor’s rights of Party A due to the reasons of the insurance
institute, Party B is obliged to unconditionally buy property insurance for the
pawn under this contract and ensure an uninterrupted insurance terms during the
entire period of this contract.

Article 5.2 Party B shall specify in the insurance
policy that Party A is the first beneficiary. The policy shall have no
limitation to the rights or benefits of Party A.

Article 5.3 During the valid period of this contract,
Party B shall not suspend or withdraw the insurance with any excuse, should the
insurance be suspended, Party A is entitled to buy the insurance itself and all
the costs and expenses thus incurred shall be borne by Party B.

Article 5.4 During the valid period of this contract,
should the pawn suffer any insured accident, all the insurance compensation
shall be used to refund the debts under the principal contract in advance, or
to recoup the value of pawn with the consent of Party A, or shall be saved
under the designated account by Party A to guarantee the performing of the
debt.

 4
 

Article
6 Realization of the Pledge

Article 6.1 In case any of following situation occurs,
Party A is entitled to auction or sell the pawn according to the stipulations
of laws and enjoys the priority to be paid firstly with the amount thus
produced, or negotiate with Party B to use the pawn at a converted amount of
money to discharge the debts which Party B owes to Party A. 

	
  A.

  	
  Debts under the principal contract mature (or mature
  in advance) but undischarged by the debtor;

  
	
  B.

  	
  Situation under Article 3.8 occurs, Party B does not
  recoup the value of pawn or fails to provide guarantee with an equivalent
  amount to the reduction value of the pawn;

  
	
  C.

  	
  Principal contract is terminated according to the
  laws and regulations, the principal debtor should undertake the liabilities
  to compensate or discharge.

  

 

Article 6.2 Should the earnings from the disposition
of the pawn are in different currency from that stipulated in the principal
contract, such earnings shall be used to pay the debts under principal contract
only after it is converted to the currency of the principal contract at the
exchange rate publicized by Party A according to state foreign exchange policy.

Article 6.3 When Party A disposes the pawn according
to this contract, Party B shall coordinate actively and shall not set any
obstacles to prevent Party A from executing its rights.

Article
7 Representations and Warranties

Article 7.1 Party B hereby represents and warrants to
Party A that:

	
  A.

  	
  Party B is the property owner of the pawn under this
  contract and enjoys the full rights of disposition. There exist no disputes
  with regard to the ownership and management rights of the pawn;

  
	
  B.

  	
  Party B fully understands the purpose of the
  principal debt and voluntarily provide pledge for the principal debtor. All
  the expression of intents under this contract are sincere;

  
	
  C.

  	
  The pawn under this contract is entitled to be set
  pledge and no restricts exist;

  
	
  D.

  	
  Party B has made full and proper statement of the
  flaws of the pawn;

  
	
  E.

  	
  The pawn under this contract has not been sealed-up,
  seized or re-pledged;

  
	
  F.

  	
  Party B shall notify the lessee the status of pledge
  of the pawn in case the pawn is fully or partly rent out, and in such case
  Party B shall also inform Party A with written notice of the status of lease;

  
	
  G.

  	
  Should Party B be natural person, Party B shall
  ensure the pawn is not mutual property, or in case the pawn is mutual
  property, Party B has got the written consent from the part owner;

  
	
  H.

  	
  Should Party B be a legal person, Party B shall
  ensure i. the pledge of the pawn complies with the articles of association of
  the company and the procedure and rights describe therein; ii. The pledge of
  the pawn does not violate the laws and regulations and related requirements;
  iii. Should this warranty and representation is inveracious and deceitful,
  Party B shall still fulfill its commitments under the pledge and be
  responsible for any liabilities thus incur. Iv. In case Party B is a public
  listed company, Party B shall disclose the pledge timely according to the
  requirements of laws and regulations, failing which and thus leading to the
  influence on the realization of Party

  

 

 5
 

A’s pledge rights,
Party B shall undertake the liabilities and all the other obligations thus
incur.

Article
8 Undertakes

Article 8.1 Before the obligations of the principal
debtor under the principal contract is completely fulfilled, Party B hereby
undertakes to Party A:

	
  A.

  	
  In case any one of following situations occurs,
  Party B shall still undertake its liabilities under this contract without the
  needing of its consent:

  
	
   

  	
  (1)

  	
  Party A and the principal debtor negotiate to modify
  the principal contract, which does not aggravate the liabilities of principal
  debtor;

  
	
   

  	
  (2)

  	
  The amount of the principal debt changes due to the
  flexible interest rate the principle contract adopts or the adjustment of the
  interest rate by the People’s Bank of China.

  
	
  B.

  	
  Unless otherwise agreed by Party A, during the
  period of this contract, Party B shall ensure that pawn under this contract
  should not be pledged or impawned at any kind, and not be rented out,
  transferred to, or bestowed to any third party, and that the pawn shall not
  be damaged in any kind of.

  
	
  C.

  	
  Party B shall be responsible for any fees and
  charges under this contract, including but not limited to the attorney fee,
  insurance fee, charges for appraisement, evaluation, registration, transfer
  of title and any other expenses.

  
	
  D.

  	
  In case the pledge right of Party A suffers any
  infringement from any third parties, Party B shall notify Party A timely and
  coordinate with Party A to defense such infringement.

  
	
  E.

  	
  Party B shall notify Party A timely in case any of
  the following situations occurs:

  
	
   

  	
  (1)

  	
  Changes of management mechanism including but not
  limited to restructure of the company to a company by shares, contracting,
  leasehold, consolidation, separation, joint management, establishing joint
  venture or cooperative operation with foreign companies, admission to and
  withdrawal from a Partnership;

  
	
   

  	
  (2)

  	
  Changes of the business scope, registered capital
  and equity;

  
	
   

  	
  (3)

  	
  liquidation, closing down, going out of business,
  disincorporation, revocation of the business license, nullifying the
  administrative registration;

  
	
   

  	
  (4)

  	
  Any disputes with regard to the ownership of the
  pawn;

  
	
   

  	
  (5)

  	
  Changes with regard to the name of the company,
  articles of association or partnership agreement, business address, legal
  representative (principal), phone no;

  
	
   

  	
  (6)

  	
  Seal-up, seizure, custody of the pawn according to
  the law in case the pawn is or is likely to be involved in economic disputes,
  litigation or arbitration.

  
	
   

  	
  In case the items of (1) and/or (2) listed above
  occur, Party B shall inform party B with written notice within 10 days since
  such matter happens, in case any of the items from (3) to (6) occurs, Party B
  shall inform party B with written notice immediately.

  
	
  F.

  	
  Party B shall sign any notices in any forms from
  Party A timely.

  

 

Article 8.2 Party A shall hereby undertakes to Party
B:

 6
 

A.    Party A
shall keep all the documents, financial materials and other undisclosed
materials presented by Party B for performing this contract confidential unless
otherwise stipulated by the laws and regulations;

B     Party A
shall refund the balance value of the pawn to Party B when Party A disposes the
pawn to realize its pledge right;

C.    Party A
shall coordinate Party B to recourse the principal debtor when its pledge right
is fully realized.

Article
9 Default and Default Remedies

Article 9.1 Once the contract comes into effect,
either party’s failing to fulfill its commitments under this contract or
violation of its representations, warranties and undertakes under this contract
constitutes the breach of contract. Should the other party suffer any damages
or losses, the breaching party shall compensate.

Article 9.2 In
case either party has any of following actions, it shall be responsible for any
extra costs and losses thus incur: 

(1) Failing to
make notice according to this contract or the notice is not in compliance with
the truth;

(2) Rejecting to receive the other party’s notice
during working days.

Article 9.3 Should the contract is void due to any
reasons from Party B, Party B shall compensate all the damages or losses Party
A thus suffer within the scope of pledge.

Article 9.4 Should any party breach the contract, the
other party is entitled to take any measures stipulated by the laws and
regulations of the People’s Republic of China unless otherwise expressed in
this contract.

Article
10 Effectiveness, Modification and Termination

Article 10.1 The contract shall be effective from the
date of signing until the date on which all debts are tendered. Where there is
a statutory requirement for registration, the effectiveness date is when the
registration is completed.

Article 10.2 It must be confirmed in written words and
signature by the authorized representative of each party for any revision. The
revision agreement is the integral part of this contract and has the same legal
effect.

Article 10.3 Where any article or provision of this
contract shall be invalid, illegal or unenforceable such invalidity, illegality
or unenforceability shall not effect any other article or provision hereof.

 7
 

Article
10.4 The modification and termination of this contract does not affect the
rights of each party for compensation. The termination of this contract does
not affect the validity of the article concerning settlement of disputes.

Article 11 Settlement of Disputes

Article
11.1 The conclusion, effectiveness, interpretation, execution and dispute
resolution of the contract shall be governed by the laws of the People’s
Republic of China. All disputes in connection with this contract or the
execution thereof shall be settled friendly through negotiation. In case no
settlement can be reached, the case may then be submitted to the jurisdiction
of the people’s court at the site of Party A.

Article 12 Miscellaneous

Article
12.1 This contract is independent of the principal contract, should the
principal contract be void, this contract is still valid and Party B shall
fulfill its commitments under this contract.

Article
12.2 Party B shall not transfer the whole or part of its rights and liabilities
under this contract without the written consent of Party A.

Article
12.3 No delay or omission by Party A in exercising the whole or part of right
hereunder shall operate as a waiver or modification thereof or of any other
right, and no such delay or omission shall preclude any other or further exercise
thereof or the exercise of any other right.

Article
12.4 In case the pledgor under this contract is a natural person, the pledgor
shall not be restricted by the article 8.1E (1), (2), (3), (5) of this
contract.

Article
12.5 The contract is made in four (4) copies, one for each party and one for
Real Estate Trading Center and other authority respectively and each copy has
the same legal effect.

Appendix:
List of Pledge

 8
 

 

	
  Party A: 

  	
  Industrial and Commercial Bank of China Limited
  Shanghai branch Fengxian sub-branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized representative:

  	
  /s/ Yi Zhang

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Party B: Cherokee International (China) Power Supply
  Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized representative: 

  	
  /s/ Linster W. Fox

  	
   

  
				

 

Date: January 18, 2007

 9
 

List of Pledge

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Pledge

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Value

  	
   

  	
  under

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  by

  	
   

  	
  other

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Certificate

  	
   

  	
  appraise

  	
   

  	
  creditor’s

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Quantity

  	
   

  	
  Quality

  	
   

  	
  Status

  	
   

  	
  Location

  	
   

  	
  of title

  	
   

  	
  -ment

  	
   

  	
  right

  	
   

  	
  Others

  	
   

  
	
  Workshop

  	
   

  	
  10912.95

  	
   

  	
  good

  	
   

  	
  Completed

  	
   

  	
  No.1353

  	
   

  	
  Shanghai

  	
   

  	
  36,070,000

  	
   

  	
  NO

  	
   

  	
  NO

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chen Qiao

  	
   

  	
  real
  esate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Road,

  	
   

  	
  Fenfxian

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Fengxian

  	
   

  	
  (2006)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  district

  	
   

  	
  No.010046

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Unit price for
amount: RMB yuan

 

	
  Pledgee:

  	
  Industrial and Commercial Bank of China Limited
  Shanghai branch 

  
	
   

  	
  Fengxian sub-branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Principal:

  	
  /s/ Yi Zhang

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Pledgor: Cherokee International (China) Power Supply
  Ltd.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Legal representative: 

  	
  /s/ Linster W. Fox

  	
   

  
					

 

Date: January 18, 2007

 10Exhibit 4.1

ARTEIS
INC.

2001
STOCK PLAN

(amended as of
February 18, 2005)

1.                                       Purposes
of the Plan.  The purposes of this
Stock Plan are to attract and retain the best available personnel for positions
of substantial responsibility, to provide additional incentive to Employees,
Directors and Consultants and to promote the success of the Company’s
business.  Options granted under the Plan
may be Incentive Stock Options or Nonstatutory Stock Options, as determined by
the Administrator at the time of grant. 
Stock Purchase Rights may also be granted under the Plan.

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

(a)                                  “Administrator”
means the Board or any of its Committees as shall be administering the Plan in
accordance with Section 4 hereof.

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

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

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

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

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

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

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

(f)                                    “Committee”
means a committee of Directors appointed by the Board in accordance with
Section 4 hereof.

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

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

(i)                                     “Consultant”
means any person who is engaged by the Company or any Parent or Subsidiary to
render consulting or advisory services to such entity.

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

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

(l)                                     “Employee”
means any person, including officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. 
A Service Provider shall not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor.  For
purposes of Incentive Stock Options, no such leave may exceed ninety (90) days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.  If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed,
then three (3) months following the 90th day of such leave, any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock
Option.  Neither service as a Director nor
payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

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

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

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

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

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

 2
 

(o)                                 “Incentive Stock
Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.

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

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

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

(s)                                  “Optioned Stock”
means the Common Stock subject to an Option or a Stock Purchase Right.

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

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

(v)                                 “Plan” means
this 2001 Stock Plan.

(w)                               “Restricted Stock”
means shares of Common Stock acquired pursuant to a grant of a Stock Purchase
Right under Section 12 below.

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

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

(z)                                   “Stock Purchase
Right” means a right to purchase Common Stock pursuant to Section 12
below.

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

3.                                       Stock
Subject to the Plan.  Subject to the
provisions of Section 13 of the Plan, the maximum aggregate number of
Shares that may be subject to option and sold under the Plan is 879,545
Shares.  The Shares may be authorized but
unissued, or reacquired Common Stock.

If an Option or
Stock Purchase Right expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).  However, Shares that have
actually been issued under the Plan, upon exercise of either an Option or Stock
Purchase Right, shall not be returned to the Plan and shall not become
available for future distribution under the Plan, except that if Shares of
restricted stock issued pursuant to an Option or Stock Purchase Right are
repurchased by the Company at their original purchase price, such Shares shall
become available for future grant under the Plan.

 3
 

4.                                       Administration
of the Plan.

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

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

(i)                                  to determine the Fair
Market Value;

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

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

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

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

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

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

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

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

 4
 

5.                                       Eligibility.  Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. 
Incentive Stock Options may be granted only to Employees.

6.                                       Limitations.

(a)                              Incentive Stock Option
Limit.  Each Option shall be
designated in the Option Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option.  However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted.  The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.

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

7.                                       Term
of Plan.  Subject to shareholder
approval in accordance with Section 19, the Plan shall become effective
upon its adoption by the Board.  Unless
sooner terminated under Section 15, it shall continue in effect for a term
of ten (10) years from the later of (i) the effective date of the Plan, or
(ii) the date of the most recent Board approval of an increase in the
number of shares reserved for issuance under the Plan.

8.                                       Term
of Option.  The term of each Option
shall be stated in the Option Agreement; provided, however, that the term shall
be no more than ten (10) years from the date of grant thereof.  In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.

9.                                       Option
Exercise Price and Consideration.

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

(i)                                  In the case of an
Incentive Stock Option

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

 5
 

(B)                                granted to any other
Employee, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.

(ii)                               In the case of a
Nonstatutory Stock Option, the per Share exercise price shall be determined by
the Administrator.

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

(b)                                 Forms of
Consideration.  The consideration to
be paid for the Shares to be issued upon exercise of an Option, including the
method of payment, shall be determined by the Administrator (and, in the case
of an Incentive Stock Option, shall be determined at the time of grant).  Such consideration may consist of, without
limitations, (1) cash, (2) check, (3) promissory note,
(4) other Shares, provided Shares acquired from the Company, either
directly or indirectly, (x) have been owned by the Optionee for more than
six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the
Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods
of payment.  In making its determination
as to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the Company.  Notwithstanding the foregoing, the
Administrator may permit an Optionee to exercise his or her Option by delivery
of a full-recourse promissory note secured by the purchased Shares.  The terms of such promissory note shall be
determined by the Administrator in its sole discretion.

10.                                 Exercise
of Option.

(a)                              Procedure for
Exercise; Rights as a Shareholder. 
Any Option granted hereunder shall be exercisable according to the terms
hereof at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. 
Unless the Administrator provides otherwise, vesting of Options granted
hereunder shall be suspended during any unpaid leave of absence.  An Option may not be exercised for a fraction
of a Share.

An Option shall be
deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised. 
Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the
Plan.  Shares issued upon exercise of an
Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse.  Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. 
The Company shall issue (or cause to be issued) such Shares promptly
after the Option is exercised.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in
Section 13 of the Plan.

 6
 

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

(b)                                 Termination of
Relationship as a Service Provider. 
If an Optionee ceases to be a Service Provider, such Optionee may exercise
his or her Option within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of the Option as set
forth in the Option Agreement).  In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three (3) months following the Optionee’s termination.  If, on the date of termination, the Optionee
is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

(c)                                  Disability of
Optionee.  If an Optionee ceases to
be a Service Provider as a result of the Optionee’s total and permanent
disability, as defined in Section 22(e)(3) of the Code, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement).  In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee’s termination.  If, on the date of termination, the Optionee
is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

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

11.                                 Limited
Transferability of Options.  Unless
determined otherwise by the Administrator, Options and Stock Purchase Rights
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or the laws of descent and distribution, and
may be exercised during the lifetime of the Optionee, only by the
Optionee.  If the Administrator in its
sole discretion makes an Option or Stock Purchase Right transferable, such
award may only be transferred by (i) will, (ii) the laws of descent
and distribution, (iii) instrument to 

 7
 

an inter vivos or
testamentary trust in which the award is to be passed to beneficiaries upon the
death of the Optionee, or (iv) gift to a member of Optionee’s immediate
family (as such term is defined in Rule 16a-1(e) of the Exchange Act).  In addition, any transferable Option or Stock
Purchase Right shall contain additional terms and conditions as the
Administrator deems appropriate.

12.                                 Stock
Purchase Rights.

(a)                                  Rights to Purchase.  Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. 
After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing or electronically
of the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price to
be paid, and the time within which such person must accept such offer.  The offer shall be accepted by execution of a
Restricted Stock purchase agreement in the form determined by the
Administrator.

(b)                                 Repurchase Option.  Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser’s service with the Company for any reason (incuding death or
disability).  The purchase price for
Shares repurchased pursuant to the Restricted Stock purchase agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. 
The repurchase option shall lapse at such rate as the Administrator may
determine.

(c)                                  Other Provisions.  The Restricted Stock purchase agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

(d)                                 Rights as a
Shareholder.  Once the Stock Purchase
Right is exercised, the purchaser shall have rights equivalent to those of a
shareholder and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company.  No adjustment shall be made for a dividend or
other right for which the record date is prior to the date the Stock Purchase
Right is exercised, except as provided in Section 13 of the Plan.

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

(a)                                  Changes in
Capitalization.  Subject to any
required action by the shareholders of the Company, the number and type of
Shares which have been authorized for issuance under the Plan but as to which
no Options or Stock Purchase Rights have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option or Repurchase
Right, and the number and type of Shares covered by each outstanding Option or
Repurchase Right, as well as the price per Share covered by each such
outstanding Option or Repurchase Right, shall be proportionately adjusted for
any increase or decrease in the number or type of issued Shares resulting from
a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company.  The
conversion of any convertible 

 8
 

securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. 
Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number, type or price of Shares subject to an Option or Stock
Purchase Right.

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

(c)                                  Merger or Change
in Control.  In the event of a merger
of the Company with or into another corporation, or a Change in Control, each
outstanding Option and Stock Purchase Right shall be assumed or an equivalent
option or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. 
If the successor corporation in a merger or Change in Control refuses to
assume or substitute for the Option or Stock Purchase Right, then the Optionee
shall fully vest in and have the right to exercise his or her Option or Stock
Purchase Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be vested or exercisable. 
If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
Change in Control, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period.  For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or Change in Control, the Option or Stock Purchase Right
confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option immediately prior to the merger or Change in Control, the
consideration (whether stock, cash, or other securities or property) received
in the merger or Change in Control by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or Change in Control is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Stock subject to the Option or Stock Purchase Right, to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or Change in Control.

 9
 

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

15.                                 Amendment
and Termination of the Plan.

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

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

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

16.                                 Conditions
Upon Issuance of Shares.

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

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

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

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

19.                                 Shareholder
Approval.  The Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months after
the date the Plan is adopted.  Such
shareholder approval shall be obtained in the degree and manner required under
Applicable Laws.

 10

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