Document:

Exhibit
10.7

    

    FT Global
Capital, Inc.

    1200
Abernathy Road

    Building
600

    Suite
1700

    Atlanta,
GA  30328

    

    
      	
              Mr.
      Hu Xiaoming

            	 
      	
              January
      19, 2010

            

    

    President,
Chief Executive Officer

     And
Chairman of the Board

    Kandi
Technologies, Inc.

    Jinhua
City Industrial Zone

    Jinhua,
Zhejiang Province

    People’s
Republic of China

    Post Code
321016

    

              Re:    Placement
Agent Agreement

    

    Dear Mr.
Hu:

    

    The
purpose of this letter agreement (this “Engagement Letter” or
the “Agreement”) is to set
forth the terms and conditions pursuant to which FT Global Capital, Inc. (“FT Global” or the
“Placement
Agent”), shall serve as the Lead Placement Agent and Brean Murray, Carret
& Co. as co-lead placement agent; in that capacity the Placement Agent shall
introduce Kandi Technologies, Inc. (the “Company”) to one or
more investors in connection with the proposed offering of securities
(“Securities”) of the Company on a “best efforts” basis (the “Placement”), subject
to the terms and conditions of this Agreement.  The terms of such
Offering and the Securities shall be mutually agreed upon by the Company and the
investor(s).

       

    The terms
of such Placement and the Securities shall be mutually agreed upon by the
Company and the purchasers (each, a “Purchaser” and
collectively, the “Purchasers”) and
nothing herein enables the Placement Agent to bind the Company or any Purchaser.
This Agreement and the documents executed and delivered by the Company and the
Purchasers in connection with the Placement shall be collectively referred to
herein as the “Transaction Documents.”  The
materials utilized to offer the Securities shall be referred to as the “Offering
Memorandum.”  The date of each of the closings of the Placement
shall be referred to herein as the “Closing
Date.”  The Company expressly acknowledges and agrees that the
Placement Agent’s obligations hereunder are on a reasonable “best efforts” basis
only and that the execution of this Agreement does not constitute a commitment
by the Placement Agent to purchase or to sell the Securities and does not ensure
the successful placement of the Securities or any portion
thereof.    The identities of the investors to which the
Placement Agent introduces the Company shall be proprietary information of the
Placement Agent and shall not be divulged to third parties by the Company, nor
used by the Company outside the scope of the Placement Agent’s engagement as
described herein, other than as required by applicable law.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SECTION
1.     COMPENSATION AND OTHER FEES.

    

    (A)      As
compensation for the Placement Agent’s services hereunder, the Company shall pay
to the Placement Agent (i) a cash placement fee upon each Closing, in an amount
equal to seven percent (7%) of the aggregate offering price of the total amount of
capital received by the Company from the sale of its securities to investors
introduced to the Company by the Placement Agent during the term of this
agreement (the “Placement Agent
Fee”), and (ii) 10% of the of the warrants sold in the Placement at each
Closing (the “Placement Agent
Warrants”).   At each Closing of the Offering, the Company
shall pay the Placement Agent its Placement Agent Fee, and shall issue to the
Placement Agent the Placement Agent Warrants, in each case relating to the sale
of the Securities that are subject of the Closing.

    

    (B)      The
Placement Agent Warrants will have the identical terms, conditions and rights as
the warrants sold in the Placement, and will be issued to the Placement Agent at
the time of each Closing, subject to adjustment if necessary to satisfy the
NASDAQ limitation on offerings of shares of 20% or more of the shares
outstanding.

    

    (C)      The
Placement Agent shall be entitled to a Placement Agent’s Fee, calculated in the
manner provided in Section 1(A), with respect to any public or private offering
or other financing or capital-raising transaction of any kind (“Tail Financing”) to
the extent that such financing or capital is provided to the Company by
investors whom the Placement Agent had introduced, directly or indirectly, to
the Company during the Term, as defined below, if such Tail Financing is
consummated at any time within the 12-month period following the expiration or
termination of this Agreement (the “Tail
Period”).

    

    (D)     The
Placement Agent Fee or other fee shall also be paid to the Placement Agent with
respect to capital received by the Company from the exercise of any issued and
outstanding warrants even if such exercise occurs after the end of the Tail
Period.

    

    SECTION
2.   COMPANY REPRESENTATIONS AND
WARRANTIES.

    

    The
Company represents and warrants to, and agrees with, the Placement Agent
that:

     

    (A)    The
Offering Memorandum (and any documents that accompany it) as amended or
supplemented will comply in all material respects with the Securities Act and
the applicable Rules and Regulations.  The Offering Memorandum (and
any documents to accompany it) as amended or supplemented will not contain as of
the date thereof any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Any incorporated
documents (the “Incorporated
Documents”), when filed with the Securities and Exchange Commission (the
“Commission”),
conformed when filed in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, and none of such
documents, when they were or are filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein (with respect to Incorporated Documents incorporated
by reference in the Offering Memorandum as amended or supplemented, in light of
the circumstances under which they were made not misleading); and any further
documents subsequently incorporated by reference in the Offering Memorandum, as
amended or supplemented, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations, as applicable, and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (B)     The
Company will not, without the prior consent of the Placement Agent, prepare, use
or refer to, any Offering Memorandum or other offering materials.

     

    (C)     The
Company will furnish promptly to the Placement Agent all information and
material concerning the Company and the Offering that the Placement Agent
requests in connection with the performance of its obligations
hereunder.  The Company represents and warrants that all information
made available to the Placement Agent by the Company will, at all times during
the period of the engagement of the Placement Agent hereunder, be complete and
correct in all material respects and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances under which such
statements are made.  The Company further represents and warrants that
any financial or other projections or forecasts provided to the Placement Agent
will have been prepared in good faith and will be based upon assumptions which,
in light of the circumstances under which they are made, are
reasonable.  The Company acknowledges and agrees that in rendering its
services hereunder the Placement Agent will be using and relying upon, without
any independent investigation or verification thereof, all information that is
or will be furnished to the Placement Agent by or on behalf of the Company and
on publicly available information, and the Placement Agent will not in any
respect be responsible for the accuracy or completeness of any of the foregoing
information, and that the Placement Agent will not undertake to make an
independent appraisal of any of the assets or of the business of the
Company.  The Company understands that in rendering services hereunder
the Placement Agent does not provide accounting, legal or tax advice and will
rely upon the advice of the Placement Agent’s counsel and advisers, as well as
counsel to the Company and other advisors to the Company as to accounting,
legal, tax and other matters relating to any matters contemplated by this
Agreement.

     

    SECTION
3.    REPRESENTATIONS AND
WARRANTIES. The Placement Agent shall be entitled to rely upon any and
all representations and warranties of the Company included in the purchase
agreements entered into by the Company and the Purchasers in connection with the
Placement, subject to the qualifications and limitations therein, including, but
not limited to, any disclosure set forth on an applicable schedule. The
Placement Agent represents and warrants to the Company that: (i) it will comply
with all applicable federal laws regarding trading in securities of the Company,
(ii) it will not disclose any non-public material information of the Company
without the prior written consent of the Company during the Term for a period of
1 year from the termination date of this Agreement, and (iii) that it is a
registered broker-dealer in good standing with the relevant regulatory
agencies.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SECTION
4.    ENGAGEMENT TERM &
SURVIVAL.    The Placement Agent’s engagement under
this Agreement shall be exclusive for a period of 12 months commencing on the
date hereof (the “Term”), and
thereafter shall be non-exclusive. Notwithstanding the foregoing, this Agreement
may be terminated by either the Company or the Placement Agent at any time after
the initial six-month period, upon 30 days’ written notice; provided
however that in the
event of the termination or expiration of this Agreement, the Placement Agent’s
compensation due under this Agreement will be payable in full and the
compensation payable under Section 1 will continue for the twelve (12) month
period commencing with such termination or expiration (the “Tail Period”).
The provisions of Sections 1, 2, 3, 4 ,5, 8 and 10 of this Agreement and
Appendix A shall survive this Agreement’s expiration or
termination.

    

    SECTION 5. 
  PLACEMENT
AGENT INFORMATION.  The Company agrees that any information or
advice rendered by the Placement Agent in connection with this engagement is for
the confidential use of the Company only in its evaluation of the Placement and,
except as otherwise required by law, the Company will not disclose or otherwise
refer to the advice or information in any manner without prior written consent
of the Placement Agent.

    

    SECTION
6.    NO FIDUCIARY
RELATIONSHIP.  This Agreement does not create, and shall not be
construed as creating rights enforceable by any person or entity that is not a
party hereto, except those entitled hereto by virtue of the indemnification
provisions hereof.  The Company acknowledges and agrees that the
Placement Agent is not and shall not be construed as a fiduciary of the Company
and that the Placement Agent shall not have any duties or liabilities to the
equity holders or the creditors of the Company or to any other person by virtue
of this Agreement or the retention of the Placement Agent hereunder, all of
which are hereby expressly waived.

     

    SECTION
7.   
INDEMNIFICATION.    
The parties agree to the terms of the Placement Agent’s standard indemnification
agreement, which is attached hereto as Appendix A and incorporated herein by
reference. The provisions of this Section 8 shall survive any termination of
this Agreement.

    

    SECTION
8.   ANNOUNCEMENTS.  The
Company grants to the Placement Agent the right to place customary
announcement(s) of the Placement in certain newspapers and to mail
announcement(s) to persons and firms selected by Placement Agent subject to the
Company’s prior approval, which shall not be unreasonably withheld.

    

    SECTION
9.    GOVERNING
LAW.  This Agreement will be governed by, and construed in
accordance with, the laws of the State of Georgia applicable to agreements made
and to be performed entirely in such State.  This Agreement may not be
assigned by either party without the prior written consent of the other
party.  This Agreement shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and permitted
assigns.  Any right to trial by jury with respect to any dispute
arising under this Agreement or any transaction or conduct in connection
herewith is waived.  Any dispute arising under this Agreement may be
brought into the courts of the State of Georgia located in Fulton County or into
the Federal Court located in Atlanta, Georgia  and, by execution and
delivery of this Agreement, the Company hereby accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of aforesaid
courts.  Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by delivering a copy thereof via overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. If either party shall commence an action or proceeding to enforce any
provisions of a Transaction Document, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    SECTION
10.   ENTIRE
AGREEMENT/MISC.  This Agreement embodies the entire agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings, relating to the subject matter
hereof.  If any provision of this Agreement is determined to be
invalid or unenforceable in any respect, such determination will not affect such
provision in any other respect or any other provision of this Agreement, which
will remain in full force and effect.  This Agreement may not be
amended or otherwise modified or waived except by an instrument in writing
signed by each of the Placement Agent and the Company.  The
representations, warranties, agreements and covenants contained herein shall
survive the closing of the Placement and delivery and/or exercise of the
Securities, as applicable.  This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any
signature is delivered by facsimile transmission or a .pdf format file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or .pdf signature page were an original thereof.

    

    SECTION
11.   NOTICES.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified on
the signature pages attached hereto prior to 6:30 p.m. (Atlanta, Georgia time)
on a business day, (b) the next business day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
on the signature pages attached hereto on a day that is not a business day or
later than 6:30 p.m. (Atlanta, Georgia time) on any business day, (c) the
business day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given.  The address for such
notices and communications shall be as set forth on the signature pages
hereto.

    

    Please
confirm that the foregoing correctly sets forth our agreement by signing and
returning an executed copy of this Agreement to FT Global.

    

    [Balance
of the page intentionally left blank]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              	
                      Very
      truly yours,

                    
	 
      
	
                      FT
      GLOBAL CAPITAL, INC.

                    
	 
      
	
                      By: 
      

                    	  
      
	 
      	
                      Name: Patrick
      J. Ko

                    
	 
      	
                      Title:  
      President

                    
	 
      	 
      
	
                      Address for notice:

                    
	
                      FT
      Global Capital, Inc.

                    
	
                      1200
      Abernathy Road

                    
	
                      Building
      600, Suite 1700

                    
	
                      Atlanta,
      GA  30328

                    
	 
      
	
                      Brean
      Murray, Carret & Co

                    
	 
      
	
                      By:

                    	  
      
	 
      	
                      Name:
      John Fletcher

                    
	 
      	
                      Title:  
      Managing Director

                    
	 
      	 
      
	
                      Address
      for notice:

                    
	
                      Brean
      Murray, Carret & Co

                    
	
                      570
      Lexington Avenue

                    
	
                      New
      York, NY
10022-6895

                    

            

          

        

      

    

    

    Accepted
and Agreed to as of

    the date
first written above:

    

    KANDI TECHNOLOGIES,
INC.

    

    
      
        
          
            
              
                	
                        By: 

                      	
	 
      	
                        Name:   

                      	
                        Hu
      Xiaomong

                      
	 
      	
                        Title:

                      	
                        President,
      Chief Executive Officer

                      
	 
      	 
      	
                        and
      Chairman of the Board

                      
	 
      	 
      	 
      
	
                        Address for
      notice:

                      
	
                        Mr.
      Hu Xiaoming

                      
	
                        President,
      Chief Executive Officer

                      
	
                         And
      Chairman of the Board

                      
	
                        Kandi
      Technologies, Inc.

                      
	
                        Jinhua
      City Industrial Zone

                      
	
                        Jinhua,
      Zhejiang Province

                      
	
                        People’s
      Republic of China,
321016

                      

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
A — INDEMNIFICATION PROVISIONS

    

    (A)  The
Company agrees to indemnify and hold harmless the Placement Agent and its
affiliates and their respective officers, directors, employees, agents, counsel,
advisers and consultants, and any persons controlling the Placement Agent or any
of its affiliates within the meaning of Section 15 of the Securities Act of 1933
or Section 20 of the Securities Exchange Act of 1934 (the Placement Agent and
each such other person or entity being referred to herein as an “Indemnified Person”),
from and against all claims, liabilities, losses or damages (or actions in
respect thereof) or other expenses which (A) are related to or arise out of (i)
actions taken or omitted to be taken (including any untrue statements made or
any statements omitted to be made) by the Company or its respective affiliates
or (ii) actions taken or omitted to be taken by an Indemnified Person with the
consent or in conformity with the actions or omissions of the Company or their
respective affiliates or (iii) any investigation, litigation, or inquiry by a
regulatory or self-regulatory agency or authority involving the Company or any
transaction arising under any agreements between the Company and the Placement
Agent or (B) are otherwise related to or arise out of the Placement Agents’
activities on behalf of the Company or its respective affiliates pursuant to
this Agreement or (C) in any way involving or alleged to involve the Company,
the Offering or the Securities.  The Company will not be responsible,
however, for any losses, claims, damages, liabilities or expenses pursuant to
clause (B) of the preceding sentence which are finally judicially determined to
have resulted solely from such Indemnified Person’s gross negligence or willful
misconduct.  In addition, the Company agrees to advance (and in the
absence of advancement required hereunder) to promptly reimburse each
Indemnified Person for all reasonable out-of-pocket expenses (including fees and
expenses of counsel) as they are incurred by such Indemnified Person in
connection with investigating, preparing, conducting or defending any such
action or claim, whether or not in connection with litigation in which any
Indemnified Person is a named party, or in connection with enforcing the rights
of such Indemnified Person under this Agreement.

    

    (B)      Promptly
after receipt by the Placement Agent of notice of any claim or the commencement
of any action or proceeding with respect to which the Placement Agent is
entitled to indemnity hereunder, the Placement Agent will notify the Company in
writing of such claim or of the commencement of such action or proceeding, and
the Company will assume the defense of such action or proceeding and will employ
counsel reasonably satisfactory to the Placement Agent and will pay the fees and
expenses of such counsel.  Notwithstanding the preceding sentence, the
Placement Agent will be entitled to employ counsel separate from counsel for the
Company and from any other party in such action if counsel for the Placement
Agent determines that to do so would be in the best interests of the Placement
Agent.  In such event, the reasonable fees and disbursements of no
more than one such separate counsel will be paid by the Company.  The
Company will have the exclusive right to settle the claim or proceeding at its
sole expense provided that the Company obtains a full release of any claims
against the Placement Agent and the Indemnified Persons.

    

    (C)      The
Company and the Placement Agent and any Indemnified Persons agree to notify each
other promptly of the assertion of any claim or the commencement of any action
or proceeding relating to a transaction contemplated by this engagement
letter.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (D)      If
for any reason the foregoing indemnity is unavailable to the Placement Agent or
insufficient to hold the Placement Agent harmless, then the Company shall
contribute to the amount paid or payable by the Placement Agent as a result of
such losses, claims, damages or liabilities in such proportion as is appropriate
to reflect not only the relative benefits received by the Company on the one
hand and the  Placement Agent on the other, but also the relative
fault of the Company on the one hand and the Placement Agent on the other that
resulted in such losses, claims, damages or liabilities, as well as any relevant
equitable considerations.  The amounts paid or payable by a party in
respect of losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees and expenses incurred in defending any
litigation, proceeding or other action or claim.  Notwithstanding the
provisions hereof, the Placement Agent’s share of the liability hereunder shall
not be in excess of the amount of fees actually received, or to be received, by
such Placement Agent under this engagement letter (excluding any amounts
received as reimbursement of expenses incurred by such Placement
Agent).

    

    (E)       These
indemnification provisions shall remain in full force and effect whether or not
the transaction contemplated by this Agreement is completed and shall survive
the termination of this Agreement, and shall be in addition to any liability
that the Company might otherwise have to any indemnified party under this
engagement letter or otherwise.NOTICE
OF GRANT OF [INCENTIVE/NON-QUALIFIED] STOCK OPTION AWARD

       

      CHINA
ARCHITECTURAL ENGINEERING, INC.

      2009
OMNIBUS INCENTIVE PLAN

       

      FOR GOOD
AND VALUABLE CONSIDERATION, China Architectural Engineering, Inc. (the
“Company”) hereby grants, pursuant to the provisions of the Company’s 2009
Omnibus Incentive Plan (the “Plan”), to the Participant designated in this
Notice of Grant of [Incentive/Non-Qualified]
Stock Option Award (the “Notice”) an option to purchase the number of shares of
the common stock of the Company set forth in the Notice (the “Shares”), subject
to certain restrictions as outlined below in this Notice and the additional
provisions set forth in the attached Terms and Conditions of Stock Option Award
(collectively, the “Agreement”).  Also enclosed is a copy of the
information statement describing important provisions of the Plan.

       

      Optionee:       [__________]

       

      
        
          
            
              
                	
                        

                          Date of
      Grant:               ____________

                        

                      	
                        

                          Type of
      Option:  [Incentive/Non-Qualified]
      Stock Option

                        

                      
	
                        

                          Exercise Price per
      Share:           $____

                        

                      	
                        

                          Expiration
      Date:                ____________

                        

                      
	
                        

                          Total
      Number of

                          Shares
      Granted:                      _______

                        

                      	
                        

                          Total Exercise
      Price:                              $______

                        

                      
	

                        Vesting
      Schedule:    [1/4 vesting on each of the
      first, second, third and fourth anniversaries of the date of the
      grant]

                      
	
                        

                          Exercise After Termination of
      Service:

                          Termination of Service for any
      reason: any non-vested portion of the Option expires
      immediately;

                          Termination of Service due to
      death or Disability: vested portion of the Option is exercisable by
      the Optionee (or, in the event of the Optionee’s death, the Optionee’s
      Beneficiary) for one year after the Optionee’s Termination;

                          Termination of Service for any
      reason other than death or Disability: vested portion of the Option
      is exercisable for a period of ninety days following the Optionee’s
      Termination.

                          In no event may this Option be
      exercised after the Expiration Date as provided
      above.

                        

                      

              

            

          

        

      

       

      By
signing below, the Optionee agrees that this [Incentive/Non-Qualified]
Stock Option Award is granted under and governed by the terms and conditions of
the Company’s 2009 Omnibus Incentive Plan and the attached Terms and
Conditions.

       

      
        	Participant 	China
      Architectural Engineering, Inc.
	 
      	 
      	 
      	 
      	 
      	 
      
	   
        	 
      	
                By:

              	 
        	 
      
	 
      	 
      	 
      	
                Title:

              	 
        	 
      
	
                Date:

              	   
        	 
      	
                Date:

              	 
        	 
      

      

      

      
        
          
             

          

          
            1

            
              

            

          

          
             

          

        

      

       

      TERMS
AND CONDITIONS OF STOCK OPTION AWARD

       

      1.           Grant of
Option.  The Option granted to the Optionee and described in
the Notice of Grant is subject to the terms and conditions of the Plan, which is
incorporated by reference in its entirety into these Terms and Conditions of
Stock Option Award.

       

      The Board
of Directors of the Company has authorized and approved the 2009 Omnibus Incentive Plan (the
“Plan”), which has been approved by the stockholders of the
Company.  The Committee has approved an award to the Optionee of a
number of shares of the Company’s common stock, conditioned upon the
Participant’s acceptance of the provisions set forth in the Notice and these
Terms and Conditions within 60 days after the Notice and these Terms and
Conditions are presented to the Optionee for review.  For purposes of
the Notice and these Terms and Conditions, any reference to the Company shall
include a reference to any Affiliate.

       

      If
designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option as defined in Section
422 of the Code.  Nevertheless, to the extent that the Option fails to
meet the requirements of an ISO under Section 422 of the Code, this Option shall
be treated as a Non-Qualified Stock Option (“NSO”).

       

      The
Company intends that this Option not be considered to provide for the deferral
of compensation under Section 409A of the Code and that this Agreement shall be
so administered and construed.  Further, the Company may modify the
Plan and this Award to the extent necessary to fulfill this intent.

       

      2.           Exercise of
Option.

       

      (a)           Right to
Exercise.  This Option shall be exercisable, in whole or in
part, during its term in accordance with the Vesting Schedule set out in the
Notice of Grant and with the applicable provisions of the Plan and this Option
Agreement.  No Shares shall be issued pursuant to the exercise of an
Option unless the issuance and exercise comply with applicable
laws.  Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to the Optionee on the date on which the Option
is exercised with respect to such Shares.  The Committee may, in its
discretion, (i) accelerate vesting of the Option, or (ii) extend the applicable
exercise period to the extent permitted under Section 6.03 of the
Plan.

       

      (b)           Method of
Exercise.  The Optionee may exercise the Option by delivering
an exercise notice in a form approved by the Company (the “Exercise Notice”)
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company.  The Exercise Notice
shall be accompanied by payment of the aggregate Exercise Price as to all Shares
exercised.  This Option shall be deemed to be exercised upon receipt
by the Company of such fully executed Exercise Notice accompanied by the
aggregate Exercise Price.

       

      (c)           Acceleration of Vesting on
Change in Control.  Unless otherwise specified in the Notice of
Grant, in the event of a Change in Control, no accelerated vesting of any
Options outstanding on the date of such Change in Control shall
occur.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      3.           Method of
Payment.  If the Optionee elects to exercise the Option by
submitting an Exercise Notice under Section 2(b) of this Agreement, the
aggregate Exercise Price (as well as any applicable withholding or other taxes)
shall be paid by cash or check; provided, however, that the
Committee may consent, in its discretion, to payment in any of the following
forms, or a combination of them:

       

      (a)           cash
or check;

       

      (b)           a
“net exercise” (as described in the Plan or such other consideration received by
the Company under a cashless exercise program approved by the Company in
connection with the Plan;

       

      (c)           surrender
of other Shares owned by the Optionee which have a Fair Market Value on the date
of surrender equal to the aggregate Exercise Price of the Exercised Shares and
any applicable withholding; or

       

      (d)           any
other consideration that the Committee deems appropriate and in compliance with
applicable law.

       

      4.           Restrictions on
Exercise.  This Option may not be exercised until such time as
the Plan has been approved by the stockholders of the Company, or if the
issuance of the Shares upon exercise or the method of payment of consideration
for those shares would constitute a violation of any applicable law or
regulation.

       

      5.           Non-Transferability of
Option.  This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by the Optionee [IF THE OPTION IS A NSO, THE
FOLLOWING LANGUAGE MAY BE INCLUDED PERMITTING LIMITED TRANSFER OF THE OPTION] [;
provided, however, that the Optionee may transfer the Options (i) pursuant to a
qualified domestic relations order (as defined by the Code or the rules
thereunder) or (ii) to any member of the Optionee’s Immediate Family or to a
trust, limited liability company, family limited partnership or other equivalent
vehicle, established for the exclusive benefit of one or more members of his
Immediate Family by delivering to the Company a Notice of Assignment in a form
acceptable to the Company.  No transfer or assignment of the Option to
or on behalf of an Immediate Family member under this Section 5 shall be
effective until the Company has acknowledged such transfer or assignment in
writing.  “Immediate Family” means the Optionee’s parents, spouse,
children, siblings, and grandchildren.  Following transfer, the
Options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer.  In the event an Option is
transferred as contemplated in this Section 5, such Option may not be
subsequently transferred by the transferee except by will or the laws of descent
and distribution.]  The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

       

      6.           Term of
Option.  This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      7.           Withholding.

       

      (a)           The
Committee shall determine the amount of any withholding or other tax required by
law to be withheld or paid by the Company with respect to any income recognized
by the Optionee with respect to the Option Award.

       

      (b)           The
Optionee shall be required to meet any applicable tax withholding obligation in
accordance with the provisions of Section 11.05 of the Plan.

       

      (c)           Subject
to any rules prescribed by the Committee, the Optionee shall have the right to
elect to meet any withholding requirement (i) by having withheld from this Award
at the appropriate time that number of whole shares of common stock whose fair
market value is equal to the amount of any taxes required to be withheld with
respect to such Award, (ii) by direct payment to the Company in cash of the
amount of any taxes required to be withheld with respect to such Award or (iii)
by a combination of shares and cash.

       

      8.           Defined
Terms.  Capitalized terms used but not defined in the Notice
and these Terms and Conditions shall have the meanings set forth in the Plan,
unless such term is defined in any Employment Agreement between the Optionee and
the Company or an Affiliate.  Any terms used in the Notice and these
Terms and Conditions, but defined in the Optionee’s Employment Agreement are
incorporated herein by reference and shall be effective for purposes of the
Notice and these Terms and Conditions without regard to the continued
effectiveness of the Employment Agreement.

       

      9.           Optionee
Representations.  The Optionee hereby represents to the Company
that the Optionee has read and fully understands the provisions of the Notice,
these Terms and Conditions and the Plan and the Optionee’s decision to
participate in the Plan is completely voluntary.  Further, the
Optionee acknowledges that the Optionee is relying solely on his or her own
advisors with respect to the tax consequences of this stock option
award.

       

      10.           Regulatory Limitations on
Exercises.  Notwithstanding the other provisions of this Option
Agreement, no option exercise or issuance of shares of Common Stock pursuant to
this Option Agreement shall be effective if (i) the shares reserved under the
Plan are not subject to an effective registration statement at the time of such
exercise or issuance, or otherwise eligible for an exemption from registration,
or (ii) the Company determines in good faith that such exercise or issuance
would violate any applicable securities or other law or regulation.

       

      11.           Miscellaneous.

       

      (a)           Notices.  All
notices, requests, deliveries, payments, demands and other communications which
are required or permitted to be given under these Terms and Conditions shall be
in writing and shall be either delivered personally or sent by registered or
certified mail, or by private courier, return receipt requested, postage prepaid
to the parties at their respective addresses set forth herein, or to such other
address as either shall have specified by notice in writing to the
other.  Notice shall be deemed duly given hereunder when delivered or
mailed as provided herein.

       

      (b)           Waiver.  The
waiver by any party hereto of a breach of any provision of the Notice or these
Terms and Conditions shall not operate or be construed as a waiver of any other
or subsequent breach.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      (c)           Entire
Agreement.  These Terms and Conditions, the Notice and the Plan
constitute the entire agreement between the parties with respect to the subject
matter hereof.

       

      (d)           Binding Effect;
Successors.  These Terms and Conditions shall inure to the
benefit of and be binding upon the parties hereto and to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives.  Nothing in these Terms and Conditions, express or
implied, is intended to confer on any person other than the parties hereto and
as provided above, their respective heirs, successors, assigns and
representatives any rights, remedies, obligations or liabilities.

       

      (e)           Governing
Law.  The Notice and these Terms and Conditions shall be
governed by and construed in accordance with the laws of the State of
Delaware.

       

      (f)           Headings.  The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of these Terms and Conditions.

       

      (g)           Conflicts;
Amendment.  The provisions of the Plan are incorporated in
these Terms and Conditions in their entirety.  In the event of any
conflict between the provisions of these Terms and Conditions and the Plan, the
provisions of the Plan shall control.  The Agreement may be amended at
any time by written agreement of the parties hereto.

       

      (h)           No Right to Continued
Employment.  Nothing in the Notice or these Terms and
Conditions shall confer upon the Optionee any right to continue in the employ or
service of the Company or affect the right of the Company to terminate the
Optionee’s employment or service at any time.

       

      (i)           Further
Assurances.  The Optionee agrees, upon demand of the Company or
the Committee, to do all acts and execute, deliver and perform all additional
documents, instruments and agreements which may be reasonably required by the
Company or the Committee, as the case may be, to implement the provisions and
purposes of the Notice and these Terms and Conditions and the Plan.

       

    

    
      
         

      

      
        5

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