Document:

8-K

                                                                                                            EXHIBIT 10.1

                                                    LICENSE AGREEMENT

                                                    concluded between

COSMOTRADE INVESTMENTS LIMITED, a company duly registered and incorporated in Cyprus, domiciled at the 4th Floor, 5
Costis Palamas Street, 2082 Nicosia and for these purposes duly represented by Michael Hurwitz (Hereinafter:
"Cosmotrade")

and

ZONE4PLAY UK LIMITED, a company incorporated in England domiciled at 6 Rosslyn Court, 10 Ornan Road, London NW3 4PU, UK
(Hereinafter: "Zone4Play")

1.   INTERPRETATION AND DEFINITIONS

In this Agreement the following words and expressions shall have the meanings assigned to them as follows:

"This Agreement" means this agreement together with all addendums, schedules and amendments thereto from time to time.

"Effective Date" means April 20, 2005 notwithstanding the date of signature of this Agreement.

"Intellectual Property Rights" means any and all copyright and other intellectual property rights, howsoever arising and
in whatever media, whether or not registered or capable of registration, including all patents, design rights, domain
names, trade marks, service marks, trade secrets, trade names, goodwill, know-how, database rights and any applications
for the protection or registration of these rights and all renewals and extensions thereof throughout the world.

"Party" means party to this Agreement and thus either Cosmotrade or Zone4Play and "Parties" shall mean both Cosmotrade
and Zone4Play.

"Unacceptable Material" means any material of any nature that is unlawful or which is defamatory, obscene, or which
contains any viruses, worms, trojan horses or any other contaminants or materials that have the ability to access or
modify, delete, disrupt or damage any data files or other computer programs, software or hardware or any material that
provides access to any such contaminants or materials

Any reference in this Agreement to a person shall include a reference to a juristic person, whether incorporated or
unincorporated, a natural person or association; and any reference to any gender shall include a reference to any other
gender.

A reference to days shall be a reference to calendar days. Any period referred to with reference to months shall
commence at midnight at the beginning of the day of the year on which the period commences and shall terminate at
midnight at the end of day immediately preceding the corresponding day in the final month of the period.

This Agreement and all of its provisions shall be interpreted in accordance with the common intention of the Parties
that

     -    this Agreement is concluded for the benefit of both Parties; and

     -    neither Party shall obtain an undue or disproportionate benefit to the exclusion of or at the expense of the
          other Party;

     -    their relationship shall be one of good faith at all times

2.   LICENSE

Zone4Play hereby grants Cosmotrade a non-exclusive licence during the Term to distribute, promote and sub-license the
Applications (as defined below).

3.   INTELLECTUAL PROPERTY

The Applications and the Intellectual Property Rights of whatever nature in the Applications are and shall remain the
exclusive legal and beneficial property of Zone4Play.

          a.   Zone4Play hereby grants Cosmotrade a non-exclusive, non-transferable licence during the Term to use such
               of Zone4Play's Intellectual Property Rights as expressly granted in this Agreement herein.

          b.   For the avoidance of doubt and without prejudice to anything in this Agreement, all rights of any nature
               in and to the Intellectual Property Rights of Zone4Play shall at all times (as between the parties
               hereto) remain in the exclusive legal and beneficial ownership of Zone4Play

4.   The Platform shall consist of the following:

     a.   ZoneMAS Backoffice

     b.   ZoneITS server side

     c.   the following 4 Interactive games :

     -    Roulette

     -    Slots

     -    Video Poker

     -    Blackjack

The Parties have agreed that the Platform shall be provided compatible with the following 10 mobile devices:

     1.   Nokia series 60

     2.   Nokia series 40

     3.   Motorola-V

     4.   Siemens-65

     5.   Samsung-2

     6.   Samsung-3

     7.   SonyEricssonP9

     8.   SonyEricssonT6x0

     9.   SonyEricssonS700

     10.  SonyEricssonK

Zone4Play undertakes the completion of the delivery of the Platform to take no longer than 120 days from the effective
date of the Agreement.

The last 30 days of the said period will be used for live testing of the Platform after commissioning the platform (soft
launch) within 90 days from signing of the agreement.

A detail technical specification of the Platform is attached to this Agreement as Appendix A.

5.   Cosmotrade shall deliver to Zone4Play and undertakes the following (hereinafter: "Cosmotrade deliverables"):

          (a)  Cosmotrade shall bear all Software and Hardware costs (third party Software and/or Hardware)

          (b)  Cosmotrade will host the platform servers on the Cosmotrade server farm (or other location where
               Cosmotrade servers are hosted) at Cosmotrade's expense and will allow Zone4Play remote access for the
               purpose of management and maintenance of the servers.

          (c)  Cosmotrade will reimburse Zone4Play for all pre-approved travel for the purpose of installation and
               maintenance of servers as well as instruction and creation of a customer service support array.

          (d)  Cosmotrade shall appoint a project manager as sole contact person with Zone4Play who shall, among other,
               be responsible for the following:

               a.   the approval of developed versions,

               b.   provision of texts for the Internet site and Help pages within the mobile application,

               c.   providing all information and technical assistance to enable the connection of the Zone4Play
                    BackOffice to the Cosmotrade credit card clearance systems.

     For avoidance of doubt, it is understood and acknowledged by Cosmotrade that Zone4Play's performance of its
obligations hereunder are conditional upon Cosmotrade providing Zone4Play with the Cosmotrade deliverables and that
failure to deliver such materials may result in corresponding delay on the part of Zone4Play.

6.   Terms and compensation

Cosmotrade will pay Zone4Play a total amount of (pound)150 000.00 (one hundred and fifty thousand GBP) for the complete
delivery of the ZoneMAS as defined above. The payment of the above amount will be structured as follows:

     a)   (pound)50,000.00 (fifty thousand GPB) will be paid on the signing of this Agreement.

     b)   (pound)50, 000.00 (fifty thousand GPB) will be paid within 30 days of the full delivery of the Platform
          defined in 2 above.

     c)   In the event that Cosmotrade fails to reach an average net win of (pound) 80,000 per month following 120 days
          of operation, of which Zone4Play shall be entitled to a revenue share as detailed in section 7, Cosmotrade
          shall pay Zone4Play an additional fee of (pound) 50,000 to be paid within 150 days of operation.

     d)   In the event that further devices are requested by Cosmotrade, other than that defined under section 2 above,
          Cosmotrade shall pay Zone4Play an additional (pound)1000 per game per each device.

7.   Revenue Share

     Notwithstanding sec. 6 above, Cosmotrade shall pay Zone4Play the following Revenue Share.

     a)   Cosmotrade will operate the Platform for its own benefit and through its own distribution channels and will
          pay Zone4Play an aggregate 20% Revenue Share on a monthly basis in arrears.

     b)   Such Revenue Share will be calculated as a percentage of the net win which is defined as the total deposits
          minus withdrawal within a calendar month.

     c)   In cases when the Revenue Share in any calendar month is assessed to be less than (pound)10 000.00 Cosmotrade
          will pay a minimum of (pound)10000.00. This minimum guaranty mechanism will be in place for 14 months of
          operation following 180 days of operation (i.e. following section 6 (c) and section 7 (d) below.

     d)   Such minimum as defined in c) above will apply only after 60 days following 120 days of operation as detailed
          in section 6 (c) above. The royalty for the period following 120 days of operation as per section 6 (c) and
          for a period of 60 days will be calculated strictly as 20% of the net win.

     e)   Each payment made to Zone4Play shall be accompanied by a report ("Revenue Report") providing support for the
          payment. The Revenue Report provided to Zone4Play shall include the total amount of Cosmotrade's net win
          received during the preceding calendar month, the method of clculation, and the amounts of the Revenue Share
          being paid for the relevant month.

8.   Term

     a) This Agreement will commence on the Effective Date and shall continue in full force and effect for a period of
     five (5) years hereinafter: the "Term").

     (b) A party may terminate this Agreement with immediate effect by giving written notice to the other party if the
     other party commits a material breach of this Agreement and (in the case of a breach capable of being remedied)
     fails, within thirty (30) days after receipt of a request in writing from the non-defaulting party to do so, to
     remedy the breach; or becomes unable to pay its debts (within the meaning of section 123 of the Insolvency Act
     1986) or becomes insolvent, or an order is made or a resolution passed for its liquidation, administration,
     winding-up, or dissolution (otherwise than for the purposes of a solvent amalgamation or reconstruction), or an
     administrative or other receiver, manager, trustee, liquidator, administrator, or similar officer is appointed over
     all or any substantial part of the assets of the other party, or anything analogous to any of these events occurs
     to the other party.

     (c) Upon termination of the Term, Cosmotrade shall promptly return to Zone4Play any and all materials and
     intellectual property owned by Zone4Play and shall cease all activity relating to the Platform.

9.   Representations and Warranties

     a.   Each party represents and warrants to the other that:

          i.   this Agreement has been validly executed by a duly authorised representative, and once executed, will
               impose valid and binding legal obligations upon it; and

          ii.  its entry into and performance of this Agreement will not conflict with any of its existing obligations,
               or any other agreement to which it is a party.

     b.   Zone4Play represents, warrants and undertakes to Cosmotrade that:

          i.   it has full power and authority to grant the licence in sec.2;

          ii.  it is the exclusive legal and beneficial owner of all Intellectual Property Rights in the Platform with
               full power and authority to grant the rights granted in this Agreement;

          iii. the Platform (including any modifications) will comply in all respects with Addendum A

          iv.  the Platform does not and will not contain or constitute any Unacceptable Material

     c.   Cosmotrade represents, warrants and undertakes to Zone4Play that:

          i.   It is, and shall remain for the duration of this Agreement, the holder of a valid Gaming License
               (acknowledged and approved by the EU) for the operation of the platform.

10.  Confidentiality

     10.1 In the course of performing this Agreement, each party may have access to the confidential information of the
     other including the software, technical processes and formulas, Intellectual Property Rights, product designs,
     relationships, projections, marketing data, and usage rates of the other (collectively "CONFIDENTIAL INFORMATION").

     10.2 Each party will receive all such Confidential Information in confidence and will not use any such Confidential
     Information for any purpose (other than for the proper performance of its obligations hereunder in accordance with
     the terms and conditions of this Agreement), disclose any such Confidential Information to any third party (other
     than its professional or legal advisers), or reproduce or retain any such Confidential Information or copies
     thereof in any form or medium, without the prior written consent of the party to whom the Confidential Information
     belongs. Each party acknowledges and agrees that the Confidential Information constitutes valuable proprietary
     property of the other party and that the other party may suffer irreparable harm which may not be capable of
     adequate compensation by means of damages alone if unauthorised third parties access or use Confidential
     Information or if Confidential Information is used other than as strictly necessary for the performance of this
     Agreement. Each party agrees that if any Confidential Information is disclosed or used (or threatened to be
     disclosed or used) in breach of this Agreement, then the party not in breach will have, in addition to any other
     remedies available to it, the right to equitable relief (including specific performance and injunction). Without
     prejudice to any of the foregoing Five may disclose Confidential Information to Operators for the purpose of
     executing its undertakings under agreement only.

     10.3 The obligations of confidentiality contained in Clauses 10.1 and 10.2 shall not apply to any information which
     the recipient of the Confidential Information can establish:

          10.3.1 is in the public domain at the date of disclosure to the recipient or subsequently enters the public
               domain other than as a consequence of any unauthorised disclosure, act or omission by the recipient, its
               employees, officers or personnel; or

          10.3.2 is in the possession of or already known to the recipient at the date of disclosure as evidenced by the
               recipient's written records; or

          10.3.3 is required to be disclosed by law or by any government authority.

     10.4 The obligations of confidentiality in this Clause 14 shall remain in full force and effect notwithstanding the
     expiry or termination of this Agreement.

11   LIABILITY AND INDEMNITY

     11.1 Nothing in this Agreement shall be deemed to or shall constitute a restriction or exclusion of either party's
          liability for death or personal injury arising from its negligence or for any loss, damage or other liability
          arising out of either party's fraudulent or criminal acts, statements or omissions.

     11.2 Cosmotrade shall defend and indemnify Zone4Play from and against any and all claims, demands, actions, costs
          (including reasonable legal fees), damages, expenses, liabilities, proceedings or litigation arising from any
          breach by Cosmotrade.

12.  Dispute Resolution

The Agreement shall be governed by English law and shall be subject to the exclusive jurisdiction of the English courts

13.  Applicable law

This Agreement shall be governed by and interpreted in accordance with the laws of the United Kingdom.

14.  Notices and Domicilium citandi et executandi

All written notices to be given by either Party to the other may be given by e-mail, fax or delivered by hand.

Cosmotrade shall accept service of all notices at c/o Cosmotrade, mikeyh@mweb.co.za (email) and +27118070987 (fax) and
Cosmotrade's address (by hand).

Zone4Play shall accept service of all notices at c/o Zone4Play UK, 6 Rosslyn Court, 10 Ornan Road, London NW3 4PU, UK ,
and uri@zone4play (email) and +972 3 6472722 (fax)

15.  Matters not covered by this Agreement

The Parties agree that any matters essential to the relationship between the Parties and not covered by this Agreement
shall be negotiated between them from time to time in good faith and such agreements shall be reduced to writing and
signed by or on behalf of both Parties and shall be appended to the whole Agreement as schedules thereto, whereupon they
shall form an integral part of the whole Agreement in all respects.

SIGNED                                                            )
for and on behalf of                                              )
[ZONE4PLAY (UK) LIMITED]                                          )

/S/ Shimon Citron
-----------------
Shimon Citron
CEO

SIGNED                                                            )
for and on behalf of                                              )
COSMOTRADE INVESTMENTS LIMITED                                    )

/S/ M. Hurwitz
--------------
M. Hurwitz
Authorized Signatory

EXHIBITS

The following exhibit has been omitted and will be supplementally furnished to the Securities and Exchange Commission
upon request:

Appedix A - ZoneITS & ZoneMAS Technical Specifications.Ambion, Inc

      Staktek Holdings, Inc.

Employee Stock Purchase Plan

	Definitions and Construction

	Definitions

.  Where the following capitalized words and phrases are used in the Plan, each has the respective meaning set forth below, unless the context clearly indicates to the contrary: 

	Board

:  The Board of Directors of Staktek Holdings, Inc.  

	Code

:  The Internal Revenue Code of 1986, as amended.  

	Committee

:  The committee appointed by the Board to administer the Plan as provided in Article VII.  

	Company

:  Staktek Holdings, Inc. and each Participating Company.  

	Date of Exercise

:  The last day of each Option Period.  

	Date of Grant

:  The first day of each Option Period.  

	Eligible Compensation

	:  Regular straight-time earnings or base salary, determined before giving effect to any salary reduction agreement pursuant to (i) a qualified cash or deferred arrangement (within the meaning of section 401(k) of the Code) or (ii) any cafeteria plan (within the meaning of section 125 of the Code).  "Eligible Compensation" will not include overtime, bonuses, commissions, severance pay, incentive pay, shift premium differentials, pay in lieu of vacation, reimbursements, or any other special or incentive payments excluded by the Committee in its discretion (applied on a uniform basis).  

	Eligible Employee

:  With respect to each Date of Grant, each employee of the Company, except an employee who (i) is regularly scheduled to work 20 hours or less per week, or (ii) is regularly scheduled to work less than five months in any calendar year; provided, however, that no employee who, determined immediately after an option would be granted, owns stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or of its Parent or Subsidiaries (within the meaning of sections 423(b)(3) and 424(d) of the Code) will be an "Eligible Employee"; and, provided further that, notwithstanding any other provision in the Plan to the contrary, the Company will not be obligated to grant options or to offer, issue, sell, or deliver Stock under the Plan to any employee who is a citizen or resident of a jurisdiction the laws of which prohibit the Company from taking any such action with respect to such employee, and no such employee will be an "Eligible Employee" during the period the Company is so prohibited.  

	Exchange Act

:  The Securities Exchange Act of 1934, as amended.  

	Fair Market Value

:  As of any specified date, (i) the closing price of the Stock either (a) if the Stock is traded on the National Market System of the NASDAQ, as reported on the National Market System of NASDAQ on that date (or if no sales occur on that date, on the last preceding date on which such sales of the Stock are so reported) or (b) if the Stock is listed on a national securities exchange, as reported on the stock exchange composite tape on that date (or if no sales occur on that date, on the last preceding date on which such sales of the Stock are so reported); (ii) if the Stock is not traded on the National Market System of the NASDAQ or a national securities exchange but is traded over the counter at the time a determination of its fair market value is required to be made hereunder, the average between the reported high and low or closing bid and asked prices of the Stock on the most recent date on which Stock was publicly traded; or (iii) in the event the Stock is not publicly traded at the time a determination of its value is required to be made hereunder, the amount determined by the Board in its discretion in such manner as it deems appropriate.  

	Option Period

:  The three-consecutive-month period beginning each January 1, April 1, July 1, and October 1.  

	Option Price

:  The per share price of Stock, as determined in accordance with Section 3.3.  

	Option Shares

:  The shares of Stock acquired pursuant and subject to the terms of the Plan.  

	Parent

:  A parent corporation within the meaning of section 424(e) of the Code.  

	Participant

:  Each Eligible Employee who has elected to participate in the Plan for an Option Period.  

	Participating Company

:  Staktek Group L.P. and each other present or future Parent or Subsidiary of Staktek Holdings, Inc. that is participating in the Plan pursuant to Section 9.1.  

	Plan

:  This Staktek Holdings, Inc. Employee Stock Purchase Plan, as amended from time to time.  

	Restriction Period

:  The period of time during which shares of Stock acquired by a Participant may not be sold, assigned, pledged, exchanged, hypothecated, or otherwise transferred, encumbered, or disposed of by such Participant as provided in Section 4.3.  

	Rule 16b-3

:  SEC Rule 16b-3 promulgated under the Exchange Act, as such may be amended from time to time, and any successor rule, regulation, or statute fulfilling the same or a similar function.  

	Stock

:  The shares of Staktek Holdings, Inc.'s common stock, par value $.001 per share.  

	Subsidiary

:  A subsidiary corporation within the meaning of section 424(f) of the Code.  

	Number and Gender

.  Wherever appropriate herein, words used in the singular will be considered to include the plural, and words used in the plural will be considered to include the singular.  The masculine gender, where appearing in the Plan, will be deemed to include the feminine gender.  

	Headings

.  The headings and subheadings in the Plan are included solely for convenience, and if there is any conflict between such headings or subheadings and the text of the Plan, the text will control.  

	Intention to be Employee Stock Purchase Plan

.  The Plan is intended to qualify as an "employee stock purchase plan" within the meaning of section 423 of the Code, and all provisions of the Plan will be construed in a manner consistent with the requirements of that section of the Code.  

	

Eligibility and Participation

	Eligibility

.  Each employee of the Company who is an Eligible Employee as of the first day of an Option Period will be eligible to participate in the Plan with respect to such Option Period.  An Eligible Employee who is so eligible may elect to become a Participant by complying with the payroll deduction authorization procedures set forth in Section 2.2.  

	Payroll Deduction Authorization

.  

	Except as provided in Subsection 2.2.3, each Eligible Employee who elects to participate in the Plan for an Option Period will become a Participant for that Option Period by delivering to the Company, within the time period prescribed by the Committee, a written payroll deduction authorization in a form approved by the Company whereby such Eligible Employee designates, subject to the limitation set forth in Sections 3.4 and 3.5, an integral percentage (from 2% to 15%) of his Eligible Compensation to be deducted from his compensation each pay period and paid into the Plan for his account.  Such notice and election will be effective as of the first day of the Option Period following receipt by the Company of such notice.  

	Except as provided in Sections 2.3, 2.4, and 2.5, a Participant's payroll deduction authorization for an Option Period may not be changed during such Option Period.  

	Subject to the limitations set forth in Sections 3.4 and 3.5, a Participant who (1) has elected to participate in the Plan pursuant to Subsection 2.2.1 for an Option Period and (2) takes no action to change or revoke such election as of the first day of the next following Option Period will be deemed to have made the same election to participate in the Plan, including the same payroll deduction authorization, for such subsequent Option Period as was in effect on the first day of the immediately preceding Option Period, but only if such Participant is an Eligible Employee as of the first day of such following Option Period.  Payroll deductions of a Participant that are limited by Section 3.5 will recommence automatically at the rate provided in such Participant's payroll deduction authorization at the beginning of the first Option Period that is scheduled to end in the following calendar year, unless such Participant changes the amount of his payroll deduction authorization in accordance with this Subsection or terminates participation in the Plan as provided in Section 2.3 or 2.4.   

	Withdrawal of Plan Participation

.  Any Participant may withdraw in whole from the Plan during an Option Period, provided that the withdrawal is made at least ten days prior to the Date of Exercise relating to such Option Period.  Partial withdrawals will not be permitted.  A Participant who wishes to withdraw from the Plan must timely deliver to the Company a notice of withdrawal in a form approved by the Committee.  The Company, as soon as administratively practicable following the time when the notice of withdrawal is delivered to the Company, will refund to the Participant the amount of his payroll deductions under the Plan (without interest) that have not yet been otherwise returned to such Participant or used upon exercise of options, and thereupon, automatically and without any further act on his or her part, such Participant's payroll deduction authorization and interest in unexercised options under the Plan will terminate.  A Participant who withdraws from the Plan will be eligible to participate again in the Plan upon expiration of the Option Period during which he/she withdrew by complying with the procedures set forth in Section 2.2, provided that the Participant is an Eligible Employee otherwise eligible to participate in the Plan at such time.  

	Effect of Termination of Employment

.  If a Participant terminates employment with the Company for any reason whatsoever, his participation in the Plan automatically and without any act on his part will terminate as of the date of such termination of his employment, and thereupon, automatically and without any further act on his part, such Participant's payroll deduction authorization will terminate.  Upon termination of a Participant's employment with the Company for any reason, the Company will as soon as administratively practicable following such termination refund to such Participant the amount of his aggregated payroll deductions allocated to his account under the Plan (without interest) that have not yet been returned to him or used to exercise options under the Plan.  Upon such termination of employment, the interest of such Participant in unexercised options under the Plan will immediately terminate.  

	Effect of Leave of Absence

.  

	If a Participant takes a paid leave of absence approved by the Company and meeting the requirements of Treasury regulation section 1.421-7(h)(2), subject to Subsection 2.5.3, such Participant will continue as a Participant in the Plan, and his elected payroll deductions will continue as long as such Participant is an Eligible Employee on the first day of the respective Option Period.  

	If a Participant takes an unpaid leave of absence that is approved by the Company and meets the requirements of Treasury regulation section 1.421-7(h)(2), subject to Subsection 2.5.3, such Participant's payroll deductions for such Option Period that were made prior to such leave may remain in the Plan and be used to purchase Stock under the Plan on the Date of Exercise relating to such Option Period.  However, such Participant may not contribute to the Plan during such unpaid leave of absence.  

	If a Participant takes a leave of absence that is not described in Subsection 2.5.1 or 2.5.2, such Participant will be treated, for purposes of the Plan, as if he has terminated his employment with the Company pursuant to the provisions of Section 2.4 hereof.  Further, notwithstanding the preceding provisions of this Section, if a Participant takes a leave of absence that is described in Subsection 2.5.1 or 2.5.2 and such leave of absence exceeds 90 days, such Participant will be considered, for purposes of the Plan, to have terminated his employment with the Company pursuant to the provisions of Section 2.4 on the 91st day of such leave of absence.  

	

Grant of Options

	Grant of Options

.  The Company will, on each Date of Grant, grant an option under the Plan to purchase shares of Stock to each Participant.  

	Term of Options

.  Except as provided in Section 6.2, the term of each option will be three months, with each Option Period beginning on the Date of Grant and ending on the Date of Exercise of such option.  

	Option Price

.  The Option Price with respect to an option will be an amount equal to 85% of the Fair Market Value of the Stock on the Date of Exercise of such option.  

	Number of Shares Subject to Option

.  Subject to Sections 3.5 and 3.6, the number of shares of Stock subject to a Participant's option for an Option Period will be equal to the quotient of (1) the aggregate payroll deductions withheld on behalf of such Participant during such Option Period, divided by (2) the Option Price of the Stock applicable to such Option Period, rounded down to the nearest whole share.  The preceding notwithstanding, the maximum number of shares of Stock that may be subject to any option for a Participant in an Option Period may not exceed 1,000 (subject to adjustment as provided in Section 6.1).  

	$25,000 Limitation

.  No Participant will be granted an option under the Plan to the extent such option permits such Participant to purchase Stock under the Plan and under all other employee stock purchase plans of the Company and its Parent and Subsidiaries in an amount that exceeds $25,000 of Fair Market Value of Stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time (within the meaning of section 423(b)(8) of the Code).  Any payroll deductions in excess of the amount specified in the foregoing sentence will be returned to the Participant (without interest) as soon as administratively practicable following the next Date of Exercise.  

	Aggregate Limitation on Shares

.  In the event that the aggregate number of shares subject to Participants' options under the Plan for an Option Period would cause the limitation set forth in Section 5.1 to be exceeded, such aggregate number of shares will be decreased as of the Date of Exercise by the number of shares in excess of such limitation.  The number of shares subject to each Participant's option will be reduced on a pro rata basis.  Any excess payroll deductions remaining in a Participant's account after exercise of such option will be returned to the Participant (without interest) as soon as administratively practicable following such Date of Exercise.  

	No Assignment of Option

.  An option granted under the Plan will not be transferable otherwise than by will or the laws of descent and distribution.  Each option will be exercisable only by the employee to whom such option is granted and only during his lifetime.  The Company will not recognize and will be under no duty to recognize any assignment or purported assignment by an employee of his option or of any rights under his option or under the Plan.  

	No Rights of Stockholder Until Option Exercised

.  With respect to shares of Stock subject to an option, an optionee will not be deemed to be a stockholder, and he will not have any of the rights or privileges of a stockholder, until such option has been exercised.  With respect to an individual's Stock held by the custodian pursuant to Section 4.2, the custodian will, as soon as practicable, pay the individual any cash dividends attributable thereto or credit such dividends to such individual's account (as directed by the Committee in its discretion applied in a uniform manner) and will, in accordance with procedures adopted by the custodian, facilitate the individual's voting rights attributable thereto.  

	

Exercise of Options and Option Shares

	Exercise of Options

.  

	Subject to the limitations set forth in Sections 3.4, 3.5, and 3.6, each Participant for an Option Period will automatically, and without any act on his part, exercise his option on the Date of Exercise of such Option Period to the extent such Participant's aggregate payroll deductions for such Option Period are sufficient to purchase at the Option Price at least one whole share of Stock and to the extent the issuance of Stock to such Participant upon such exercise is lawful.  Such option will be exercised for the full number of shares of Stock subject to such option as set forth in Section 3.4.  

	Any excess payroll deductions remaining in a Participant's account after exercise of an option because such excess is not sufficient to purchase a whole share of Stock will either (1) be applied to the purchase of shares of Stock during the next Option Period as if such Participant had contributed such amount by payroll deduction to the Plan during such next Option Period unless such Participant has elected not to participate in the Plan during that next Option Period in accordance with Subsection 2.2.1 or 2.2.3 or (2) be refunded to the Participant (without interest) as soon as administratively practicable after the applicable Exercise Date if the Participant has elected not to participate in the Plan, or cannot participate in the Plan because of the limitations in Section 3.5 or 3.6, during that next Option Period.  

	Delivery of Share Certificates to Custodian

.  

	Except as otherwise provided under Subsection 4.2.2, as soon as administratively practicable after each Date of Exercise, the Company will deliver to a custodian selected by the Committee one or more certificates representing (or will otherwise cause to be credited to the account of such custodian) the total number of whole shares of Stock respecting options exercised on such Date of Exercise in the aggregate of all of the Participants during the applicable Option Period.  Such custodian will keep accurate records of the beneficial interests of each Participant in such shares by means of Participant accounts under the Plan, and will provide each Participant with periodic statements with respect thereto as may be directed by the Committee.  If the Company is required to obtain from any United States commission or agency authority to issue any such shares, the Company will seek to obtain such authority.  Inability of the Company to obtain from any commission or agency (whether United States or foreign) authority that counsel for the Company deems necessary for the lawful issuance of any such shares will relieve the Company from liability to any Participant except to return to him the amount of his payroll deductions under the Plan that would otherwise have been used upon exercise of the relevant option.  

	With respect to the grant of an option, the Company may require the Participants to deposit the certificates evidencing the Option Shares purchased pursuant to such grant with the Company or an agent designated by the Company under the terms and conditions of escrow and security agreements approved by the Company.  If the Company does not require such deposit as a condition of exercise of the option, the Company reserves the right at any time to require the Participants of such grant to so deposit the certificates in escrow.  The Company will bear the expenses of the escrow.  The escrow agent will deliver to the Participants the certificates when they are no longer subject to such restrictions.  

	Restrictions on Transfer of Option Shares

.  The Committee may from time to time specify, with respect to a particular grant of options, any Restriction Period that will apply to the Option Shares acquired pursuant to such options.  Except as hereinafter provided, during any such Restriction Period applicable to Option Shares acquired under the Plan, such Option Shares may not be sold, assigned, pledged, exchanged, hypothecated, or otherwise transferred, encumbered, or disposed of by the Participant who has purchased such shares; provided, however, that such restriction will not apply to the transfer, exchange, or conversion of such Option Shares pursuant to a merger, consolidation, or other plan of reorganization of the Company, but the stock, securities, or other property (other than cash) received upon any such transfer, exchange, or conversion will also become subject to the same transfer restrictions applicable to the original Option Shares, and will be held by the custodian, pursuant to the provisions hereof.  Upon the expiration of such Restriction Period, the transfer restrictions set forth in this Section will cease to apply, and the optionee may, pursuant to procedures established by the Committee and the custodian, direct the sale or distribution of some or all of the whole Option Shares in his account that are not then subject to transfer restrictions and, in the event of a sale, request payment of the net proceeds from such sale.  The Committee may cause the Option Shares issued in connection with the exercise of options under the Plan to bear such legends or other appropriate restrictions, and the Committee may take such other actions as it deems appropriate in order to reflect the transfer restrictions set forth in this Section and to ensure compliance with applicable laws.  

	

Stock Subject to the Plan

	Stock Subject to the Plan

.  Subject to the provisions of Section 6.1, the aggregate number of shares that may be sold pursuant to options granted under the Plan will not exceed 1,000,000 shares of the authorized Stock, with such maximum number to be increased beginning with the first business day of each fiscal year beginning on April 1, 2005 by a number equal to the lesser of (x) one percent (1%) of the number of shares of Stock outstanding as of the last business day of the immediately preceding fiscal year and (y) 300,000 shares.  Shares that may be sold pursuant to options granted under the Plan may be unissued shares or reacquired shares, including shares bought on the market or otherwise for purposes of the Plan.  Should any option granted under the Plan expire or terminate prior to its exercise in full, the shares theretofore subject to such option may again be subject to an option granted under the Plan.  Any shares that are not subject to outstanding options upon the termination of the Plan will cease to be subject to the Plan.  

	Securities Laws

.  The Company will not be obligated to issue any Stock pursuant to any option granted under the Plan at any time when the offer, issuance, or sale of shares covered by such option has not been registered under the Securities Act of 1933, as amended, or does not comply with such other state, federal, or foreign laws, rules, or regulations, or the requirements of any stock exchange upon which the Stock may then be listed, as the Company or the Committee deems applicable and when, in the opinion of legal counsel for the Company, there is no exemption from the requirements of such laws, rules, regulations, or requirements available for the offer, issuance, and sale of such shares.  Further, all Stock acquired pursuant to the Plan will be subject to the Company's policies concerning compliance with securities laws and regulations, as such policies may be amended from time to time.  The terms and conditions of options granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange Act will comply with any applicable provisions of Rule 16b-3.  As to such persons, the Plan will be deemed to contain, such options will contain, and the Option Shares issued upon exercise thereof will be subject to such additional conditions and restrictions as may be required from time to time by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.  

	

Recapitalization or Reorganization

	Adjustments for Changes in Stock

.  Whenever any change is made in the Stock, by reason of a stock dividend or by reason of subdivision, stock split, reverse stock split, recapitalization, reorganization, combination, reclassification of shares, or other similar change, appropriate action will be taken by the Committee to adjust accordingly the number of shares subject to the Plan, the maximum number of shares that may be subject to any option, and the number and Option Price of shares subject to options outstanding under the Plan.  

	Merger or Consolidation

.  If Staktek Holdings, Inc. will not be the surviving corporation in any merger or consolidation (or survives only as a subsidiary of another entity), or if Staktek Holdings, Inc. is to be dissolved or liquidated, then, unless a surviving corporation assumes or substitutes new options (within the meaning of section 424(a) of the Code) for all options then outstanding, (1) the Date of Exercise for all options then outstanding will be accelerated to a date fixed by the Committee prior to the effective date of such merger or consolidation or such dissolution or liquidation, and (2) upon such effective date, any unexercised options will expire and, as soon as administratively practicable, the Company will refund to each Participant the amount of such Participant's payroll deductions under the Plan (without interest) that have not yet been otherwise returned to him or used upon exercise of options.  

	

Administration

	Composition of Committee

.  The Plan will be administered by the Committee, which will be appointed by the Board.  In the absence of the Board's appointment of such Committee to administer the Plan, the Board will serve as the Committee.  

	Powers

.  Subject to the provisions of the Plan, the Committee will in its discretion interpret the Plan and all options granted under the Plan, make such rules as it deems necessary for the proper administration of the Plan, and make all other determinations necessary or advisable for the administration of the Plan.  In addition, the Committee will in its discretion correct any defect or supply any omission or reconcile any inconsistency in the Plan, or in any option granted under the Plan, in the manner and to the extent that the Committee deems appropriate to carry the Plan or any option into effect.  The Committee will, in its sole discretion, make such decisions and determinations and take such actions, and all such decisions, determinations, and actions taken or made by the Committee pursuant to this or any other provision of the Plan will be binding and conclusive on all parties.  The Committee will have the authority to delegate routine day-to-day administration of the Plan to such officers and employees of the Company, as the Committee deems appropriate.  

	Indemnification

.  Staktek Holdings, Inc. will, to the extent permitted by law, indemnify and hold harmless each member of the Committee and each member of the Board or a delegate of either against any and all expenses and liabilities arising out of such individual's administrative functions or fiduciary responsibilities related to the Plan, including any expenses and liabilities that are caused by or result from an act or omission constituting the negligence of such individual in the performance of such functions or responsibilities, but excluding expenses and liabilities that are caused by or result from such individual's own gross negligence or willful misconduct.  Expenses against which such individual will be indemnified hereunder will include, without limitation, the amounts of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted or a proceeding brought or settlement thereof.  

	

Termination and Amendment of the Plan

	Termination of Plan

.  The Board in its discretion may terminate the Plan at any time with respect to any Stock for which options have not theretofore been granted.  Except with respect to options then outstanding, if not sooner terminated under the provisions of the preceding sentence, the Plan will automatically terminate on the earlier of (1) the Date of Exercise on which the aggregate number of shares sold under the Plan has reached the limitation set forth at Section 5.1 or (2) December 31, 2014, and thereafter no further payroll deductions will be made and no further options will be granted under the Plan.  

	Amendment of Plan

.  The Board will have the right to alter or amend the Plan or any part thereof from time to time; provided, however, that no change in any option theretofore granted may be made that would impair the rights of an optionee without the consent of such optionee; and provided, further, that the Board may not, without the approval of the stockholders, amend the Plan to (1) increase the aggregate number of shares of Stock that may be sold pursuant to options granted under the Plan or (2) alter the classification of entities eligible to be Participating Companies.  

	

Participating Companies

	Participating Companies

.  The Committee may designate any present or future Parent or Subsidiary of the Company that is eligible by law to participate in the Plan as a Participating Company by written instrument delivered to the designated Participating Company.  Such written instrument will specify the effective date of such designation and will become, as to such designated Participating Company and persons in its employment, a part of the Plan.  The terms of the Plan may be modified as applied to the Participating Company only to the extent permitted under section 423 of the Code.  Transfer of employment among Staktek Holdings, Inc. and Participating Companies will not be considered a termination of employment hereunder.  Any Participating Company may, by appropriate action of its governing body, terminate its participation in the Plan.  Moreover, the Committee may, in its discretion, terminate a Participating Company's Plan participation at any time.  

	

Miscellaneous

	Use of Funds; No Interest Paid

.  All funds received or held by the Company under the Plan will be included in the general funds of the Company free of any trust or other restriction and may be used for any corporate purpose.  No interest will be paid to any Participant with respect to any amounts held in his account under the Plan.  

	No Restriction on Corporate Action

.  Nothing contained in the Plan will be construed to prevent the Company or any Parent or Subsidiary of the Company from taking any corporate action that is deemed by the Company or such Parent or Subsidiary of the Company to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any option granted under the Plan.  No employee, beneficiary, or other person will have any claim against the Company or any Parent or Subsidiary of the Company as a result of any such action.  

	Not a Contract of Employment

.  The adoption and maintenance of the Plan will not be deemed to be a contract between the Company and any person or to be consideration for the employment of any person.  Participation in the Plan at any given time will not be deemed to create the right to participate in the Plan or in any other arrangement permitting an employee of the Company to purchase Stock at a discount.  The rights and obligations under any Participant's terms of employment with the Company will not be affected by participation in the Plan.  Nothing herein contained will be deemed to give any person the right to be retained in the employ of the Company or to restrict the right of the Company to discharge any person at any time, nor will the Plan be deemed to give the Company the right to require any person to remain in the employ of the Company or to restrict any person's right to terminate his employment at any time.  The Plan will not afford any employee any additional right to compensation as a result of the termination of such employee's employment for any reason whatsoever.  

	Severability

.  If any provision of the Plan is held to be illegal or invalid for any reason, said illegality or invalidity will not affect the remaining provisions hereof; instead, each provision will be fully severable, and the Plan will be construed and enforced as if said illegal or invalid provision had never been included herein.  

	Compliance with Applicable Laws

.  The Company's obligation to offer, issue, sell, or deliver Stock under the Plan is at all times subject to all approvals of and compliance with any governmental authorities (whether domestic or foreign) required in connection with the authorization, offer, issuance, sale, or delivery of Stock as well as all federal, state, local, and foreign laws.  

	Governing Law

.  All provisions of the Plan will be construed in accordance with the laws of the state of Texas except to the extent preempted by federal law.

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