Document:

<PAGE>

                                                                   Exhibit 10.13

                       DISTRIBUTION AND LICENSE AGREEMENT

THIS AGREEMENT is entered into this 28th day of July, 2000, by and between J. R.
SIMPLOT COMPANY, hereinafter referred to as "SELLER", having its principal place
of business at 999 Main Street, Suite 1300, Boise, Idaho 83702, and ECO SOIL
SYSTEMS, INC., hereinafter referred to as "ECO SOIL", and having its principal
place of business at 10740 Thornmint Road, San Diego, California, 92127.

                                    RECITALS

         A.       ECO SOIL has developed, and is engaged in, the manufacture and
                  sale of certain proprietary products for use in turf grass
                  industry.

         B.       SELLER has a distribution network to sell materials to the
                  turf grass industry.

         C.       ECO SOIL desires to grant, and SELLER desires to obtain an
                  exclusive right to market, sell and distribute products as
                  hereinafter set forth.

                            COVENANTS AND CONDITIONS

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained, the parties agree as follows:

ARTICLE I: DEFINITIONS

         Section 1. PRODUCTS. "Products" shall mean all products formulated or
sold by ECO SOIL. SELLER will use ECO SOIL as its principal supplier in Products
ECO SOIL provides (see Appendix A).

         Section 2. TERM. "Term" shall mean the period commencing from the date
hereof, and continuing for a period of five (5) years, upon review at the end of
each year, unless terminated by either party.

         Section 3. TERRITORY. "Territory" shall mean the golf course, and
institutional turf grass maintenance industries in designated territories.
Territories shall be added at the agreement of both parties. (Territories - see
Appendix B)

ARTICLE II: EXCLUSIVE APPOINTMENT

         Section 1. APPOINTMENT. ECO SOIL hereby appoints SELLER, for the Term
hereof, and SELLER hereby accepts an exclusive appointment to sell, market and
distribute the Products within the designated Territory. In the furtherance of
such appointment, ECO SOIL agrees to sell Products only to SELLER for use in
designated Territory and SELLER agrees to purchase only from ECO SOIL its full
requirements, except as noted below, for Products comparable to Products covered
herein. The private label slow release nitrogen liquid fertilizers are only
produced for the Northeastern

                                                                               1
<PAGE>

United States. If Eco Soil produces similar products in other regions, they may
be considered for inclusion in this agreement.

         Section 2. IMPROVEMENTS. During each annual period in which the
Agreement is in effect, the parties shall disclose anticipated development work
for the next coming term. Both parties shall, without charge, promptly make
available to one another any technical information relating to protocols,
applications or improvements to Products.

         Section 3. SPECIAL RESERVATION. ECO SOIL specifically reserves the
right to sell its product line, in any manner in which it shall deem
appropriate, other than as limited pursuant to the terms of this Agreement, to
any distributors, outlets, or ultimate users, outside of the designated
exclusive territory.

ARTICLE III: PARTIES' PERFORMANCE

         A. ECO SOIL PERFORMANCE

         Section 1. RISK OF LOSS. Delivery shall occur and risk of loss shall
pass to SELLER when the Products are received at SELLER'S warehouse location
(FOB Destination).

         Section 2. MEETS SPECIFICATIONS. ECO SOIL warrants that the Product
complies in all respects with the specifications, or amendments thereto, at the
time of each such delivery and is subject to the established warranty on the
Products. ECO SOIL shall not be liable to SELLER for any consequential damages
or for loss, damage or expense directly or indirectly arising from the use of
Product, or from any other cause. ECO SOIL shall provide SELLER with proof of
product liability, with limits acceptable to SELLER, which names SELLER as a
covered party. ECO SOIL specifically disclaims any liability for Products
altered in any way after leaving its control.

         Section 3. PRODUCT AVAILIBILITY. ECO SOIL agrees to maintain sufficient
inventories and sources of supply of the Products to satisfy SELLER'S product
delivery requirements. If ECO SOIL is unable to satisfy SELLER'S product
delivery requirements, as a result of vendor credit restrictions, poor vendor
relationships or any other reason, then ECO SOIL will allow SELLER to source
similar products from other suppliers.

         Section 4. SALES PROTECTION. ECO SOIL agrees that it will not enter
into any exclusive distribution arrangement with any other distributor or dealer
and further agrees not to enter into any arrangement with any other distributor
or dealer in the designated territory for the Products during the Term of this
Agreement, without SELLER'S prior approval (which shall not be unreasonably
withheld), provided SELLER is in full compliance with the terms and obligations
herein appertaining.

                                                                               2
<PAGE>

         Section 5. TRAINING AND SUPPORT. ECO SOIL agrees to supply all training
and support necessary to SELLER to effectively sell and service the equipment in
SELLER'S designated territory, and will have the right to train the sales force
on ECO SOIL'S product lines for no less than ten (10) business days per year.
Seller will also encourage ECO SOIL personnel ride-along's with SELLER'S sales
force. SELLER shall complete all ECO SOIL provided training programs, and shall
develop a working knowledge of all written materials provided by ECO SOIL, and
ECO SOIL, in its sole discretion, shall determine what is necessary for SELLER
to demonstrate and market the Proprietary Products effectively and efficiently
to customers.

         B. SELLER'S PERFORMANCE

         Section 1. SALES. In consideration of its appointment herein, SELLER
agrees that it will use commercially reasonable efforts to promote demand for,
and sales of, Products, that it will maintain an adequate inventory of products,
and will provide monthly progress reports.

         Section 2. PURCHASE ORDER AND QUOTAS. SELLER agrees that to maintain
the exclusivity of this agreement it will provide Seller with a Purchase Order
for $4.9 million at Wholesale Price, of Fresh Pack product to be delivered to
Turf Partner locations over a 24-month period commencing on the Closing Date as
defined by the First Amendment to Amended and Restated Asset Purchase Agreement
dated June 9, 2000, in the form attached hereto as Appendix C. Seller further
agrees to bi-yearly quotas for other proprietary products based upon prior sales
history. If the quotas are not achieved, SELLER may lose its exclusivity or
license to sell ECO SOIL Products.

         Section 3. SALES RESTRICTIONS. SELLER understands and agrees that it is
expressly prohibited from selling to, offering to sell to, or soliciting sales
from anyone outside the Territory.

         Section 4. OTHER RESPONSIBILITIES.

                  a.       Periodic and timely progress reports (at least
                           monthly) concerning new business prospects, potential
                           orders.

                  b.       During the term of this agreement, the SELLER agrees
                           not to offer representation to other manufacturers of
                           competitive equipment, or offer for sale other
                           competitive products.

                  c.       The SELLER shall not sell or transport ECO SOIL'S
                           Product out of the assigned territory without express
                           (prior) written approval.

                  d.       SELLER shall provide adequate space in their
                           warehouses for necessary ECO SOIL equipment and
                           parts.

                                                                               3
<PAGE>

                  e.       SELLER shall not transmit, sell, convey, disclose, or
                           allow to be disclosed ECO SOIL'S prices provided to
                           SELLER in connection with this Agreement to anyone
                           other than its employees who have a need to know such
                           prices in connection with this Agreement, and SELLER
                           shall require its employees to comply with this
                           obligation and shall be responsible to ECO SOIL for
                           any breach or noncompliance by such employees.

                  f.       ECO SOIL may provide to SELLER, at its sole
                           discretion, marketing materials regarding ECO SOIL'S
                           Products. SELLER shall not alter or modify such
                           marketing materials in any manner whatsoever. SELLER
                           hereby acknowledges that ECO SOIL has claimed, or may
                           claim, sole and exclusive copyright protection with
                           respect to such marketing materials, and SELLER shall
                           take no action or make no omission which is in any
                           way inconsistent with ECO SOIL'S claim of copyright
                           protection with respect to such items.

                  g.       ECO SOIL shall have the right to review and approve,
                           in its sole discretion, any and all marketing and
                           other materials used by SELLER regarding the
                           promotion, marketing and / or resale of any ECO SOIL
                           products.

                  h.       SELLER shall obtain, retain and provide to ECO SOIL,
                           upon ECO SOIL'S request, any market data and customer
                           information that ECO SOIL determines is reasonably
                           required to conduct its business.

         Section 6. ASSIGNMENT AND DELEGATION. Any transfer or assignment of the
rights of SELLER under this agreement shall be null and void unless approved, in
writing, by ECO SOIL, prior to such transfer or assignment.

         C. MUTUAL PERFORMANCE

         Section 1. NON-DISCLOSURE. Each party, recognizing that it or its
agents or employees may obtain knowledge of confidential matters, trade secrets,
and techniques or other expertise developed by the other, agrees that it will
take all reasonable steps, at its sole expense, to protect said confidential
information, and that no party will divulge said confidential information at any
time, unless required by order of court, other than disclosures contemplated by
the terms of this Agreement, without prior written consent of the other party.

         Section 2. RESULTS. Each party agrees to promptly make available to one
another any and all results in development and experimentation with the Products
and further agrees not to publish the other party's results without first having
obtained written approval of the party providing the results, which shall not be
unreasonably withheld.

                                                                               4
<PAGE>

         Section 3. REPRESENTATIVE OF WARRANTIES. Each of the parties hereto
represents and warrants as follows:

                  a.       It is duly organized and existing and in good
                           standing under the applicable law and has the
                           requisite authority to carry on its business as
                           presently conducted.

                  b.       It has all requisite legal and corporate power to
                           execute and deliver this Agreement and to carry out
                           and perform its obligations under the terms of this
                           Agreement, including all appendices hereto.

                  c.       All corporate actions on the part of the party, its
                           directors, stockholders or partners necessary for
                           performance of its obligations hereunder, have been
                           duly and validly taken.

                  d.       This Agreement constitutes a valid and binding
                           obligation, enforceable in accordance with its terms,
                           as to the party.

                  e.       It is not, and will not, by entering into and
                           performing this Agreement and the obligations
                           contemplated herein, be in violation of any term of
                           its charter documents, or in any material respect be
                           in violation of or in default as to any other
                           agreement, judgment or decree by which it is bound,
                           and to the best of its knowledge is not, and will not
                           by entering into and performing this Agreement, be in
                           violation of any applicable order, statute, rule or
                           regulation.

         ARTICLE IV: COST AND PAYMENT TERMS.

         Section 1. PRICES. All retail prices shall be as set forth in Appendix
A, which is attached hereto and incorporated herein by this reference. No prices
shall be changed except upon thirty (30) days written notice, and shall be
effective only for orders received after said thirty (30) day period. Wholesale
price to SELLER will be at 70% of retail price (Wholesale Price) and SELLER
commits to pay 10% of retail price to sales force in the form of sales
commissions.

         Section 2. PAYMENT.

                    a.     All payments to ECO SOIL shall be in U.S. dollars,
                           payable 30 days from date of invoice or shipment,
                           whichever occurs later, or in such other form of
                           payment as may be agreed to from time to time by the
                           parties. Finance terms, extended dating, payment
                           incentive, etc., may be issued from time to time from
                           ECO SOIL.

                    b.     SELLER shall place orders with ECO SOIL in writing
                           (including electronic mail or fax) with reasonable
                           lead times

                                                                               5
<PAGE>

                           necessary to facilitate manufacture and shipping, and
                           no shipments shall be made except upon a specific
                           SELLER purchase order.

         Section 3. FORECASTS. To assist ECO SOIL in efficiently scheduling its
manufacturing, at least thirty (30) days prior to the start of each calendar
quarter, SELLER shall provide ECO SOIL a good faith quarterly forecast of
Products anticipated to be purchased. For the period commencing 7/1/2000, and
ending 12/31/2000, however, the forecasts shall be provided monthly.

         Section 4. CREDIT. SELLER'S credit shall be subject to ECO SOIL'S
continuing approval. In the event that SELLER should be delinquent in the
payment terms set forth herein, or otherwise negotiated, ECO SOIL may thereupon
demand advance payment, satisfactory security, or an acceptable guarantee for
prompt payment from SELLER, or in addition to all of the above remedies, or
following notice to SELLER and a period of sixty days for SELLER to remedy
delinquencies, or elect to unilaterally rescind this Agreement.

         Section 5. GENERAL TERMS AND CONDITIONS. Notwithstanding any terms and
conditions that may appear on or be contained in SELLER'S purchase orders or
other documents of SELLER, all purchases hereunder shall be governed by the
terms and conditions so contained in contravention hereof, shall not be deemed
applicable.

         Section 6. RETURNS. Unless ECO SOIL shall have authorized or permitted
the return of any Products, ECO SOIL shall not be obligated to accept from
SELLER any Products, nor to make any exchange or to credit SELLER therefore.

ARTICLE V: TERMINATION

         Section 1. DEFAULT. The parties recognize that prompt and full
compliance with the terms of this Agreement are essential, and the failure to
perform hereunder may be deemed a material breach of this Agreement creating in
the non-breaching party the right to treat the Agreement in default. Upon such
default and after sixty (60) days notice of default and the failure of the
defaulting party to remedy the default within such period, this Agreement may be
deemed terminated by the non-defaulting party, such party then having the right
to pursue such further remedies as it may deem appropriate, at law or otherwise.

In the event of termination, this Agreement shall remain applicable to any order
for Products which SELLER has previously placed and which have been accepted by
ECO SOIL. In the event of termination of this Agreement, SELLER shall promptly
return to ECO SOIL all samples, descriptive literature, or other materials
pertaining to Products, then remaining in its possession.

ARTICLE VI: MISCELLANEOUS PROVISIONS

                                                                               6
<PAGE>

         Section 1. NOTICES. Any and all notices provided herein shall be in
writing and delivered personally or sent by registered or certified mail with
return receipt requested, and confirmed by telegraph, telex, or fax to the other
party at the address herein above set forth, or at such other address as shall
be designated from time to time by the parties. Notice shall be deemed to be
effective upon personal service or transmittal of telegraph, telex or fax or
upon the date of receipt indicated on the postal proof of delivery, whichever
date is earlier.

         Section 2. AMENDMENTS. This instrument contains all of the agreements,
understanding, representations, conditions, warranties, and covenants made
between the parties hereto. Unless set forth herein, neither party shall be
liable for any representations made, and all modifications and amendments hereto
must be in writing and signed by both parties.

         Section 3. AUTHORITY TO ENTER INTO THE AGREEMENT. Each of the parties
represents that it has full power and authority to enter into this Agreement.

         Section 4. WAIVER. The failure of either party at any time to require
performance by the other party of any provision hereof shall not affect in any
way, the right to require such performance at any time thereafter. Nor shall a
waiver by either party of a breach of any provision hereof be taken or held to
be a waiver of the provision itself.

         Section 5. SEPARABILITY. Each of the terms of the Agreement is
exclusive and the invalidity of one or more terms shall not void or make
voidable any other terms of the Agreement.

         Section 6. COSTS OF DEFAULT. The parties agree that in the event of a
default of a term or condition of this Agreement. The defaulting party shall be
liable for reasonable attorney's fees and costs in the event of engagement of
legal counsel to represent the non-defaulting party's interest.

         Section 7. INTEGRATION. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understanding, negotiations
and discussions, whether oral or written, of the parties, and there are no
warranties, representations or agreements among the parties in connection with
the subject matter hereof except as set forth or referred to herein.

         Section 8. BINDING EFFECT AND ASSIGNMENT. This Agreement shall inure to
the benefit of and bind the parties' successors, assigns, transferees, and
representatives.

         Section 9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same document.

                                                                               7
<PAGE>

         Section 10. FORCE MAJEURE. The obligations of either party hereunder
shall be excused by reason of fire, explosion, or flood, or other actions of the
elements, strikes, labor disputes however caused, accidents, acts of public
enemies, lawful rules and regulations or orders of any court or any civil or
military authority, loss or shortage of raw materials, supplies, or energy
sources or failure of usual means of supply and any other causes beyond the
reasonable control of any of the parties. In the event that any of the parties
are prevented by any of the contingencies of the type set forth in this
subparagraph, said party shall be free of all liability, as would otherwise be
determined by the requirements of this Agreement, but only for so long as the
circumstances of force majeure exist. For any cause whatsoever, whether or not
beyond the control of ECO SOIL or SELLER, liability of either for failure or
delay in performance shall not include consequential damages.

         Section 11. DISCLAIMER OF AGENCY. This Agreement shall not constitute
either party the legal representative or agent of the other, nor shall either
party have the right or authority to assume, create, or incur any liability or
any obligation of any kind, express or implied, against or in the name of or on
behalf of the other party in any manner.

         Section 12. INTERPRETATION. The validity, interpretation, and
performance of this Agreement shall be controlled by and construed under the
laws of the state of California, U.S.A., the state in which this Agreement is
accepted.

         Section 13. ASSIGNMENT. The rights and obligations under this Agreement
may not be assigned by either party to any person, firm or corporation without
the prior written consent of the other party first obtained. Any attempted
assignment without such other party's consent shall be null and void. Except as
limited by the preceding sentence, this Agreement shall be binding upon and
inure to the benefit of the parties hereto, their successors and assigns.

         Section 14. HEADINGS. Paragraph headings are not to be considered part
of this Agreement and are included solely for convenience, and are not intended
to be full or accurate descriptions of the content thereof.

         Section 15. TIME OF ESSENCE. Time is of the essence in this Agreement,
and the failure of either party to promptly pay when due any and all payments,
or perform any and all obligations required herein, may be treated by the other
party as a material breach of this Agreement.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date above appearing.

J. R. SIMPLOT COMPANY
999 Main Street, Suite 1300                      By:  ________________________
Boise, Idaho 83702                               Its: ________________________

                                                                               8
<PAGE>

ECO SOIL SYSTEMS, INC.
10740 Thornmint Road                             By: ________________________
San Diego, CA  92127                            Its: ________________________

                                                                               9
<PAGE>

                              APPENDIX "A", PAGE 1

(To exclusive Distribution Agreement between Turf Partners / J. R. Simplot, and
Eco Soil Systems)

PRODUCTS

RECHARGE: 1 ACRE = $420.00, 3 ACRES = $840.00 (see wholesale price on pg. 3)
REOPEN: 1 ACRE = $420.00, 3 ACRES = $840.00 (see wholesale price on pg. 3)
REMOVE: 1 ACRE = $590.00, 3 ACRES = $1,180.00 (see wholesale price on pg. 3)
ROOT REVIVE: 1 ACRE $590.00, 3 ACRES - $1,180.00 (see wholesale price on pg. 3)
XPO: 1-2 ACRES $3,000.00 PER ACRE, 3+ ACRES $1,500.00 PER ACRE (see wholesale
     price on pg. 3)
DELIMINATE: $190.00 PER 2.5 GALLONS (wholesale $150.00)
ECO LEX: 2.5 GALLONS = $37.00 (wholesale $30.00), 55 GALLONS = $748.00
                       (wholesale $650.00)

ECO K+ 1-0-23, (2 X 2.5) SIZE 2.5 GALLONS: 1-4 CASES = 39.00, 5+ CASES = $37.00
(wholesale $28.00) ECO CALEX 1-0-0, 8% CA, (2 X 2.5) SIZE 2.5 GALLONS: 1-4 CASES
$45.00, 5+ CASES $40.00 (wholesale $33.00) ECO POWERMIX 45, 7-32-6, (2 X 2.5)
SIZE 2.5 GALLONS: 1-4 CASES $42.00,
 5+ CASES $40.00 (wholesale $32.00)
ECO MICRO MIX PLUS, 5-0-0, (2 X 2.5) SIZE 2.5 GALLONS: 1-4 CASES $39.00,
 5+ CASES $37.00 (wholesale $27.00)
ECO MAG, 0-0-0, (2 X 2.5) SIZE 2.5 GALLONS: 1-4 CASES $39.00, 5+ CASES $37.00
(wholesale $25.00)
ECO SIL, 0-0-2, SIZE 2.5 GALLONS: 1-4 CASES $39.00, 5+ CASES $37.00
(wholesale $30.00)

12-2-12, 50% SRN, SIZE 5 GALLONS: 1-4 CASES $63.50, 5+ CASES $60.00 (wholesale
$45.00) 12-2-12, 50% SRN, SIZE 30 GALLONS: 1-4 CASES $352.50 (wholesale $250.00)
18-3-6, 50% SRN, SIZE 5 GALLONS: 1-4 CASES $63.50, 5+ CASES $60.00 (wholesale
$45.00) 18-3-6, 50% SRN, SIZE 30 GALLONS: 1-4 CASES $352.50 (wholesale $250.00)
0-0-25, 17% S, SIZE 2.5 GALLONS: 1-4 CASES $27.00, 5+ CASES $26.25 (wholesale
$18.00) 0-0-25, 17% S, SIZE 30 GALLONS: 1-4 CASES $297.00 (wholesale $220.00)

CLEANRACK: $45,000.00
SOLUJECT: $14,500.00

                                                                              10
<PAGE>

CALJECT: $14,000.00
SMARTWASHER: $1,795.00 + $605.00 FOR OZZY JUICE

                              APPENDIX "A", PAGE 2

<TABLE>
<CAPTION>

COLORANTS:                                   SUGGESTED RETAIL          WHOLESALE
                                             ----------------          ---------
<S>                      <C>                 <C>                       <C>
T. P. Green              2.5 gal.                  70.50                  49.35
T. P. Darken             2.5 gal.                  75.00                  52.50
Accuracy                 gallon                    34.50                  24.15
Appearance               gallon                    37.25                  26.08
Appearance               whettable                149.00                 104.30

WETTING AGENTS:
Rely                     5 gal.                   295.00                 206.50
                         30 gal.                 1560.00                1092.00
                         40 lb. bag                65.00                  45.50

Rewet                    5 gal.                   176.25                 123.38
                         30 gal.                  945.00                 661.50
                         40 lb. bag                65.00                  45.50

Brilliance               5 gal.                   315.00                 220.50
                         30 gal.                 1770.00                1239.00

Syringe                  55 gal.                  770.00                 539.00

</TABLE>

SPECIALTY PRODUCTS:
2 Cycle Oil                         12 oz.              1.98              1.39
Nutra Wash Tank Cleaner             quart               8.00              5.60
T. P. Non-Ionic Surfactant                             16.00             11.20
Terminator Foam Suppressant         gallon             26.00             18.20
Ball Wash Concentrate               gallon             11.00              7.70

                                                                              11
<PAGE>

                              APPENDIX "A", PAGE 3

FRESHPACK WHOLESALE FEES:

RECHARGE: 1 ACRE = $294.00, 3 ACRES = $588.00

REOPEN: 1 ACRE = $294.00, 3 ACRES = $588.00

REMOVE: 1 ACRE = $413.00, 3 ACRES = $826.00

ROOT REVIVE: 1 ACRE $413.00, 3 ACRES - $826.00

XPO: 1-2 ACRES $2,100.00 PER ACRE, 3+ ACRES $1,050.00 PER ACRE

                                                                              12
<PAGE>

                         APPENDIX B
              TURF PARTNER WAREHOUSE FACILITIES

<TABLE>
<CAPTION>

          WAREHOUSE ADDRESS                            RADIUS OF SERVICE/MILES
          -----------------                            -----------------------
        <S>                                            <C>
        1 24800 N. Industrial Dr.
          Farmington Hills, MI                                   120
          ------------------------------------------------------------------------
        2 4867 and 4869 Duck Creek Rd
          Cincinnati, OH  45227                                  100
          ------------------------------------------------------------------------
        3 12840 Ford Dr.
          Fishers, IN                                            120
          ------------------------------------------------------------------------
        4 10103 Production Court
          Louisville, KY  40299                                  100
          ------------------------------------------------------------------------
        5 10730 Thornmint Rd.
          San Diego, CA                                          60
          ------------------------------------------------------------------------
        6 42-200 State Street, Ste. A
          Palm Desert, CA                                        50
          ------------------------------------------------------------------------
        7 4701 W. Jefferson Street
          Phoenix, AZ                                        State of AZ
          ------------------------------------------------------------------------
        8 2386 East Walnut Ave
          Fullerton, CA                                          60
          ------------------------------------------------------------------------
        9 15 Londonderry Rd.
          Londonderry, NH                                        125
          ------------------------------------------------------------------------
       10 2476 William Flynn Highway
          Butler, PA                                             100
          ------------------------------------------------------------------------
       11 3101-3109 Espresso Way
          York, PA                                               100
          ------------------------------------------------------------------------
       12 4300 Eubank Road
          Richmond, VA 23231                                     120
          ------------------------------------------------------------------------
       13 525 North Enterprise Dr.
          Aurora, IL  60506                                      120
          ------------------------------------------------------------------------
       14 851  47th Street
          Wyoming, MI                                            120
          ------------------------------------------------------------------------
       15 115 Railroad Street
          Warners, NY  13164                                     100
          ------------------------------------------------------------------------
       16 One Maple Terrace
          Three Rivers, MA 01080                       equipment storage only
          ------------------------------------------------------------------------
       17 94 Triangle Street
          Danbury, CT                                            100
          ------------------------------------------------------------------------
       18 914 Williams Ave.
          Grandview Heights, OH  43212                           100
          ------------------------------------------------------------------------
       19 2001-2019 County Road C-2
          Roseville, MN  55113                                   120
          ------------------------------------------------------------------------

</TABLE>

<PAGE>

                                 APPENDIX C

      ALL PURCHASE ORDERS ISSUED BY J. R. SIMPLOT COMPANY ("BUYER") TO THE
         UNDERSIGNED SELLER WILL BE SUBJECT TO THE FOLLOWING TERMS AND
       CONDITIONS WHICH MAY NOT BE VARIED OR ADDED TO EXCEPT BY A WRITING
                SIGNED BY BUYER'S DULY AUTHORIZED REPRESENTATIVE

1)       TIME IS OF THE ESSENCE - Time is of the essence of this contract.
         Delivery shall not be deemed to be completed until all goods have been
         actually received and accepted by Buyer, notwithstanding any agreement
         to pay freight, express or other transportation charges.

2)       SELLER'S REPRESENTATIONS AND WARRANTIES - Seller expressly warrants and
         represents as follows:

         a)       All goods covered by Purchase Orders are free of defects in
                  material and workmanship, conform to applicable
                  specifications, drawings, samples and descriptions, are of
                  merchantable quality and are suitable for Buyer's intended
                  purposes.

         b)       The goods covered by the Purchase Orders are owned by the
                  Seller and will be delivered free and clear of all claims,
                  liens, encumbrances and penalties.

         c)       No part of the goods covered by Purchase Orders are subject to
                  any actual or claimed trademark, patent or copyright
                  infringement.

         d)       All goods, wrappers and containers covered by Purchase Orders
                  shall bear markers and labels and be manufactured and
                  distributed in compliance with the following:

                  i)       all applicable United States federal, state and
                           municipal laws, rules and regulations, including
                           without limitation the Fair Labor Standards Act, the
                           Federal Food, Drug and Cosmetic Act, the Fair
                           Purchase and Labeling Law, the Occupational Safety
                           and Health Act and the Toxic Substances Control Act;

                  ii)      all applicable Canadian federal, provincial and
                           municipal laws, rules and regulations, including
                           without limitation the Employments Standards Act, the
                           Federal Food and Drug Act, the Environmental Act or
                           such similar legislation.

         e)       Equal Employment Clause - If applicable to Seller, Seller
                  guarantees compliance with the provisions of Executive Order
                  11246 of the United States of America pertaining to
                  nondiscrimination in employment. Under Section 203: Paragraphs
                  A and B, of the Executive Order, Seller agreed to file
                  compliance reports with the appropriate federal agency, and on
                  request to supply Buyer with copies of the compliance reports
                  and any other information necessary to demonstrate compliance.
                  Seller also guarantees compliance with Section 503 of the
                  Rehabilitation Act of 1973 relating to employment of the
                  handicapped, and the rules, regulations and relevant orders of
                  the Secretary of Labor issued pursuant to the Act. Seller
                  shall also comply with the Veterans Era Vietnam Readjustment
                  Act of 1974, as amended, and if applicable, Seller shall take
                  all required affirmative action on behalf of disabled veterans
                  and veterans of the Vietnam Era to employ and advance in
                  employment these qualified veterans. If applicable to Seller,
                  Seller guarantees compliance with all provisions of the Human
                  Rights Legislation pertaining to nondiscrimination in
                  employment.

                                                                              13
<PAGE>

                  The foregoing warranties and representations shall survive
                  Buyer's acceptance of and payment for the goods covered by
                  Purchase Orders.

3)       BUYER'S RIGHT TO REFUSE GOODS - Buyer reserves the right to refuse any
         goods and to cancel all or any part of the outstanding order if there
         is a material adverse market event that affects the commercial
         viability of the product.

4)       INDEMNIFICATION - Seller agrees to indemnify, defend and hold Buyer,
         its officers, agents and employees, harmless from any and all
         liability, loss, damage or expense which Buyer may suffer as a result
         of claims, demands, costs or judgments against it involving Seller's
         activities related to Purchase Orders or any failure by Seller to
         comply strictly with the warranties stated in Section 2 above or
         otherwise to fully and timely discharge its obligations under the
         Purchase Orders. This indemnity shall include the expense of any
         defense, including attorney's fees, and shall be in addition to any
         other remedies provided by law.

5)       ENTIRE AGREEMENT - The Purchase Orders and these terms and conditions
         contain the entire agreement of the parties. They may not be modified
         or terminated orally, and no claimed modification, termination or
         waiver shall be binding on Buyer unless in writing signed by a duly
         authorized representative of Buyer. NO MODIFICATION OR WAIVER SHALL BE
         DEEMED EFFECTED BY SELLER'S ACKNOWLEDGMENT OR CONFIRMATION CONTAINING
         OTHER OR DIFFERENT TERMS.

6)       PACKING - Unless otherwise specified, (i) all packing and crating by
         Seller shall be in compliance with carriers' tariffs and in suitable
         containers for protection in shipment and storage, and (ii) the price
         or prices shall include all charges for Seller's packing, crating,
         transportation, and insurance to Buyer's point of delivery.

7)       CHANGES - Buyer may at any time by written notice and without notice to
         sureties or assignees make changes within the general scope of a
         Purchase Order in any one or more of the following: (i) drawings,
         designs, or specifications; (ii) method of shipping or packing; (iii)
         place of inspection, acceptance, or point of delivery; and (iv)
         delivery schedule. Should any such change increase or decrease the cost
         of, or the time required for the performance of a Purchase Order, an
         equitable adjustment may be requested by Seller or Buyer in the price,
         delivery schedule or both. Seller shall submit any claim for such
         adjustment in writing to Buyer within thirty (30) days from the date of
         such change. Nothing contained in this clause shall relieve Seller from
         proceeding without delay in the performance of Purchase Orders as
         changed.

8)       CONFIDENTIALITY OF BUYER'S DATA - Seller shall not, without prior
         written consent of Buyer, use or disclose any data, designs or other
         information belonging to or supplied by or on behalf of Buyer, except
         in the performance of orders for Buyer. Upon Buyer's request, such
         data, designs or other information and any copies thereof shall be
         returned to Buyer. Where Buyer's data, designs or other information are
         furnished to Seller's suppliers for procurement of supplies by Seller
         for use in performance of Buyer's orders, Seller shall insert the
         substance of this provision in its orders.

9)       TERMINATION

For Seller's Failure to Perform. Buyer may terminate a Purchase Order, in whole
or in part, without liability to Seller; (i) if deliveries are not made at the
time or in the quantities specified (whether for force majeure reasons or
otherwise); (ii) in the event of a breach of any of the other terms or
conditions hereof; (iii) in the event Seller becomes insolvent, or makes a
general

                                                                              14
<PAGE>

assignment for the benefit of creditors, or files or has filed against it a
petition in bankruptcy or for reorganization, or pursues any other remedy under
any other law relating to the relief of debtors, or in the event a receiver is
appointed for Seller's property or business.

         b) Right to Audit. Buyer shall have the right to audit all elements of
         any termination claim and Seller shall make available to Buyer on
         request all books, records and papers relating thereto at Buyer's
         offices at Buyer's option.

         c) Force Majeure. Neither party shall be liable to the other (i) for
         defaults due to causes beyond its control and without its fault or
         negligence, including acts of God, government priorities, fires,
         strikes, lockouts, floods, epidemics, riots, wars, power shortages,
         embargoes, delays in transportation or car shortages, or (ii) because
         of the inability due to causes beyond its control and without its
         negligence to obtain necessary labor, materials, or components.
         Notwithstanding the foregoing, if Seller's default is caused by the
         default of a subcontractor or supplier, such default by Seller shall
         not be excusable under this Article unless it arises out of causes
         beyond the control of both Seller and the subcontractor or supplier and
         without the fault by the negligence of either of them, and the supplies
         or services to be furnished by the subcontractor or supplier are not
         obtainable from other sources in sufficient time to permit Seller to
         meet the required delivery schedule.

10)      DEFAULT - In the event Seller defaults in the performance of any term
         of this agreement, Buyer shall have all rights and remedies available
         at law or in equity.

11)      CHOICE OF LAW; DISPUTE RESOLUTION - This agreement shall be governed by
         and interpreted in accordance with the substantive laws of the State of
         Idaho without regard to conflicts of law rules or principles and
         excluding the U.N. Convention on the International Sale of Goods. The
         parties agree that any dispute under a Purchase Order entered into
         hereunder shall be resolved by binding arbitration pursuant to the
         Uniform Arbitration Act as enacted in Idaho, Idaho Code Sections 7-901
         et. seq.. The place of arbitration shall be Boise, Idaho. The
         arbitration shall be conducted in accordance with the Commercial
         Arbitration Rules of the American Arbitration Association before a
         single arbitrator appointed in accordance with such rules. The
         arbitrator shall be appointed within thirty (30) days following one
         party's demand for arbitration, and the arbitration shall commence
         within thirty (30) days following appointment of the arbitrator. The
         arbitrator shall be empowered to award actual damages only, not
         punitive damages. Judgment on the award rendered by the arbitrator may
         be entered in any court having jurisdiction thereof. Each party shall
         bear its own costs and fees in the arbitration and one-half of the
         arbitrators' costs and fees. The foregoing provision shall not bar
         either party from seeking injunctive relief from a court of competent
         jurisdiction pending arbitration or disposition of the arbitration
         proceeding.

12)      ADDITIONAL CONDITIONS -

                  -        Products to meet Buyer's supplied requirements.

                  -        Product must be slipsheeted and shrink wrapped.

                  -        No product, component, or ingredient with a foreign
                           country origin to be used without prior approval from
                           the Buyer.

                  -        Product must meet all requirements of the United
                           States Federal Environmental Protection Act and
                           amendments thereto, as applicable, including those
                           related to pesticide and chemical residues.

                                                                              15
<PAGE>

                  -        Sample and grading to be supplied to Buyer as
                           requested.

13)      NOTICES - All notices or communications between Buyer and Seller with
         respect to a Purchase Order that are required or allowed hereunder
         shall be sent via facsimile or overnight courier service (shipping
         charges prepaid) to Buyer at the "Ship To" address identified in the
         Purchase Order in question and the Seller's "To" address identified in
         the Purchase Order in question.

14)      TERMS - These Terms and Conditions shall remain in effect until amended
         by Buyer at any time by notice to Seller, which amended Terms and
         Conditions shall become effective as to all Purchase Orders sent to
         Seller subsequent to the date of such notice.

15)      PROHIBITION ON ASSIGNMENT - Seller's rights and obligations hereunder
         shall not be assignable (whether by sale, merger, consolidation or
         otherwise) without Buyer's prior written consent which may be withheld
         for any reason.

         J. R. SIMPLOT COMPANY

         By  _________________________________________________________

         Its _________________________________________________________

         AGREED AND ACCEPTED BY:

         SELLER'S COMPANY NAME _______________________________________

         STREET ADDRESS ______________________________________________

         CITY _______________________________  STATE/PROVINCE ________

         ZIP CODE/AREA CODE _________________  COUNTRY _______________

         COMPANY REPRESENTATIVE ______________________________________

         TITLE _______________________________________________________

         SIGNATURE ____________________________________ DATE _________

                                                                              16<PAGE>
                                                                  EXHIBIT 10.1

                              ELGAR HOLDINGS, INC.
                             1998 STOCK OPTION PLAN
                              AMENDED AND RESTATED
                                      AS OF
                                 AUGUST 1, 2000

1.       PURPOSE. This Stock Option Plan (the "Plan") is intended as an
tincentive to encourage stock ownership by officers and directors and
executive and professional employees of Elgar Holdings, Inc. (the "Company")
and its Parent and Subsidiary corporations so that they may acquire or
increase their equity interest in the success of the Company and its Parents
and Subsidiaries, and to encourage them to remain in the service of the
Company or of its Parents or Subsidiaries. Each option granted under this
Plan will be designated as either an "Incentive Stock Option" or a
"Nonqualified Stock Option." It is intended that each option designated as an
Incentive Stock Option granted under this Plan will qualify as an incentive
stock option within the meaning of Section 422(b) of the Code.

2.       DEFINITIONS

         2.1      "BOARD OF DIRECTORS" means the board of directors of the
Company.

         2.2      "CHANGE IN CONTROL" shall mean the happening of any of the
following:

         2.2.1    any person who is not a stockholder of the Company or of
any Parent on the date of adoption of this Plan (or group of such persons
acting in concert) acquires, during any period of twelve consecutive calendar
months, stock of the Company or of a Parent representing a majority of the
voting power of all stock of the Company or any Parent having the right to
vote for the election of directors;

         2.2.2    the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than eighty percent (80%) of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a Recapitalization of the Company;

         2.2.3    the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 2

Company's assets or any transaction having a similar effect; or

         2.2.4    if the Company enters into an agreement with an unrelated
party for the sale of all or substantially all of the assets or outstanding
stock of a Subsidiary (or a transaction having a similar effect), or any
other event occurs by reason of which a Subsidiary ceases to be a Subsidiary
of the Company, a Change in Control shall be deemed to have occurred with
respect to those Employees who are then employed by such Subsidiary.

         2.3      "CHANGE IN CONTROL DATE" shall mean the earliest date on
which one of the events described in the definition of "Change in Control"
occurs, as determined by the Board of Directors, in its sole discretion,
provided that, if Section 2.2.4 of the definition of "Change of Control"
applies, the Change in Control Date shall be deemed to be the date of the
agreement, provided that the transaction does close.

         2.4      "CHANGE IN CONTROL PRICE" shall mean the highest fair
market value, or the highest price paid or offered in any bona fide
transaction related to a Change in Control of the Company, at any time during
the sixty (60) days preceding the Change in Control Date.

         2.5      "CODE" means the Internal Revenue Code of 1986, as amended.

         2.6      "COMPANY" means Elgar Holdings, Inc., a Delaware
corporation.

         2.7      "EMPLOYEE" means any bona fide full or part time common law
employee of the Company or of any Parent or Subsidiary of the Company.

         2.8      "INCENTIVE STOCK OPTION" means an Option granted pursuant
to this Plan intended to qualify and designated as an incentive stock option
within the meaning of Section 422 of the Code.

         2.9      "NONQUALIFIED STOCK OPTION" means any Option granted
pursuant to this Plan other than an Incentive Stock Option.

         2.10     "OPTION" or "STOCK OPTION" means any stock option granted
pursuant to this Plan.

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 3

         2.11     "OPTIONEE" means any individual to whom an Option is granted
pursuant to this Plan.

         2.12     "PARENT" means, at the time of granting any Option, any
corporation (other than the Company) in an unbroken chain of corporations ending
with the Company if each of the corporations other than the Company owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

         2.13     "PLAN" means the Elgar Holdings, Inc. 1998 Stock Option Plan.

         2.14     "RECAPITALIZATION" means any reorganization, merger or other
subdivision, consolidation, recapitalization, reclassification, stock split,
combination of shares, issuance of warrants, stock dividend or similar event
with respect to or affecting the common stock of the Company, par value one cent
($.01) per share.

         2.15     "STOCK OPTION COMMITTEE" means the committee appointed to
administer the Plan pursuant to Article 7 herein, if such committee is
appointed.

         2.16     "SUBSIDIARY" means, at the time of granting any Option, any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         2.17     "TEN PERCENT SHAREHOLDER" means any person who owns (or is
considered by reason of Section 425(d) of the Code to own) stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any Parent or Subsidiary of the Company.

3.       ELIGIBILITY. The persons who shall be eligible to receive Options shall
be such officers, directors and executive and professional employees of the
Company or its Parent or Subsidiary corporations as the Board of Directors shall
select from time to time. An Optionee may hold more than one Option, but only on
the terms and subject to the restrictions hereafter set forth.

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 4

4.       STOCK. The stock subject to the Options shall be shares of the
Company's authorized but unissued or reacquired common stock, par value one cent
($.01) per share, hereafter sometimes called Stock. The aggregate number of
shares which may be issued under Options shall not exceed one million one
hundred sixty-four thousand and eighty-two (1,164,082) shares of Stock. The
limitation established by the preceding sentence shall be subject to adjustment
as provided in Section 5.12 of the Plan. If any outstanding Option for any
reason expires or is terminated, the shares of Stock allocable to the
unexercised portion of such Option may again be subjected to an Option under the
Plan.

5.       TERMS AND CONDITIONS

         5.1      OPTION AGREEMENT. Stock Options granted pursuant to the Plan
shall be authorized by the Board of Directors and shall be evidenced by
agreements in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the terms and
conditions set forth in this Article 5. The agreements shall not impose upon the
Company or its Parents or Subsidiaries any obligation to retain the Optionee in
their employ for any period.

         5.2      NUMBER OF SHARES. Each Option shall state the number of shares
of Stock to which it pertains.

         5.3      OPTION PRICE. Each Option shall state the option price, which
in the case of an Incentive Stock Option shall be not less than (i) one hundred
percent (100%) of the fair market value of the shares of Stock on the date of
the granting of the Option if the Optionee is not a Ten Percent Shareholder, or
(ii) one hundred ten percent (110%) of the fair market value of the shares of
Stock on the date of the granting of the Option if the Optionee is a Ten Percent
Shareholder. The fair market value of the shares of Stock shall be determined
pursuant to Section 7.2.

         5.4      MEDIUM AND TIME OF PAYMENT. The option price shall be payable
upon the exercise of the Option and may be paid in cash or by good check. At the
sole option of the Company, if approved by the Board of Directors, a portion of
the purchase price may be paid by delivery of shares of Stock previously owned
by the Optionee, duly endorsed for transfer to the Company, with a fair market
value (as determined by the Board of Directors) on the date of delivery equal to
the option price, or by delivery of a recourse promissory note bearing interest
at such rate, on such other terms and in form and with security satisfactory to
the

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 5

Company, or any combination of the foregoing approved by the Board of
Directors. Exercise of an Option shall not be effective until the Company has
received written notice of exercise, specifying the number of whole and
fractional shares of Stock to be purchased, accompanied by payment in full of
the aggregate option price of the number of shares purchased.

         5.5      TERM OF OPTIONS. Each Option, by its terms, shall not be
exercisable after the expiration of ten years from the date the Option is
granted, provided, however, that any Incentive Stock Option granted to a Ten
Percent Shareholder, by its terms, shall not be exercisable after the expiration
of five years from the date the Option is granted. Any Option may provide that
it will expire within a shorter period than the maximum permitted hereby.

         5.6      INSTALLMENTS. Each Option shall be exercisable on such dates
and in such amounts (subject to the other provisions hereof) as shall be
determined by the Board of Directors. It is not required that each Option have
the same installment provisions. In its sole discretion, the Board of Directors
may accelerate the exercise date of part or all of any Option.

         5.7      TRANSFERABILITY. Each Option, by its terms, shall not be
transferable by the individual to whom granted otherwise than by will or the
laws of descent and distribution, and shall be exercisable, during the
Optionee's lifetime, only by the Optionee.

         5.8      LIMITS ON EXERCISE. Each Option shall be subject to the
requirement that, if at any time the Board of Directors, in its discretion,
shall determine that the listing, registration, or qualification of the shares
subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such Option, or the issue or purchase of shares thereunder, such Option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors.

         5.9      LIMIT ON OPTIONS. An Option shall not be an Incentive Stock
Option to the extent that the aggregate fair market value of stock with respect
to which such Option is exercisable for the first time by any individual during
any calendar year (taking into account all Incentive Stock Options
simultaneously or previously granted under all stock option plans

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 6

of the Company and its Parents and Subsidiaries) exceeds One Hundred Thousand
Dollars ($100,000).

         5.10     TERMINATION OF EMPLOYMENT. Each Option by its terms shall not
be exercisable after thirty (30) days after the termination of employment of the
individual to whom the Option was granted, unless such termination was a result
of the death or disability of the employee, and may provide that it shall not be
exercisable after the date of termination of employment of the individual to
whom the Option was granted.

         5.11     EXPIRATION OF PLAN. No Option shall be granted under this Plan
more than ten years from the date on which this Plan was adopted or approved by
the stockholders of the Company, whichever is earlier. No Option granted under
this Plan shall be valid unless the Plan is approved by the stockholders of the
Company within twelve (12) months before or after its adoption by the Board of
Directors.

         5.12     RECAPITALIZATION. Upon any Recapitalization, the Board of
Directors shall make an appropriate and equitable adjustment in the number and
kind of securities with respect to which rights may be granted under this Plan
and the price at which such securities may be purchased, and an appropriate and
equitable adjustment in the number and kind of securities that may be purchased
under each outstanding Option and the price at which shares may be purchased
under each such Option.

         The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Company to make or authorize any adjustments,
recapitalizations, reorganizations, or other changes in the Company's capital
structure or business, any merger or consolidation, any issuance of bonds,
debentures, preferred shares or common shares, the dissolution or liquidation of
the Company, any sale or transfer of all or any part of the Company's assets or
business, or any other act, whether or not similar to the events described
above.

         5.13     RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an
Option shall have no rights as a stockholder with respect to any shares covered
by the Option until the date of the issuance of a stock certificate for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 5.12 hereof.

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 7

         5.14     MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
terms and conditions and within the limitations of the Plan, the Board of
Directors may modify, extend or renew outstanding Options granted under the
Plan, or accept the surrender of outstanding Options (to the extent not
theretofore exercised) and authorize the granting of new Options in substitution
therefor (to the extent not theretofore exercised). Notwithstanding the
foregoing, no modification of an Option shall, without the consent of the
Optionee, alter or impair any rights or obligations under any Option theretofore
granted under the Plan.

         5.15     INVESTMENT PURPOSE. Each Option under the Plan shall be
granted on the condition that the purchases of stock thereunder shall be for
investment purposes, and not with a view to resale or distribution unless the
stock subject to such Option is registered under the Securities Act of 1933, as
amended, and any applicable state securities laws, or a resale of such stock
without such registration would otherwise be permissible. Each person exercising
an Option must represent that such condition is fulfilled, unless in the opinion
of counsel for the Company such condition is not required under the Securities
Act of 1933 or any other applicable law, regulation, or rule of any governmental
agency.

         5.16     WITHHOLDING TAXES. Whenever under the Plan shares are to be
issued or cash is to be paid in satisfaction of Options, the Company shall have
the right to require the recipient to remit to the Company an amount sufficient
to satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares or payment of such
cash.

         5.17     TERMINATION OF OPTIONS. Each Option, by its terms, shall
reserve to the Company the right to terminate the Option, in connection with a
Change in Control for a payment in cash equal to the difference between the
exercise price for the shares of Stock subject to the Option and the Change in
Control Price of such Stock.

         5.18     OTHER PROVISIONS. The Option agreements authorized under the
Plan shall contain such other provisions, including, without limitation, such
rights of redemption, purchase and first refusal, and such other restrictions
upon the exercise of Options or the transfer of the Stock issued upon exercise,
as the Board of Directors of the Company shall deem advisable. Any Incentive

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 8

Stock Option agreement shall contain such limitations and restrictions upon
the exercise of the Option as shall be necessary in order that such Option
will be an "Incentive Stock Option" as defined in Section 422 of the Code.

6.       EXERCISE OF OPTIONS

         6.1      STOCK TRANSFER BOOKS. Notwithstanding any other provision of
this Plan or of any Option, no stock shall be issued by the Company while its
stock transfer books are closed.

         6.2      SECURITIES LAWS. Notwithstanding any other provision of this
Plan or of any Option, no Option shall be exercisable, and no stock shall be
issued upon the exercise of any Option, if such exercise or such issuance of
stock would result in any violation of law or the imposition on the Company of a
requirement that it commence filing periodic reports under the Securities
Exchange Act of 1934 or any similar provision of law.

7.       ADMINISTRATION

         7.1      ADMINISTRATION BY BOARD OF DIRECTORS. The Plan shall be
administered by the Board of Directors. The interpretation and construction by
the Board of Directors of any provisions of the Plan or of any Option granted
under it shall be final. The Board of Directors shall have the authority to
appoint a Stock Option Committee to assume the duties and responsibilities of
administering the Plan. The Stock Option Committee, if such be established by
the Board of Directors, shall be composed of no less than three (3) persons (who
shall be members of the Board of Directors), each of whom shall be a
"disinterested person" as defined herein, and such Stock Option Committee shall
have the same power, authority and rights in the administration of the Plan as
the Board of Directors. No director shall be liable for any action or
determination made in good faith with respect to the Plan or any Option granted
under it.

         The Board of Directors shall determine from time to time the persons
who shall receive Options hereunder; provided, however, Options may be granted
hereunder only to persons who, at the time of the grant thereof, are officers,
directors or key employees of the Company and its Parents and Subsidiaries,
except as otherwise provided in this Plan; provided, further, that any decision
to award Options hereunder to any person or the determination of the maximum
number of shares of Stock (as hereinafter defined) which may be subject to
Options granted to

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 9

any such director, employee or officer shall be made by either (i) the Board
of Directors, all of the directors of which and all of the directors acting
in such matter shall be disinterested persons as defined herein, or (ii) the
Stock Option Committee appointed by the Board of Directors pursuant to this
section. For purposes of this Plan, "disinterested person" shall mean a
director who is not, during the one year prior to service as an administrator
of the Plan, or during such service, granted or awarded equity securities
pursuant to the Plan or any other plan of the Company or any of its Parents
or Subsidiaries entitling the participants therein to acquire stock, stock
options or stock appreciation rights of the Company or any of its Parents or
Subsidiaries.

         7.2      DETERMINATION OF FAIR MARKET VALUE. For the purpose of
granting Incentive Stock Options, the Board of Directors shall determine the
fair market value of the Stock of the Company as follows:

                  7.2.1    If the Company's Stock is traded on any recognized
stock exchange or exchanges, such fair market value shall be deemed to be the
highest closing price of the Stock on such stock exchange or exchanges on the
day the Option is granted or if no sale of the Company's Stock shall have been
made on any stock exchange on that day, on the next preceding day on which there
was a sale of such stock.

                  7.2.2    During such time as the Stock is not listed on an
established exchange, but is actively traded on the over-the-counter market, the
fair market value per share shall be the mean between dealer "bid" and "ask"
prices of the Stock in the over-the-counter market on the day the Option is
granted, as reported by the National Association of Securities Dealers, Inc.

                  7.2.3    During such time as the Company's Stock is neither
listed on any recognized exchange nor actively traded over-the-counter, the fair
market value shall be determined in good faith by the Board of Directors. In
making such determination, the Board of Directors may (but shall not be required
to) rely on the opinions of one or more qualified, independent appraisers.

         7.3      INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as directors or as members of the Stock Option
Committee, the members of the Board of Directors shall be indemnified by the
Company against the reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any action, suit or

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 10

proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such Board or Stock Option Committee member is liable for
negligence or misconduct in the performance of his duties; provided that within
sixty (60) days after institution of any such action, suit or proceeding a Board
or Stock Option Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.

8.       AMENDMENT AND TERMINATION

         8.1      AMENDMENT. The Board of Directors of the Company may, insofar
as permitted by law, from time to time, with respect to any shares at the time
not subject to Options, suspend or discontinue the Plan or revise or amend it in
any respect whatsoever except that, without approval of the stockholders, no
such revision or amendment shall change the number of shares subject to the
Plan, change the designation of the class of employees eligible to receive
Options or decrease the price at which Incentive Stock Options may be granted,
materially increase the benefits accruing to participants under the Plan,
materially increase the number of securities which may be issued under the Plan,
or materially modify the requirements as to eligibility for participation in the
Plan.

9.       MISCELLANEOUS

         9.1      GOVERNING LAW. This Plan shall be governed by, and construed
in accordance with, the laws of the State of Delaware.

         9.2      CONSTRUCTION. In the event any parts of this Plan are found to
be void, the remaining provisions of this Plan shall nevertheless be binding
with the same effect as though the void parts were deleted.

         9.3      APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of Stock pursuant to Options will be used for general corporate
purposes.

<PAGE>

ELGAR HOLDINGS, INC.
1998 STOCK OPTION PLAN
AMENDED AND RESTATED
AS OF AUGUST 1, 2000
PAGE 11

         9.4      NO OBLIGATION TO EXERCISE OPTION. The grant of an Option shall
impose no obligation upon the Optionee to exercise such Option.

         9.5      APPROVAL OF STOCKHOLDERS. The Plan shall take effect
immediately upon adoption by the Board of Directors. However, if this Plan is
not approved by the stockholders of the Company within the period beginning
twelve (12) months before and ending twelve (12) months after the date the Plan
is adopted by the Board of Directors, no Options granted hereunder shall
constitute Incentive Stock Options.

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