Document:

Exhibit 4.22 - Filed by EDF Electronic Data Filing Inc. (604) 879.9956

Exhibit 4.22

Smartcool Systems Inc. 

Suite 1280 – 333 Seymour Street

Vancouver, British Columbia  

V6B 5A6 

Chris Lefaivre

#304-1975 Pine St.

Vancouver, B.C.

V6J 3E1

Employment Agreement

September 1st, 2006  "Personal & Confidential"

Dear Chris:

This letter will confirm the terms of your employment with Smartcool Systems Inc. ("Smartcool").  By signing this letter agreement (the "Agreement") you accept the following terms and conditions:

1.

Position, Job Description and Start Date

Your position will be VP Sales and you will report to the President and CEO.  

Your start date with Smartcool will be September 1st 2006.

2.

Wages or Salary

·

Salary:

Your salary will be $8,500.00 per month, less all statutory and other deductions required from time to time (the "Base Salary").  Your Base Salary will be paid in twice monthly instalments.

As a person whose principal employment responsibilities consist of supervising or directing human or other resources, and the application of specialized knowledge and professional judgment, you acknowledge that your Base Salary and other compensation as set out in this Agreement represents compensation for all hours worked by you in performance of your duties.  Accordingly no additional overtime wages or compensation will be paid to you.

·

Reimbursement of Business Expenses:

Smartcool will reimburse you for all reasonable and necessary travel and business expenses which will include reasonable but not limited to cell phone usage and parking incurred by you in the performance of your duties under this Agreement.  You will be required to account for such expenses by submitting a signed statement itemizing such expenses prepared in accordance with Smartcool's expense policy.

·

You will have an opportunity to earn an annual bonus in an amount to be determined by the President of Smartcool in his sole discretion.  The payment of such a bonus shall remain at Smartcool’s absolute discretion and can at any time be abolished for the current and/or for future years.  Payment of any bonus, in one or several years, shall not entitle you to a future bonus;

3.

Benefits

Smartcool will provide medical insurance (basic medical, extended medical and dental) for you.

The type of benefits, or the carrier providing those benefits, may change from time to time depending on the terms negotiated by Smartcool with its benefits carrier.  Deductions for your portion of the costs of any of the above benefits will be taken directly from your pay.

4.

Vacation

Your annual vacation entitlement in four weeks per year. 

All vacation entitlement must be taken in the year for which it is earned.  

All vacation shall be scheduled in consultation with the President of Smartcool.   Smartcool would appreciate at least 4 weeks notice of your intention to take a vacation, to ensure that other personnel can adequately cover your duties.  

5.

Confidentiality and Non-Solicitation

You acknowledge that you are employed in a senior capacity and that as such are at all times under a fiduciary obligation to act in the best interest of Smartcool. 

You also acknowledge that you have a duty to maintain in strict confidence all information acquired by you in the course of employment with Smartcool, which is not public knowledge.  Specifically you agree that "Confidential Information" shall include:

·

information regarding Smartcool’s business operations, methods and practices, including marketing strategies, product pricing, margins and hourly rates for staff, costs and all information regarding the financial affairs of Smartcool,

·

the names of Smartcool’s customers and clients, the names of the suppliers of products or services to Smartcool and the nature of Smartcool’s relationships with such customers, clients and suppliers, and

·

any other trade secret or confidential or proprietary information of Smartcool including, business plans, concepts, techniques, processes, designs, data, software programs, formulas, development or experimental work, work in process or other know-how;

You agree to never during the term of your employment or at any time thereafter:

·

to divulge Confidential Information to any third party without Smartcool’s express written consent;

·

to use Smartcool’s name or any Confidential Information to promote directly or indirectly the business of any third party;

You agree to return to Smartcool immediately on termination of your employment all of Smartcool’s property and any document containing Confidential Information in your possession.

You also agree that during the term of your employment with Smartcool, and for a period of 12 months immediately following your resignation or termination, you will not, directly or indirectly, solicit:

·

any current, or prospective Smartcool customer, client, supplier or any other person, firm or corporation in the habit of dealing with Smartcool, for the purpose of buying from, selling or supplying to such customer, client, supplier, person or firm any products or services which are competitive with Smartcool’s business; or

·

induce or attempt to induce any employee, or consultant of Smartcool to terminate their employment or consulting agreement with Smartcool.

6.

Termination of Employment

It is agreed that any termination of your employment shall occur on the following basis:

·

without notice by Smartcool if just cause for termination exists, or

·

you may resign on giving Smartcool four (4) weeks' written notice of the effective date of your resignation.  On receipt of your notice of resignation, Smartcool may elect to pay you four (4) weeks' Base Salary in lieu of notice, in which case your employment will terminate immediately upon receipt of such payment;

·

if your employment is terminated by Smartcool for any reason other than for just cause, Smartcool will provide you (at Smartcool's discretion) with either notice, or a severance payment in lieu of notice based on the total period of your employment with Smartcool, calculated in accordance with the following table:

		
	Period of Employment with Smartcool

	Total Notice OR Severance Payment

	Less than 1 year:

	3 months Base Salary in lieu of notice

	1 year  or More

	6 months 

The severance terms set out in the above table are inclusive of and not in addition to any compensation for length of service to which you may be entitled under any applicable employment standards legislation. All severance payments in lieu of notice, shall be calculated on the basis of your Base Salary at the time of your termination and shall be subject to usual and customary employee payroll practices and all applicable withholding requirements.  Except for the notice or severance payments set out in the above table you shall not be entitled to any further compensation, bonus, damages, restitution, relocation benefits, or other severance benefits upon termination of your employment and any amounts in excess of any statutory compensation due to you shall not be payable by Smartcool until you provide to Smartcool a signed Release of All Claims in a form prescribed by Smartcool.

7.

No Conflict with Prior Obligations

You hereby represent and warrant to Smartcool that you are not a party to any agreement, or otherwise bound by any duty to another party that may, in any way, restrict your right or ability to enter into this Agreement or perform your employment duties.  You further represent and warrant that in performing your employment duties under this Agreement you will not disclose or use any confidential information belonging to any prior employer or other persons or entities.

8.

Computer Access and E-Mail

You agree to comply with all reasonable rules and restrictions that Smartcool may impose on the use of computers, e-mail accounts and Internet access.  In particular:

·

Information stored or transmitted on Smartcool’s computers including E-mail is, and remains at all times, the property of Smartcool.  Smartcool reserves the right to access any such information.  As a result, you have no expectation of privacy with respect to this information.  

·

It is your responsibility to keep your password(s) secret. You may not share your passwords(s) with anyone, and you are responsible for all activity performed with your personal user ID or password.  

·

You are provided access to Smartcool’s computers and communications systems only to assist you in carrying out Smartcool’s business in an efficient manner.  Smartcool’s computer systems are not to be used to engage in any activities that are in violation of company policy.  Prohibited uses include, but are not limited to the downloading or distribution of chain letters, inappropriate humour, defamatory, obscene, offensive or harassing messages or files, and audio, video graphics or images of nudity or a sexual nature.

9.

Options

Smartcool will, subject to shareholder and director approval, grant options on 100,000 Smartcool shares at the closing price of the earliest date the Company is legally entitled to grant such options. 

10.

General

Should your position, compensation or benefits change over time, it is agreed that this Agreement shall be deemed to have been amended to incorporate such changes.  For greater certainty it is however confirmed that any changes to your position, compensation or benefits during your employment with Smartcool shall not affect in any way the continued validity of the Confidentiality, Non-Solicitation, and Termination provisions of this Agreement.

Please indicate your agreement with the terms and conditions of your employment with Smartcool as outlined in this Agreement by signing and returning a copy of this Agreement.

We hope you find that the above Agreement is to your satisfaction and we look forward to your contribution to our team.

Yours truly,

Smartcool Systems Inc. 

_________________________

ACCEPTED AND AGREED TO THIS __ DAY OF SEPTEMBER 2005.  I HAVE READ AND UNDERSTAND THE TERMS AND CONDITIONS OF EMPLOYMENT SET OUT IN THIS AGREEMENT.

_________________________

Signature of Employee 

______________________________________________________________________________

rbs.lawyers

700 - 401 West Georgia

Vancouver, B.C., V6B 5A

1-604-661-9208Exhibit 10.1 Stock Incentive Plan

    Exhibit
      10.1

     

    FREESTAR
      TECHNOLOGY CORPORATION 

     

    2007
      STOCK INCENTIVE PLAN

    
 

     

    1.     Purposes
      of the Plan.  
      The purposes of this Stock Incentive Plan are to attract and retain the best
      available personnel for positions of substantial responsibility, to provide
      additional incentive to Employees, Directors and Consultants of the Company
      and
      its Subsidiaries and to promote the success of the Company's business. To
      accomplish the foregoing, the Plan provides that the Company may grant Options
      and Shares of Common Stock (each as hereinafter defined). Options granted under
      the Plan may be incentive stock options (as defined under Section 422 of
      the Code) or nonstatutory stock options, as determined by the Administrator
      at
      the time of grant of an Option and subject to the applicable provisions of
      Section 422 of the Code, as amended, and the regulations promulgated
      thereunder. 

    

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

    

    (a)    "Administrator"
      means the Board or any of its Committees appointed pursuant to Section 4 of
      the Plan.

    

    (b)    "Applicable
      Laws" has the meaning set forth in Section 4(a) of the Plan. 

    

    (c)    "Award"
      means an award of Options or Shares (each as defined below). 

    

    (d)    "Board"
      means the Board of Directors of the Company. 

    

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

    

    (f)    "Committee"
      means a committee of Directors or of other individuals satisfying Applicable
      Laws appointed by the Board in accordance with Section 4 hereof. 

     
      

    (g)    "Common
      Stock" means the common stock of the Company. 

    

    (h)    "Company"
      means FreeStar Technology Corporation, a Nevada corporation. 

    

    (i)    "Consultant"
      means any person who is engaged by the Company, or any Parent or Subsidiary,
      to
      render services and is compensated for such services other than as an Employee.
      

    

    (j)    "Continuous
      Status" means the absence of any interruption or termination of service as
      an
      Employee, Director or Consultant. Continuous Status as an Employee or Consultant
      shall not be considered interrupted in the case of: (i) sick leave;
      (ii) military leave; (iii) any other leave of absence approved by the
      Administrator, provided that such leave is for a period of not more than ninety
      (90) days, unless reemployment upon the expiration of such leave is
      guaranteed by contract or statute, or unless provided otherwise pursuant to
      Company policy adopted from time to time; or (iv) in the case of transfers
      between locations of the Company or between the Company, its Subsidiaries or
      their respective successors. For purposes of this Plan, a change in status
      from
      an Employee to a Consultant or from a Consultant to an Employee will not
      constitute an interruption of Continuous Status. 

    

    (k)    "Director"
      means a member of the Board. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (l)    "Employee"
      means any person, which may include Officers and Directors, employed by the
      Company or any Parent or Subsidiary of the Company, with the status of
      employment determined by the Administrator in its discretion, subject to any
      requirements of the Code. 

    

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

    

    (n)    "Fair
      Market Value" means, as of any date, the fair market value of Common Stock
      determined as follows: 

    

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

    

    (ii)   If
      the Common Stock
      is quoted on the Nasdaq System (but not on the National Market thereof) or
      regularly quoted by a recognized securities dealer but selling prices are not
      reported, its Fair Market Value shall be the mean between the bid and asked
      prices for the Common Stock on the date of determination, as reported in The
      Wall Street Journal or such other source as the Administrator deems reliable;
      or

    

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

    

    (o)    "Incentive
      Stock Option" means an Option intended to qualify as an incentive stock option
      within the meaning of Section 422 of the Code, as designated in the
      applicable written option agreement. 

    

    (t)    "Non-Employee
      Director" shall mean a Director who is not an Employee. 

    

    (u)    "Nonstatutory
      Stock Option" means an Option not intended to qualify as an Incentive Stock
      Option, as designated in the applicable written option agreement.

    

    (v)    "Option"
      means a stock option granted pursuant to the Plan. 

    

    (w)    "Optionee"
      means an Employee, Director or Consultant who receives an Option. 

    

    (x)    "Parent"
      means a "parent corporation," whether now or hereafter existing, as defined
      in
      Section 424(e) of the Code, or any successor provision. 

    

    (y)    "Plan"
      means this 2007 Stock Incentive Plan. 

    

    (z)    "Restricted
      Period" has the meaning set forth in Section 10(b) of the Plan.

    

    (aa)  
"Rule 16b-3"
      means Rule 16b-3 promulgated under the Exchange Act, as the same may be
      amended from time to time, or any successor provision. 

    

    (bb)   "Share"
      means a share of the Common Stock. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (cc)   "Stock
      Exchange" means any stock exchange or consolidated stock price reporting system
      on which prices for the Common Stock are quoted at any given time. 

    

    (dd)   "Subsidiary"
      means a "subsidiary corporation," whether now or hereafter existing, as defined
      in Section 424(f) of the Code, or any successor provision. 

     

    3.    Stock
      Subject to the Plan.  
      The maximum aggregate number of Shares that may be issued under the Plan is
      35,000,000
      shares
      of Common Stock. The Shares may be authorized, but unissued, or reacquired
      Common Stock.  If an Award should expire, become forfeited or become
      unexercisable for any reason without having been exercised or nonforfeitable
      in
      full, the unpurchased Shares that were subject thereto shall, unless the Plan
      shall have been terminated, become available for future grant under the Plan.
      In
      addition, any Shares of Common Stock which are retained by the Company upon
      exercise of an Option in order to satisfy the exercise or purchase price for
      such Option or any withholding taxes due with respect to such exercise shall
      be
      treated as not issued and shall continue to be available under the Plan.

     

    4.    Administration
      of the Plan.    

     

      
      (a)    Multiple
      Administrative Bodies.   
      If permitted by Rule 16b-3 and by the legal requirements relating to the
      administration of incentive stock option plans, if any, of applicable securities
      laws and the Code (collectively the "Applicable Laws"), grants under the Plan
      may be made by the Board or a Committee appointed by the Board, which Committee
      shall be constituted to comply with Applicable Laws.

     

       
      (b)    General.   
      If a Committee has been appointed pursuant to this Section 4, such
      Committee shall continue to serve in its designated capacity until otherwise
      directed by the Board. From time to time the Board may increase the size of
      the
      Committee and appoint additional members thereof, remove members (with or
      without cause) and appoint new members in substitution therefor, fill vacancies,
      however caused, and remove all members of the Committee and thereafter directly
      administer the Plan, all to the extent permitted by the Applicable Laws.

    

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

     

    
        
         (i)     to
        determine the Fair Market Value of the Common Stock, in accordance with
        Section 2(q) of the Plan; 

       

         
        (ii)    to
        select
        the Consultants, Directors and Employees to whom Awards may from time to
        time be
        granted hereunder; 

       

         
        (iii)   to
        determine whether and to what extent Options or Shares or any combination
        thereof are granted hereunder; 

       

         
        (iv)   to
        determine the number of Shares of Common Stock, if any, to be covered by
        each
        Award granted hereunder; 

       

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

       

                                     
        (vi)   to
        determine the terms and conditions, not inconsistent with the terms of the
        Plan,
        of any Award granted hereunder, including, but not limited to, the share
        price
        and any restriction or limitation, the vesting of any Option or the acceleration
        of vesting or waiver of a forfeiture restructure, based in each case on such
        factors as the Administrator shall determine, in its sole discretion;

       

         
        (vii)   to
        determine whether and under what circumstances an Option may be settled in
        cash
        instead of Common Stock; 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

                                    
         (viii)  
to
        reduce
        the exercise price of any Option to the then current Fair Market Value if
        the
        Fair Market Value of the Common Stock covered by such Option shall have declined
        since the date the Option was granted; provided, however, that, to the extent
        required under Applicable Law or the rules of the applicable Stock Exchange,
        the
        Administrator shall not exercise such power without prior shareholder approval.
        

       

         
        (ix)    
to
        determine the terms and restrictions, if any, applicable to an award of
        Shares;

       

         
        (x)      to
        construe and interpret the terms of the Plan and awards granted pursuant
        to the
        Plan; and 

       

                                     
        (xi)     in
        order
        to fulfill the purposes of the Plan and without amending the Plan, to modify
        Awards to participants who are foreign nationals or employed outside of the
        United States in order to recognize differences in local law, tax policies
        or
        customs. 

       

    

      
      (d)    Effect
      of Administrator's Decision.  
      All decisions, determinations and interpretations of the Administrator shall
      be
      final and binding on all holders of any Award. 

     

    5.     Eligibility.    

     

       (a)     Recipients
      of Grants.  
      Awards may be granted to eligible Employees, Directors and Consultants.
      Incentive Stock Options may be granted only to Employees. 

    

      
      (b)     Type
      of Option.  
      Each Option shall be designated in the written option agreement as either an
      Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
      such designations, to the extent that the aggregate Fair Market Value of Shares
      with respect to which Options designated as Incentive Stock Options are
      exercisable for the first time by any Optionee during any calendar year (under
      all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such
      excess Options shall be treated as Nonstatutory Stock Options. For purposes
      of
      this Section 5(b), Incentive Stock Options shall be taken into account in
      the order in which they were granted, and the Fair Market Value of the Shares
      subject to an Incentive Stock Option shall be determined as of the date of
      the
      grant of such Option. 

    

      
      (c)     No
      Employment Rights.  
      The Plan shall not confer upon any Optionee any right with respect to
      continuation of employment or consulting relationship with the Company, nor
      shall it interfere in any way with such Optionee's right or the Company's right
      to terminate his or her employment or consulting relationship at any time,
      with
      or without cause. 

     

    6.    Term
      of Plan.   
      The Plan shall become effective upon its adoption by the Board. It shall
      continue in effect for ten (10) years from the date thereof, unless sooner
      terminated under Section 15 hereof.

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.    Option
      Exercise Price and Consideration.    

     

      
      (a)     Exercise
      Price.  
      The per share exercise price for the Shares to be issued pursuant to exercise
      of
      an Option shall be such price as is determined by the Board and set forth in
      the
      applicable agreement, but shall be subject to the following: 

     

                   
      (i)    In
      the case of an Incentive Stock Option that is: 

    

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

    

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

    

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

    

    (b)     Permissible
      Consideration.   
      The consideration to be paid for the Shares to be issued upon exercise of an
      Option, including the method of payment, shall be determined by the
      Administrator (and, in the case of an Incentive Stock Option, shall be
      determined at the time of grant) and may consist entirely of (1) cash,
      (2) check, (3) promissory note, (4) other Shares, (5) to the
      extent permitted under Applicable Laws, authorization for the Company to retain
      from the total number of Shares as to which the Option is exercised that number
      of Shares having a Fair Market Value on the date of exercise equal to the
      exercise price for the total number of Shares as to which the Option is
      exercised, (6) to the extent permitted under Applicable Laws, delivery of a
      properly executed exercise notice together with such other documentation as
      the
      Administrator and the broker, if applicable, shall require to effect an exercise
      of the Option and delivery to the Company of the sale or loan proceeds required
      to pay the exercise price and any applicable income or employment taxes,
      (7) any combination of the foregoing methods of payment, or (8) such
      other consideration and method of payment for the issuance of Shares to the
      extent permitted under Applicable Laws. 

     

    9.    Exercise
      of Option.    

     

      
      (a)    Procedure
      for Exercise; Rights as a Shareholder.   
      Any Option granted hereunder shall be exercisable at such times and under such
      conditions as determined by the Administrator, and reflected in the written
      option agreement, which may include vesting requirements and/or performance
      criteria with respect to the Company and/or the Optionee. An Option may not
      be
      exercised for a fraction of a Share. 

     

    An
      Option
      shall be deemed to be exercised when written notice of such exercise has been
      given to the Company in accordance with the terms of the Option by the person
      entitled to exercise the Option and the Company has received full payment for
      the Shares with respect to which the Option is exercised. Full payment may,
      as
      authorized by the Board, consist of any consideration and method of payment
      allowable under Section 8(b) of the Plan. Until the issuance (as evidenced
      by the appropriate entry on the books of the Company or of a duly authorized
      transfer agent of the Company) of the stock certificate evidencing such Shares,
      no right to vote or receive dividends or any other rights as a shareholder
      shall
      exist with respect to such stock, not withstanding the exercise of the Option.
      The Company shall issue (or cause to be issued) such stock certificate promptly
      upon exercise of the Option.   No adjustment will be made for a
      dividend or other right for which the record date is prior to the date the
      stock
      certificate is issued, except as provided in Section 12 of the Plan.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

      
      (b)     Termination
      of Employment or Consulting Relationship.  
       Unless otherwise provided in the Option, in the event of termination of an
      Optionee's Continuous Status, such Optionee may, but only within three
      (3) months after the date of such termination (or such greater period of
      time as is determined by the Administrator, with such determination in the
      case
      of an Incentive Stock Option being made at the time of grant of the Option
      and
      not exceeding three (3) months after the date of such termination),
      exercise his or her Option to the extent that the Optionee was entitled to
      exercise it at the date of such termination. To the extent that Optionee was
      not
      entitled to exercise the Option at the date of such termination, or if Optionee
      does not exercise such Option to the extent so entitled within the time
      specified herein, the Option shall terminate. 

    

      
      (c)     Disability
      of Optionee.   
      In the event of termination of an Optionee's Continuous Status as a result
      of
      his or her total and permanent disability (within the meaning of
      Section 22(e)(3) of the Code), Optionee may, but only within twelve
      (12) months from the date of such termination, unless otherwise provided in
      the Option (but in no event later than the expiration date of the term of such
      Option as set forth in the Option Agreement), exercise the Option to the extent
      otherwise entitled to exercise it at the date of such termination. To the extent
      that Optionee was not entitled to exercise the Option at the date of
      termination, or if Optionee does not exercise such Option to the extent so
      entitled within the time specified herein, the Option shall terminate.

    

      
      (d)     Death
      of Optionee.   
      In the event of the death of an Optionee during the period of Continuous Status,
      or death within three (3) months following the termination of the Optionee's
      Continuous Status, the Option may be exercised, at any time within twelve
      (12) months following the date of death, unless otherwise provided in the
      Option (but in no event later than the expiration date of the term of such
      Option as set forth in the Option Agreement), by the Optionee's estate or by
      a
      person who acquired the right to exercise the Option by bequest or inheritance,
      but only to the extent the Optionee was entitled to exercise the Option at
      the
      date of death or, if earlier, the date of termination of the Continuous Status.
      To the extent that Optionee was not entitled to exercise the Option at the
      date
      of death or termination, as the case may be, or if Optionee does not exercise
      such Option to the extent so entitled within the time specified herein, the
      Option shall terminate. 

    

      (e)    Extension
      of Exercise Period.   
      Notwithstanding the limitations set forth in Sections 9(b), (c) and
      (d) above, the Administrator has full power and authority to extend the
      period of time for which any Option granted under the Plan is to remain
      exercisable following termination of an Optionee's Continuous Status from the
      limited period set forth in the written option agreement to such greater period
      of time as the Administrator shall deem appropriate. 

    
 

      
      (f)    Rule 16b-3.   
      Options granted to Officer, Director, or greater than ten percent shareholder
      of
      the Company shall comply with Rule 16b-3 and shall contain such additional
      conditions or restrictions as may be required thereunder to qualify for the
      maximum exemption for Plan transactions. 

    

      
      (g)    Buyout
      Provisions.   
      The Administrator may at any time offer to buy out for a payment in cash or
      Shares, an Option previously granted, based on such terms and conditions as
      the
      Administrator shall establish and communicate to the Optionee at the time that
      such offer is made. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     
      10.    Shares.    

     

      
      (a)    Grant
      of Shares.   
      Shares of Common Stock may be issued either alone, in addition to, or in tandem
      with other Awards granted under the Plan. After the Administrator determines
      that it will grant an award of shares of Common Stock under the Plan, it shall
      advise the offeree in writing of the terms, conditions and restrictions (if
      any)
      related to the offer, including the Restricted Period applicable to such award,
      the imposition, if any, of any performance-based condition or other restriction
      on an award of such Common Stock, the number of Shares that such person shall
      be
      entitled to purchase, the price to be paid, if any. The prospective recipient
      of
      an Award of Shares shall not have any rights with respect to any such Award,
      unless and until such recipient has executed an award agreement, in the form
      determined by the Administrator, evidencing the Award. 

    

      
      (b)    Lapse
      of Restrictions.   
      With respect to an Award of Shares, the Administrator shall prescribe in the
      award agreement, the period in which such Shares becomes nonforfeitable, which
      may be immediately, over time, or upon specified events (the "Restricted
      Period"). 

    

      
      (c)    Certificates.   
      Each recipient who is granted an Award of Shares shall be issued a stock
      certificate in respect of such Shares, which certificate shall be registered
      in
      the name of the recipient and shall bear an appropriate legend referring to
      the
      terms, conditions, and restrictions applicable to any such Award; provided
      that
      the Company may require that the stock certificates evidencing any Shares that
      are subject to restrictions granted hereunder be held in the custody of the
      Company until any restrictions thereon shall have lapsed, and may require that,
      as a condition of any Award of Shares, the participant shall have delivered
      a
      stock power, endorsed in blank, relating to the Shares covered by such Award.
      

    

      
      (d)    Rights
      as a Shareholder.   
      Except as otherwise provided in an Award Agreement, the participant shall
      possess all incidents of ownership with respect to such Shares during the
      Restricted Period, including the right to receive or reinvest dividends with
      respect to such Shares and to vote such Shares. Certificates for unrestricted
      Shares shall be delivered to the participant promptly after, and only after,
      the
      Restricted Period shall expire without forfeiture in respect of such Awards
      of
      Shares except as the Administrator, in its sole discretion, shall otherwise
      determine. 

    

      
      (e)    Nontransferability.    
      During the Restricted Period, if any, the recipient of such award shall not
      be
      permitted to sell, transfer, pledge, hypothecate or assign Shares awarded under
      the Plan except by will or the laws of descent and distribution. Any attempt
      to
      dispose of any restricted Shares during the Restricted Period in contravention
      of any such restrictions shall be null and void and without effect.

    

      
      (f)    Other
      Provisions.  
       The Award agreement shall contain such other terms, provisions and
      conditions not inconsistent with the Plan as may be determined by the
      Administrator in its sole discretion. In addition, the provisions of the Award
      agreements need not be the same with respect to each purchaser. 

     

    11.    Stock
      Withholding to Satisfy Withholding Tax Obligations.    At
      the discretion of the Administrator, Optionees may satisfy withholding
      obligations as provided in this paragraph. When an Optionee incurs tax liability
      in connection with an Option, which tax liability is subject to tax withholding
      under applicable tax laws, and the Optionee is obligated to pay the Company
      an
      amount required to be withheld under applicable tax laws, the Optionee may
      satisfy the withholding tax obligation by one or some combination of the
      following methods: (a) by cash payment, or (b) out of Optionee's
      current compensation, (c) if permitted by the Administrator, in its
      discretion, by surrendering to the Company Shares that (I) in the case of
      Shares previously acquired from the Company, have been owned by the Optionee
      for
      more than six months on the date of surrender, and (ii) have a fair market
      value on the date of surrender equal to or less than Optionee's marginal tax
      rate times the ordinary income recognized, or (d) by electing to have the
      Company withhold from the Shares to be issued upon exercise of the Option,
      if
      any, that number of Shares having a fair market value equal to the amount
      required to be withheld. For this
      purpose, the fair market value of the Shares to be withheld shall be determined
      on the date that the amount of tax to be withheld is to be determined (the
      "Tax
      Date"). 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

               All
      elections by an Optionee to have Shares withheld to satisfy tax withholding
      obligations shall be made in writing in a form acceptable to the Administrator
      and shall be subject to the following restrictions: (a) the election must be
      made on or prior to the applicable Tax Date; (b) once made, the election shall
      be irrevocable as to the particular Shares of the Option as to which the
      election is made; and (c) all elections shall be subject to the consent or
      disapproval of the Administrator. 

     

               In
      the
      event the election to have Shares withheld is made by an Optionee and the Tax
      Date is deferred under Section 83 of the Code because no election is filed
      under Section 83(b) of the Code, the Optionee shall receive the full number
      of Shares with respect to which the Option is exercised but such Optionee shall
      be unconditionally obligated to tender back to the Company the proper number
      of
      Shares on the Tax Date. 

     

    12.    Adjustments
      Upon Changes in Capitalization, Corporate Transactions.    

     

      
       (a)    Changes
      in Capitalization.    
      Subject to any required action by the shareholders of the Company, (i) the
      number of shares of Common Stock covered by each outstanding Award,
      (ii) the number of shares of Common Stock that have been authorized for
      issuance under the Plan but as to which no Awards have yet been granted or
      that
      have been returned to the Plan upon cancellation or expiration of an Award
      or
      otherwise, (iii) the maximum number of shares of Common Stock for which
      Awards may be granted to any Employee under the Plan, (iv) the price per
      share of Common Stock covered by each such outstanding Award, and (v) the
      number of shares of Common Stock that may be granted shall be proportionately
      adjusted for any increase or decrease in the number of issued shares of Common
      Stock resulting from a stock split, reverse stock split, stock dividend,
      combination, recapitalization or reclassification of the Common Stock, or any
      other increase or decrease in the number of issued shares of Common Stock
      effected without receipt of consideration by the Company; provided, however,
      that conversion of any convertible securities of the Company shall not be deemed
      to have been "effected without receipt of consideration." Such adjustment shall
      be made by the Board, whose determination in that respect shall be final,
      binding and conclusive. Except as expressly provided herein,
      no issuance by the Company of shares of stock of any class, or securities
      convertible into shares of stock of any class, shall affect, and no adjustment
      by reason thereof shall be made with respect to, the number or price of shares
      of Common Stock subject to an Award. 

    

      
      (b)    Corporate
      Transactions.    
      In the event of the proposed dissolution or liquidation of the Company, each
      Award will terminate immediately prior to the consummation of such proposed
      action, unless otherwise provided by the Administrator. Additionally, the
      Administrator may, in the exercise of its sole discretion in such instances,
      declare that any Award shall terminate as of a date fixed by the Administrator
      and that each Award shall be vested and non-forfeitable and any conditions
      on
      each such Award shall lapse, as to all or any part of such Award, including
      Shares as to which the Award would not otherwise be exercisable or
      non-forfeitable. In the event of a proposed sale of all or substantially all
      of
      the assets of the Company, or the merger of the Company with or into another
      corporation, each Award shall be assumed or an equivalent Award shall be
      substituted by such successor corporation or a parent or subsidiary of such
      successor corporation, unless the Administrator determines, in the exercise
      of
      its sole discretion and in lieu of such assumption or substitution, that the
      Award shall be vested and non-forfeitable and any conditions on each such Award
      shall lapse, as to all or any part of such Award, including Shares as to which
      the Award would not otherwise be exercisable or non-forfeitable. If the
      Administrator makes an Award exercisable or non-forfeitable in lieu of
      assumption or substitution in the event of a merger or sale of assets, the
      Administrator shall notify the recipient that such Award shall be exercisable
      for a period of thirty (30) days from the date of such notice, and
      thereafter will terminate upon the expiration of such period. 

    

    13.     Non-transferability
      of Awards.    An
      Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
      of in any manner other than by will or by the laws of descent or distribution.
      

    

    14.      Time
      of
      Granting of an Award.    The
      date of grant of an Award shall, for all purposes, be the date on which the
      Administrator makes the determination granting such Award, or such other date
      as
      is determined by the Board. Notice of the determination shall be given to each
      Employee or Consultant to whom an Award is so granted within a reasonable time
      after the date of such grant. 

     

    15.     Amendment
      and Termination of the Plan.    

     

      
      (a)     Amendment
      and
      Termination.   
      The Board may amend, alter, suspend, discontinue, or terminate the Plan or
      any
      portion thereof at any time; provided, that no such amendment, alteration,
      suspension, discontinuation or termination shall be made without stockholder
      approval if such approval is necessary to comply with any tax, securities or
      regulatory. 

     

      
      (b)     Effect
      of Amendment or Termination.   
      Notwithstanding the foregoing, any such amendment or termination of the Plan
      shall not affect Options already granted and such Options shall remain in full
      force and effect as if this Plan had not been amended or terminated, unless
      mutually agreed otherwise between the Optionee and the Board, which agreement
      must be in writing and signed by the Optionee and the Company. 

     

    16.    Conditions
      Upon Issuance of Shares.    Shares
      shall not be issued pursuant to the exercise of an Award unless the exercise
      of
      such Award and the issuance and delivery of such Shares pursuant thereto shall
      comply with all relevant provisions of law, including, without limitation,
      the
      Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
      promulgated thereunder, and the requirements of any Stock
      Exchange.

     

    17.    Reservation
      of Shares.    The
      Company, during the term of this Plan, will at all times reserve and keep
      available such number of Shares as shall be sufficient to satisfy the
      requirements of the Plan. The inability of the Company to obtain authority
      from
      any regulatory body having jurisdiction, which authority is deemed by the
      Company's counsel to be necessary to the lawful issuance and sale of any Shares
      hereunder, shall relieve the Company of any liability in respect of the failure
      to issue or sell such Shares as to which such requisite authority shall not
      have
      been obtained. 

     

    18.    Agreements.  
      Awards shall be evidenced by written agreements in such form as the
      Administrator shall approve from time to time. 

     

    19.    Governing
      Law.  
      The Plan and all determinations made and actions taken pursuant hereto shall
      be
      governed by the laws of the State of Nevada, without giving effect to the
      conflict of laws principles thereof. Each
      party submits to the exclusive jurisdiction and venue of any California State
      or
      Federal court with respect to any controversy or claim arising out of, related
      to, or connected with this Plan, its enforcement or interpretation or the Awards
      issued hereunder.

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