Document:

ex10_1.htm

    Exhibit
10.1

    STOCK
PURCHASE AGREEMENT

    

    

     This
Stock Purchase Agreement ("Agreement") is made as of September 23, 2008,
by Home System Group ("Buyer"), and Asia Forever Investment
Limited, a Hong
Kong corporation (the "Company"),  and Liming Jiao and Xiaohong
Chen ("Sellers").

    

    RECITALS

    

                    
Sellers desires to sell, and Buyer desires to purchase, all of the issued and
outstanding shares (the "Shares") of capital stock of the Company  for
the consideration and on the terms set forth in this Agreement.

    

    

    AGREEMENT

    

     The
parties, intending to be legally bound, agree as follows:

    

    1.             DEFINITIONS

    

     For
purposes of this Agreement, the following terms have the meanings specified or
referred to in this Section 1:

    

    "Acquired
Companies"--the Company and its Subsidiaries.

     

     "Best
Efforts"--the efforts that a prudent Person desirous of achieving a
result would use in similar circumstances to ensure that such result is achieved
as expeditiously as possible ; provided, however,
that an obligation to use Best Efforts under this Agreement does not require the
Person subject to that obligation to take actions that would result in a
materially adverse change in the benefits to such Person of this Agreement and
the Contemplated Transactions.

    

    "Buyer"--as defined
in the first paragraph of this Agreement.

    

    "Closing Date"--the
date and time as of which the Closing actually takes place.

    

    "Company"--as defined
in the Recitals of this Agreement.

    

    "Contemplated
Transactions"--all of the transactions contemplated by this Agreement,
including:

    

    (a)           the
sale of the Shares by Seller to Buyer;

    

    (b)           the
performance by Buyer and Seller of their respective covenants and obligations
under this Agreement; and

    

    (c)           Buyer's
acquisition and ownership of the Shares and exercise of control over the
Acquired Companies.

    

    
      
        
        

      

      
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    "Encumbrance"--any
charge, claim, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any
kind.
 

    "GAAP"--generally
accepted United States accounting principles, applied on a basis consistent
basis.

    

    "Governmental
Authorization"--any approval, consent, license, permit, waiver, or other
authorization issued, granted, given, or otherwise made available by or under
the authority of any Governmental Body or pursuant to any Legal
Requirement.

    

    "Governmental
Body"—any federal, state, local, municipal, or other government
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature over
the parties or the Acquired Companies.

    

    "Knowledge"--an
individual will be deemed to have "Knowledge" of a particular fact or other
matter if such individual is actually aware of such fact or other
matter.  A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.

    

    "Legal
Requirement"--any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, regulation, statute, or treaty.

    

    "Order"--any award,
decision, injunction, judgment, order, ruling, subpoena, or verdict entered,
issued, made, or rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.

    

    "Ordinary Course of
Business"--an action taken by a Person will be deemed to have been taken
in the "Ordinary Course of Business" only if:

    

    (a)           such
action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person;
and

    

    (b)           such
action is not required to be authorized by the board of directors of such Person
(or by any Person or group of Persons exercising similar
authority).

    

    "Organizational
Documents"--(a) the articles or certificate of incorporation and the
bylaws of a corporation; (b) the partnership agreement and any statement of
partnership of a general partnership; (c) the limited partnership agreement
and the certificate of limited partnership of a limited partnership;
(d) any charter or similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and (e) any amendment to
any of the foregoing.

     

    
      
        
        

      

      
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 "Person"--any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental
Body.

    

    "Proceeding"--any
action, hearing, litigation, or suit commenced, brought, conducted, or heard by
or before, or otherwise involving, any Governmental Body.

    

    "Representative"--with
respect to a particular Person, any director, officer, employee, agent,
consultant, advisor, or other representative of such Person, including legal
counsel, accountants, and financial advisors.

    

    "Securities Act"--the
Securities Act of 1933 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.

    

    "Subsidiary"--with
respect to any Person (the "Owner"), any corporation or other Person of which
securities or other interests having the power to elect a majority of that
corporation's or other Person's board of directors or similar governing body, or
otherwise having the power to direct the business and policies of that
corporation or other Person are held by the Owner or one or more of its
Subsidiaries; when used without reference to a particular Person, "Subsidiary"
means a Subsidiary of the Company.

    

    "Threatened"--a
Proceeding will be deemed to have been "Threatened" if any demand or statement
has been made or any notice has been given.

    

    2.           
 SALE AND TRANSFER OF SHARES; CLOSING

    

     2.1           SHARES

    

     Subject
to the terms and conditions of this Agreement, at the Closing, Seller will sell
and transfer the Shares to Buyer, and Buyer will purchase the Shares from
Seller.

    

     2.2           PURCHASE
PRICE

    

    The
purchase price (the "Purchase Price") for the Shares will be $ 39, 473, 684,
21 (or 270 million
RMB).

    

    

     2.3           CLOSING

    

    The
purchase and sale (the "Closing") provided for in this Agreement will take place
at the offices of Buyer's counsel, at 10:00 a.m. (local time) as soon as the
conditions to closing are satisfied or at such other time and place as the
parties may agree. Subject to the provisions of Section 9, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 2.3 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.

     

    
      
        
        

      

      
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2.4           CLOSING
OBLIGATIONS

    

    At the
Closing:

    

    (a)           Seller
will deliver to Buyer:

    

    (i)           certificates
representing the Shares, duly endorsed (or accompanied by duly executed stock
powers), with signatures guaranteed by a commercial bank or by a member firm of
the New York Stock Exchange, for transfer to Buyer; and

    

    

    (b)           Buyer
will deliver to each Seller a note equal to 1⁄2 of the Purchase Price, payable as
follows:

    The note
will have a maturity of 2 years and will bear no interest.  Principal
will be repaid as follows:  25% payable on or before December 31,
2008, the remaining principal amount to be repaid in 3 semi-annual installments
with the final installment due on or before the maturity date.

    

    

    

    

    3.            
REPRESENTATIONS AND WARRANTIES OF SELLER

    

    Seller
represents and warrants to Buyer as follows:

    

    3.1           
ORGANIZATION AND GOOD STANDING

    

    (a)           Each
Acquired Company that is a corporation is duly organized, validly existing, and
in good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use. Each Acquired Company is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or other
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification.

    

    (b)           Seller
has delivered to Buyer copies of the Organizational Documents of each Acquired
Company, as currently in effect.

    

    3.2           AUTHORITY;
NO CONFLICT

    

    (a)           This
Agreement constitutes the legal, valid, and binding obligation of Seller,
enforceable against Seller in accordance with its terms. Seller has the absolute
and unrestricted right, power, authority, and capacity to execute and deliver
this Agreement and to perform its obligations under this Agreement.

     

    
      
        
        

      

      
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(b)           Neither the
execution and delivery of this Agreement nor the consummation or performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time):

    

    (i)           contravene,
conflict with, or result in a violation of (A) any provision of the
Organizational Documents of the Acquired Companies, or (B) any resolution
adopted by the board of directors or the stockholders of any Acquired
Company;

    

    (ii)           contravene,
conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any Legal Requirement or any
Order to which any Acquired Company or either Seller, or any of the assets owned
or used by any Acquired Company, may be subject;

    

    (iii)           contravene,
conflict with, or result in a violation of any of the terms or requirements of,
or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any Governmental Authorization that is held by any
Acquired Company or that otherwise relates to the business of, or any of the
assets owned or used by, any Acquired Company;

    

    (iv)           contravene,
conflict with, or result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any material contract; or

    

    (v)           result
in the imposition or creation of any material Encumbrance upon or with respect
to any of the assets owned or used by any Acquired Company.

    

    Neither
Seller nor any Acquired Company is or will be required to give any notice to or
obtain any consent from any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the Contemplated
Transactions.

    

    3.3           CAPITALIZATION

    

    Seller is
and will be on the Closing Date the record and beneficial owner and holder of
the Shares, free and clear of all Encumbrances.  There are no
contracts relating to the issuance, sale, or transfer of any equity securities
or other securities of any Acquired Company. No Acquired Company owns, or has
any contract to acquire, any equity securities or other securities of any Person
(other than Acquired Companies) or any direct or indirect equity or ownership
interest in any other business.

    

    3.4           FINANCIAL
STATEMENTS

    

    Seller
has delivered to Buyer: (a) an [unaudited] consolidated balance sheet of
the Acquired Companies as at ____________(the "Balance Sheet"), and the related
[unaudited] consolidated statements of income, changes in stockholders' equity,
and cash flow for the fiscal period
then ended. Such financial statements and notes present the financial condition
and the results of operations, changes in stockholders' equity, and cash flow of
the Acquired Companies in accordance with GAAP, subject, in the case of interim
financial statements, to normal recurring year-end adjustments and the absence
of notes.

     

    
      
        
        

      

      
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    3.5           BOOKS
AND RECORDS

    

    The
minute books of the Acquired Companies contain accurate and complete records of
all meetings held of, and corporate action taken by, the stockholders, the
Boards of Directors, and committees of the Boards of Directors of the Acquired
Companies, and no meeting of any such stockholders, Board of Directors, or
committee has been held for which minutes have not been prepared and are not
contained in such minute books. At the Closing, all of those books and records
will be in the possession of the Acquired Companies.

    

    3.6           TITLE
TO PROPERTIES; ENCUMBRANCES

    

    The
Acquired  Companies own all the properties and assets that they
purport to own, including all of the properties and assets reflected in the
Balance Sheet (except for assets held under capitalized leases and personal
property sold since the date of the Balance Sheet in the Ordinary Course of
Business).

    

    3.7           CONDITION
AND SUFFICIENCY OF ASSETS

    

    The
buildings, plants, structures, and equipment of the Acquired Companies are
adequate for the uses to which they are being put. The building, plants,
structures, and equipment of the Acquired Companies are sufficient for the
continued conduct of the Acquired Companies' businesses after the Closing in
substantially the same manner as conducted prior to the Closing.

    

    3.8           ACCOUNTS
RECEIVABLE

    

    All
accounts receivable of the Acquired Companies that are reflected on the Balance
Sheet (collectively, the "Accounts Receivable") represent or will represent
valid obligations arising from sales actually made or services actually
performed in the Ordinary Course of Business. There is no contest, claim, or
right of set-off, other than returns in the Ordinary Course of Business, under
any contract with any obligor of an Accounts Receivable relating to the amount
or validity of such Accounts Receivable.

    

    3.9           INVENTORY

    

    The
inventory of the Acquired Companies reflected in the Balance Sheet consists of
items of a quality and quantity consistent with the Ordinary Course of
Business.  The quantities of items of inventory (whether raw
materials, work-in-process, or finished goods) are not excessive, but are
reasonable in the present circumstances of the Acquired Companies.

    

    
      
        
        

      

      
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    3.10         RELATIONSHIPS
WITH RELATED PERSONS

     

                   
Seller does not have any interest in any real or personal property, used in the
Acquired Companies' businesses. Seller is not a party to any contract with, or
has any claim or right against, any Acquired Company after Closing.

    

    3.11         TAXES

    

    (a)           The
Acquired Companies have filed or caused to be filed all tax returns that are or
were required to be filed by or with respect to any of them pursuant to
applicable Legal Requirements. The Acquired Companies have paid, or made
provision for the payment of, all taxes that have become due pursuant to those
tax returns, or pursuant to any assessment received by Seller or any Acquired
Company, except such taxes, if any, as are being contested in good faith and as
to which adequate reserves (determined in accordance with GAAP) have been
provided in the Balance Sheet.

    

    (b)           Seller
has not given or been requested to give waivers or extensions of any statute of
limitations relating to the payment of taxes of any Acquired Company or for
which any Acquired Company may be liable.

    

    (c)           All
tax returns filed by any Acquired Company are true, correct, and complete. There
is no tax sharing agreement that will require any payment by any Acquired
Company after the date of this Agreement.

    

    3.12         NO
MATERIAL ADVERSE CHANGE

    

    Since the
date of the Balance Sheet, there has not been any material adverse change in the
business, operations, properties, assets, or condition of any Acquired Company,
and no event has occurred or circumstance exists that may result in such a
material adverse change.

    

    
      	
               
      

            	
              3.13

            	
              COMPLIANCE
      WITH LEGAL REQUIREMENTS; GOVERNMENTAL
  AUTHORIZATIONS

            

    

    

    (a)

    

    (i)           each
Acquired Company is in full compliance with each Legal Requirement that is
applicable to it or to the conduct or operation of its business or the ownership
or use of any of its assets;

    

    (ii)           no
event has occurred or circumstance exists that (with or without notice or lapse
of time) (A) may constitute or result in a violation by any Acquired Company of,
or a failure on the part of any Acquired Company to comply with, any Legal
Requirement, or (B) may give rise to any obligation on the part of any Acquired
Company to undertake, or to bear all or any portion of the cost of, any remedial
action of any nature; and

    

    (iii)           no
Acquired Company has received any notice or other communication from any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible, or potential violation of, or failure to comply with, any Legal
Requirement, or (B) any
alleged obligation on the part of any Acquired Company to undertake, or to bear
all or any portion of the cost of, any remedial action of any
nature.

    

    
      
        
        

      

      
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    3.14         EMPLOYEES

    

    No
employee of any Acquired Company is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee and any other Person
("Proprietary Rights Agreement") that in any way adversely affects or will
affect (i) the performance of his duties as an employee of the Acquired
Companies, or (ii) the ability of any Acquired Company to conduct its business,
including any Proprietary Rights Agreement with Seller or the Acquired Companies
by any  such employee or director. To Seller's Knowledge, no key
employee of any Acquired Company intends to terminate his employment with such
Acquired Company.

    

    3.15         LEGAL
PROCEEDINGS; ORDERS

    

    There is
no pending Proceeding:

    

    (i)           that
has been commenced by or against any Acquired Company or any of the assets owned
or used by, any Acquired Company; or

    

    (ii)           that
challenges any of the Contemplated Transactions.

    

    

    3.16         ABSENCE
OF CERTAIN CHANGES AND EVENTS

    

    Since the
date of the Balance Sheet, the Acquired Companies have conducted their
businesses only in the Ordinary Course of Business and there has not been
any:

    

    (a)           change
in any Acquired Company's authorized or issued capital stock; grant of any stock
option or right to purchase shares of capital stock of any Acquired Company;
issuance of any security convertible into such capital stock; grant of any
registration rights; purchase, redemption, retirement, or other acquisition by
any Acquired Company of any shares of any such capital stock; or declaration or
payment of any dividend or other distribution or payment in respect of shares of
capital stock;

    

    (b)           amendment
to the Organizational Documents of any Acquired Company;

    

    (c)           payment
or increase by any Acquired Company of any bonuses, salaries, or other
compensation to any stockholder, director, officer, or (except in the Ordinary
Course of Business) employee or entry into any employment, severance, or similar
contract with any director, officer, or employee; or

    

    (d)           sale
(other than sales of inventory in the Ordinary Course of Business), lease, or
other disposition of any material asset or property of any Acquired Company or
mortgage, pledge, or imposition of any lien or other encumbrance on any material
asset or property of any Acquired Company.

    

    
      
        
        

      

      
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    3.17         CONTRACTS;
NO DEFAULTS

    

    

    

    (i)           Seller
does not have any rights under any contract that relates to the business of, or
any of the assets owned or used by, any Acquired Company; and

    

    (ii)           to
the Knowledge of Seller, no officer, agent, employee, consultant, or contractor
of any Acquired Company is bound by any contract that purports to limit the
ability of such officer, agent, employee, consultant, or contractor to (A)
engage in or continue any conduct, activity, or practice relating to the
business of any Acquired Company, or (B) assign to any Acquired Company or to
any other Person any rights to any invention, improvement, or
discovery.

    

    3.18         BROKERS
OR FINDERS

    

    Seller
has incurred no obligation or liability, contingent or otherwise, for brokerage
or finders' fees or agents' commissions or other similar payment in connection
with this Agreement.

    

    4.            REPRESENTATIONS
AND WARRANTIES OF BUYER

    

    Buyer
represents and warrants to Seller as follows:

    

    4.1           BROKERS
OR FINDERS

    

    Buyer and
its officers and agents have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement and will indemnify and hold
Seller harmless from any such payment alleged to be due by or through Buyer as a
result of the action of Buyer or its officers or agents.

    

    5.           
COVENANTS OF SELLER PRIOR TO CLOSING DATE

    

    5.1           ACCESS
AND INVESTIGATION

    

    Between
the date of this Agreement and the Closing Date, Seller will, and will cause
each Acquired Company and its Representatives to, (a) afford Buyer and its
Representatives and prospective lenders and their Representatives (collectively,
"Buyer's Advisors") reasonable access to each Acquired Company's personnel,
properties, contracts, books and records, and other documents and data, (b)
furnish Buyer and Buyer's Advisors with copies of all such contracts, books and
records, and other existing documents and data as Buyer may reasonably request,
and (c) furnish Buyer and Buyer's Advisors with such additional financial,
operating, and other data and information as Buyer may reasonably
request.

     

    
      
        
        

      

      
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              5.2

            	
              OPERATION
      OF THE BUSINESSES OF THE ACQUIRED
COMPANIES

            

    

     

    Between
the date of this Agreement and the Closing Date, Seller will, and will cause
each Acquired Company to:

    

    (a)           conduct
the business of such Acquired Company only in the Ordinary Course of
Business;

    

    (b)           use
its Best Efforts to preserve intact the current business organization of such
Acquired Company, keep available the services of the current officers,
employees, and agents of such Acquired Company, and maintain the relations and
good will with suppliers, customers, landlords, creditors, employees, agents,
and others having business relationships with such Acquired
Company;

    

    (c)           confer
with Buyer concerning operational matters of a material nature; and

    

    (d)           otherwise
report periodically to Buyer concerning the status of the business, operations,
and finances of such Acquired Company.

    

    5.3           REQUIRED
APPROVALS

    

     As
promptly as practicable after the date of this Agreement, Seller will, and will
cause each Acquired Company to, make all filings required by Legal Requirements
to be made by them in order to consummate the Contemplated Transactions. Between
the date of this Agreement and the Closing Date, Seller will, and will cause
each Acquired Company to, (a) cooperate with Buyer with respect to all filings
that Buyer elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions, and (b) cooperate with Buyer in
obtaining all consents.

    

    5.5           BEST
EFFORTS

    

    Between
the date of this Agreement and the Closing Date, Seller will use its Best
Efforts to cause the conditions in Sections 7 and 8 to be
satisfied.

    

    6.           
COVENANTS OF BUYER PRIOR TO CLOSING DATE

    

    6.1           APPROVALS
OF GOVERNMENTAL BODIES

    

    As
promptly as practicable after the date of this Agreement, Buyer will make all
filings required by Legal Requirements to be made by them to consummate the
Contemplated Transactions. Between the date of this Agreement and the Closing
Date, Buyer will  cooperate with Seller with respect to all filings
that Seller are required by Legal Requirements to make in connection with the
Contemplated Transactions, and (ii) cooperate with Seller in obtaining all
consents.

    

    6.2           BEST
EFFORTS

    

    Between
the date of this Agreement and the Closing Date, Buyer will use its Best Efforts
to cause the conditions in Sections 7 and 8 to be satisfied.

     

    
      
        
        

      

      
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    7.           
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE

    

    Buyer's
obligation to purchase the Shares and to take the other actions required to be
taken by Buyer at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
Buyer, in whole or in part):

    

    7.1           ACCURACY
OF REPRESENTATIONS

    

    All of
Seller's representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Agreement, and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.

    

    7.2           SELLER'S
PERFORMANCE

    

    All of
the covenants and obligations that Seller are required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material
respects.

    

    7.3           CONSENTS

    

    Each of
the required consents, if any, must have been obtained.

    

    7.4           NO
PROCEEDINGS

    

    Since the
date of this Agreement, there must not have been commenced or Threatened against
Buyer any Proceeding (a) involving any challenge to any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the Contemplated
Transactions.

    

    7.5           NO
PROHIBITION

    

    Neither
the consummation nor the performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time),
materially contravene, or conflict with, or result in a material violation of,
any applicable Legal Requirement or Order.

    

    8.           
CONDITIONS PRECEDENT TO SELLER'S  OBLIGATION TO CLOSE

    

    Seller's
obligation to sell the Shares and to take the other actions required to be taken
by Seller at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
Seller, in whole or in part):

    

    
      
        
        

      

      
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    8.1
BUYER'S PERFORMANCE

     

                  
All of the covenants and obligations that Buyer is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), must have been performed and complied with in all material
respects.

    

    8.2           NO
INJUNCTION

    

    There
must not be in effect any Legal Requirement or any injunction or other Order
that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since
the date of this Agreement.

    

    9.          
 TERMINATION

    

    9.1           TERMINATION
EVENTS

    

    This
Agreement may, by notice given prior to or at the Closing, be
terminated:

    

    (a)           by
either Buyer or Seller if a material breach of any provision of this Agreement
has been committed by the other party and such breach has not been
waived;

    

    (b)           (i)
by Buyer if any of the conditions in Section 7 has not been satisfied as of the
Closing Date (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition on or
before the Closing Date; or (ii) by Seller, if any of the conditions in Section
8 has not been satisfied of the Closing Date (other than through the failure of
Seller to comply with their obligations under this Agreement) and Seller has not
waived such condition on or before the Closing Date;

    

    (c)           by
mutual consent of Buyer and Seller; or

    

    (d)           by
either Buyer or Seller if the Closing has not occurred (other than through the
failure of any party seeking to terminate this Agreement to comply fully with
its obligations under this Agreement) on or before _______________, or such
later date as the parties may agree upon in writing.

    

    9.2           EFFECT
OF TERMINATION

    

    Each
party's right of termination under Section 9.1 is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies. If this Agreement is
terminated pursuant to Section 9.1, all further obligations of the parties
under this Agreement will terminate, except that the obligations in Sections
11.1 and 11.3 will survive; provided, however, that if this Agreement is
terminated by a party because of the breach of the Agreement by the other party
or because one or more of the conditions to the terminating party's obligations
under this Agreement is not satisfied as a result of the other party's failure
to comply with its obligations under this Agreement, the terminating party's
right to pursue all legal remedies will survive such termination
unimpaired.

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    10.           INDEMNIFICATION;
REMEDIES

    

    
      	
               
      

            	
              10.1

            	
              SURVIVAL

            

    

    

    All
representations, warranties, covenants, and obligations in this Agreement, will
survive the Closing until the expiration of the statute of
limitations.

    

    10.2           INDEMNIFICATION
AND PAYMENT OF DAMAGES BY SELLER

    

    Seller
will indemnify and hold harmless Buyer and its Representatives, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified Persons")
for, and will pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage, expense (including reasonable attorneys' fees) involving a
third-party claim (collectively, "Damages"), arising from: (a) any breach of any
representation or warranty made by Seller in this Agreement; or (b) any claim by
any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by any such
Person with either Seller or any Acquired Company (or any Person acting on their
behalf) in connection with any of the Contemplated Transactions.

    

    

    11.           GENERAL
PROVISIONS

    

    11.1         EXPENSES

    

    Except as
otherwise expressly provided in this Agreement, each party to this Agreement
will bear its respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of agents, representatives, counsel, and
accountants.  In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another
party.

    

    11.2         PUBLIC
ANNOUNCEMENTS

    

    Any
public announcement or similar publicity with respect to this Agreement or the
Contemplated Transactions will be issued, if at all, at such time and in such
manner as Seller determines. Unless consented to by the other party in advance
or required by Legal Requirements, prior to the Closing the parties shall keep
this Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person. Seller and Buyer will consult with each other
concerning the means by which the Acquired Companies' employees, customers, and
suppliers and others having dealings with the Acquired Companies will be
informed of the Contemplated Transactions, and Buyer will have the right to be
present for any such communication.

    

    11.3         CONFIDENTIALITY

    

    Between
the date of this Agreement and the Closing Date, Buyer and Seller will maintain
in confidence, and will cause their Representatives to maintain in confidence,
and not use to the detriment of another party or an Acquired Company any
written, oral, or other information obtained in confidence from another party or
an Acquired Company in connection with this Agreement
or the Contemplated Transactions, unless (a) such information is already known
to such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary and appropriate in making any filing or
obtaining any consent or approval required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such information is
required by legal proceedings.

    

    If the
Contemplated Transactions are not consummated, each party will return or destroy
as much of such written information as the other party may reasonably
request.

    

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    11.4         NOTICES

    

    All notices, consents, waivers, and
other communications under this Agreement must be in writing and will be deemed
to have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth at addresses set forth on the signature page
hereof (or to such other addresses and telecopier numbers as a party may
designate by notice to the other party).

    

    11.5         ENTIRE
AGREEMENT AND MODIFICATION

    

    This
Agreement supersedes all prior agreements between the parties with respect to
its subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by the party to be charged
with the amendment.

    

    11.6         ASSIGNMENTS,
SUCCESSORS, AND NO THIRD-PARTY RIGHTS

    

    Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties, except that Buyer may assign any of its rights
(but not its obligations, which shall be retained by Buyer) under this Agreement
to any Subsidiary of Buyer.  Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.

    

    11.7         SEVERABILITY

    

    If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

    

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    11.8         SECTION
HEADINGS, CONSTRUCTION

    

    The
headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "Section"
or "Sections" refer to the corresponding Section or Sections of this Agreement.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.  With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.

    

    11.9         GOVERNING
LAW

    

    This
Agreement will be governed by the laws of the State of Delaware without regard
to conflicts of laws principles.

    

    11.10      COUNTERPARTS

    

    This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.

    

    

    IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.

    

     

    
      
        	Buyer:	Seller:	 
	 	 	 	 
	 	 	 	 
	By	 	
                 

              	By:	
                 

              	 
	Name: 	Name :	 	 
	Title:  	Title :	 	 
	Address:	 	 	 
	 	Address:	 	 
	 Fax:	Fax:	 	 
	    	 	 	 

      

    

                                                                               

     

     

     

     

     

    -15-ex41.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

	Exhibit 4.1

	CYBERMESH INTERNATIONAL CORPORATION

	2008 STOCK OPTION PLAN 

	1.         PURPOSE OF PLAN

The purpose of this 2008 Stock Option Plan (the "Plan") is to assist Cybermesh International Corporation (the "Company") and any parent or subsidiary (together with the Company, the "Companies") in the continued employment or service of officers, employees, consultants and directors, by offering them a greater stake in the Companies' success and a closer identity with the Companies, and to aid in attracting individuals whose employment or services would be helpful to the Companies and would contribute to their success.

This Plan shall at all times be subject to all legal requirements relating to the administration of stock option plans, if any, under applicable corporate laws, applicable United States federal and state securities laws, the Code (as hereinafter defined), the rules of any applicable stock exchange or stock quotation system, and the rules of any foreign jurisdiction applicable to Options granted to residents therein (collectively, the “Applicable Laws”).

	2.         DEFINITIONS

	(a)      	"Board" means the board of directors of the Company. 
	 
	(b)      	"Code" means the Internal Revenue Code of 1986, as amended. 
	 
	(c)      	"Committee" means the committee described in Section 5. 
	 
	(d)      	"Companies" means the Company and any parent or subsidiary, as defined in Sections 424(e) and 424(f) of the Code. 
	 
	(e)      	"Date of Grant" means the date on which an Option is granted, or on which the exercise price of an outstanding Option is modified. 
	 
	(f)      	"Exercise Price" means the price per Share that an Optionee must pay in order to exercise an Option. 
	 
	(g)      	"Incentive Stock Option" shall mean an Option granted under the Plan, designated at the time of such grant as an incentive stock option (and qualifying as such under Section 422 of the Code) and containing the terms specified herein for incentive stock options. 
	 
	(h)      	"Non-Qualified Option" shall mean an Option granted under the Plan, which is designated at the time of such grant as a non-qualified option, which contains the terms specified herein for non-qualified options, and which fails to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code. 
	 
	(i)      	"Option" means any stock option granted under the Plan and described either in Section 3(a) or 3(b). 
	 

	(j)      	"Option Agreement" shall have the meaning set forth in Section 7. 
	 
	(k)      	"Optionee" means a person to whom an Option has been granted under the Plan, which Option has not been exercised and has not expired or terminated. 
	 
	(l)      	“OTC BB” means the Over-the-Counter Bulletin Board in the United States; 
	 
	(m)      	"Shares" means common shares of the Company. 
	 
	(n)      	"Ten Percent Shareholder" means a person who on the Date of the Grant owns, either directly or within the meaning of the attribution rules contained in Section 424(d) of the Code, stock possessing more than ten percent of the total combined voting power of all classes of stock of his or her employer corporation or of its parent or subsidiary corporations, as defined respectively in Sections 424(e) and (f) of the Code. 
	 
	(o)      	"Value" means on any given date, the fair market value of the Shares as determined by the Board or the Committee, taking into account all information that the Board or the Committee considers relevant, including applicable provisions of the Code and rulings and regulations thereunder. 
	 

3.         RIGHTS TO BE GRANTED

Rights that may be granted under the Plan are:

	(a)      	Incentive Stock Options, that give the Optionee the right for a specified time period to purchase a specified number of Shares at an Exercise Price not less than that specified in Section 7(a). 
	 
	(b)      	Non-Qualified Options, that give the Optionee the right for a specified time period to purchase a specified number of Shares at an Exercise Price not less than that specified in Section 7(a). 
	 

	4.         STOCK SUBJECT TO PLAN

The maximum number of Shares that may be issued under the Plan is 3,000,000 Shares, subject to adjustment pursuant to the provisions of Section 10. If an Option terminates without having been exercised in whole or part, other Options may be granted covering the Shares as to which the Option was not exercised. Notwithstanding anything to the contrary contained in the Plan, the aggregate number of Shares issued to an Optionee on the exercise of Options granted under the Plan, or reserved for issuance to an Optionee on the exercise of Options granted under the Plan, may not exceed twenty five percent (25%) of the maximum number of Shares authorized to be issued on the exercise of Options under the Plan.

	5.         ADMINISTRATION OF PLAN

	(a)      	The Plan shall be administered, and the grant of Options under this Plan shall be approved in advance, by the Board, or if the Board by resolution so decides, by a stock option committee (the "Committee") designated by the Board, the members of which shall be appointed by and serve on such Committee at the pleasure of the Board. 
	 

- 2 -

	(b)      	To the extent required for transactions under the Plan to qualify for exemptions available under Rule 16b-3 promulgated under the U.S. Securities Act ("Rule 16b- 3"), if the Board shall delegate its authority to the Committee then each member of the Committee will be a "Non-Employee Director" within the meaning of Rule 16b-3. 
	 	To the extent required for compensation realized from the exercise of options issued under the Plan to be deductible by the Company or any of the Companies pursuant to Section 162(m) of the Code, the members of said Committee will be "outside directors" within the meaning of Section 162(m) of the Code. 
	 
	(c)      	The Committee shall have the powers and authority vested in the Board hereunder (including the power and authority to interpret any provision of the Plan or of any Option). The members of any such Committee shall serve at the pleasure of the Board. 
	 	A majority of the members of the Committee shall constitute a quorum, and all actions of 
	 	the Committee shall be taken by a majority of the members present. Any action may be taken by a written instrument signed by all of the members of the Committee and any action so taken shall be fully effective as if it had been taken at a meeting. 
	 
	(d)      	Subject to the provisions of this Plan and any Applicable Laws, and with a view to effecting its purpose, the Committee shall have sole authority, in its absolute discretion, to: 
	 
	 	(i)          	construe and interpret this Plan;
	 
	 	(ii)  	define the terms used in the Plan; 
	 
	 	(ii)  	prescribe, amend and rescind the rules and regulations relating to this Plan; 
	 
	 	(iv) 	correct any defect, supply any omission or reconcile any inconsistency in this Plan; 
	 
	 	(v)  	grant Options under this Plan; 
	 
	 	(vi) 	determine the individuals to whom Options shall be granted under this Plan and whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option; 
	 
	 	(vi)  	determine the time or times at which Options shall be granted under this Plan; 
	 
	 	(viii) 	determine the number of common shares subject to each Option, the exercise price of each Option, the duration of each Option and the times at which each Option shall become exercisable; 
	 
	 	(ix) 	determine all other terms and conditions of the Options; and  
	 
	 	(x)  	make all other determinations and interpretations necessary and advisable for the administration of the Plan. 
	 
	(e)      	All decisions, determinations and interpretations made by the Committee shall be binding and conclusive on all participants in the Plan and on their legal representatives, heirs and beneficiaries. 
	 

- 3 -

	6.         GRANTING OF OPTIONS

	(a)      	Subject to Section 7 hereof, the Company may, from time to time, designate: the officers, employees, consultants and/or directors of any of the Companies to whom Options may be granted; the number of Shares covered by an Option; the relevant Exercise Price of an Option; the vesting provisions of an Option; and the term of an Option. 
	 
	(b)      	An Incentive Stock Option shall not be granted to a director or consultant of any of the Companies unless, as of the Date of Grant, such director or consultant is also an officer or key employee of any of the Companies and also a U.S. resident. 
	 
	(c)      	An Incentive Stock Option shall not be granted to a Ten Percent Shareholder except on such terms concerning the Exercise Price and period of exercise as are provided in Section 7 with respect to such a person. 
	 
	(d)      	Any Option granted under the Plan shall be subject to the requirement that, if at any time counsel to the Company shall determine that the listing, registration or qualification of the Shares subject to such Option upon any securities exchange or other self-regulatory entity or under any law or regulation of any jurisdiction, or the consent or approval of any securities exchange or other self-regulatory entity or any governmental or regulatory body, is necessary as a condition of, or in connection with, the grant or exercise of such option or the issuance or purchase of Shares hereunder, such option may not be accepted or exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Board. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration, qualification, consent or approval. 
	 

7.         OPTION AGREEMENTS AND TERMS

Each Option shall be granted within ten (10) years of the date on which the Plan is adopted by the Board or the date the Plan is approved by the shareholders of the Company, whichever is earlier. Each Option shall be evidenced by an option agreement that shall be executed on behalf of the Company and by the respective Optionee ("Option Agreement"), in such form not inconsistent with the Plan as the Board or the Committee may from time to time determine, provided that the substance of this Section 7 be included therein. The terms of each Option Agreement shall be consistent with the following:

	(a)      	Exercise Price. In the case of a Non-Qualified Option, the Exercise Price per Share shall not be less than eighty-five percent (85%) of the Value of such Share on the Date of Grant. In the case of an Incentive Stock Option, the Exercise Price per share shall not be less than one hundred percent (100%) of the Value of such Share on the Date of Grant; provided that with respect to any Incentive Stock Options granted to a Ten Percent Shareholder, the Exercise Price per Share shall not be less than one hundred ten percent (110%) of the Value of such Share on the Date of Grant. 
	 
	(b)      	Restriction on Transferability. No Option granted hereunder shall be pledged, hypothecated, charged, transferred, assigned or otherwise encumbered or disposed of by the Optionee, whether voluntarily or by operation of law, otherwise than by will or the laws of descent and distribution, and any attempt to do so will cause such Option to 
	 

- 4 -

	 	
be null and void. During the lifetime of the Optionee, an Option shall be exercisable only by him. Upon the death of an Optionee, the person to whom the rights shall have passed by will or by the laws of descent and
distribution may exercise any Option in accordance with the provisions of Section 7(e).	
	 
	
(c)      		
Payment. Full payment for Shares purchased upon the exercise of an Option shall be made in cash or by wire transfer (at the option of the Optionee), certified check, cashier's
check, personal check or "cashless exercise" (i.e., the Company's retention of that number of Shares acquired by the Optionee on exercise, which, at the time of exercise, has
an aggregate fair market value equal to the payment owed by the Optionee to the Company under this Section 7(c)). Upon the exercise of an Option, the Company shall have the right to require the Optionee to remit to the Company, in cash or by wire
transfer, certified check, cashier's check or personal check, an amount sufficient to satisfy all U.S. federal, state and local withholding tax requirements prior to the delivery by the Company of any certificate for Shares.	
	 
	
(d)      		
Issuance of Certificates. Upon payment of the Exercise Price, a certificate for the number of Shares shall be delivered to such Optionee by the Company. If listed on a national
securities exchange or quoted on the OTC BB, the Company shall not be obligated to deliver any certificates for Shares until (A)(i) such Shares have been listed (or authorized for listing upon official notice of issuance) on each securities exchange
upon which the outstanding Shares at the time are listed or (ii) if the outstanding Shares are quoted on the OTC BB, such Shares have been approved for quotation thereon and (B) there has been compliance with such laws or regulations as the Company
may deem applicable. The Company shall use commercially reasonable efforts to effect such listing or reporting and compliance as promptly as practical.	
	 
	
(e)      		
Vesting Provisions. No Option shall be exercisable until it has vested. The vesting schedule for each Option shall be specified by the Committee at the time of grant of the
Option.	
	 
	 	
The Committee may specify a vesting schedule for all or any portion of an Option based on the achievement of performance objectives established in advance of the commencement by the Optionee of services related to the
achievement of the performance objectives. Performance objectives shall be expressed in terms of objective criteria, including but not limited to, one or more of the following: return on equity, return on assets, share price, market share, sales,
earnings per share, costs, net earnings, net worth, inventories, cash and cash equivalents, gross margin or the Company’s performance relative to its internal business plan. Performance objectives may be in respect of the performance of the
Company as a whole (whether on a consolidated or unconsolidated basis), or the Companies, or a subdivision, operating unit, product or product line of either of the foregoing. Performance objectives may be absolute or relative and may be expressed
in terms of a progression or a range. An Option that is exercisable (in full or in part) upon the achievement of one or more performance objectives may be exercised only following written notice to the Optionee and the Company by the Committee that
the performance objective has been achieved.	
	 
	 	
The vesting of one or more outstanding Options may be accelerated by the Committee at such times and in such amounts as it shall determine in its sole discretion.	
	 

- 5 -

	
(f)      		
Periods of Exercise of Options. An Option shall be exercisable as may be stated in the Option Agreement, provided that:	
	 
	 	
(i)      		
Incentive Stock Options shall be subject to the limitation set forth in Section 8;	
	 
	 	
(iii)      		
if an Optionee ceases to be employed by, or ceases to serve as an officer or director of, at least one of the Companies for any reason other than death, disability or termination for cause, any Option or unexercised portion
thereof shall not be exercisable by such Optionee after three months from the date the Optionee ceases to be employed by, or ceases to serve as an officer or director of, at least one of the Companies;	
	 
	 	
(iv)      		
if an Optionee ceases to be employed by, or ceases to serve as an officer or director of, at least one of the Companies, and such employment or service was terminated for cause, any Option or unexercised portion thereof
shall terminate forthwith;	
	 
	 	
(v)      		
if an Optionee ceases to be employed by, or ceases to serve as an officer or director of, at least one of the Companies due to disability, any Option or unexercised portion thereof shall not be exercisable by such Optionee
after one year from the date the Optionee ceases to be employed by, or ceases to serve as an officer, consultant or director of, at least one of the Companies; and	
	 
	 	
(vi)      		
if an Optionee ceases to be employed by, or ceases to serve as an officer, consultant or director of, one or more of the Companies due to death, any Option or unexercised portion thereof shall not be exercisable after one
year from the date of death; provided that in such event, the person to whom the rights of the Optionee shall have passed by will or by the laws of descent and distribution may exercise any of the decedent's Options to the extent determined by the
Company in its discretion, even if the date of exercise is within any time period before or after which such Option would not be exercisable under the Plan.	
	 
	
(g)      		
Date of Exercise. The date of exercise of an Option shall be the date on which written notice of exercise is hand delivered or faxed to the Company, attention: Secretary;
provided that the Company shall not be obliged to deliver any certificates for Shares pursuant to the exercise of an Option until the Optionee shall have made full payment for such Shares in accordance with Section 7(c). Each such exercise shall be
irrevocable when given. Each notice of exercise must state whether the Optionee is exercising an Incentive Stock Option or a Non-Qualified Option and must include a statement of preference as to the manner in which payment to the Company shall be
made (cash, wire transfer, certified check, cashier's check or personal check). Moreover, if required by the Board or Committee by notification to the Optionee at the time of granting of the option, it shall be a condition of such exercise that the
Optionee represent that he is purchasing the Shares in respect of which the Option is being exercised for investment only and not with a view to resale or distribution.	
	 
	
(h)      		
Termination of Status. For the purposes of the Plan, a transfer of an employee, officer, consultant or director between two companies, each of which is a company considered to
be either a parent of the Company within the meaning of Section 424(e) of the Code	
	 

- 6 -

	 	or a subsidiary of the Company within the meaning of Section 424(f) of the Code, shall not be deemed a termination of employment or of service as an employee, officer, consultant or director. 
	 
	(i)      	No Relation between Incentive Stock Options and Non-Qualified Options. The grant, exercise, termination or expiration of any Incentive Stock Option granted to an Optionee shall have no effect upon any Non-Qualified Option held by such Optionee, nor shall the grant, exercise, termination or expiration of any Non- Qualified Option granted to an Optionee have any effect upon any Incentive Stock Option held by such Optionee. 
	 
	(j)      	Securities Regulation and Tax Withholding. Common shares shall not be issued with respect to an Option unless the exercise of such Option and the issuance and delivery of such common shares shall comply with all Applicable Laws, and such issuance shall be further subject to the approval of counsel for the Company with respect to such compliance, including the availability of an exemption from prospectus and registration requirements for the issuance and sale of such common shares. The inability of the Company to obtain from any regulatory body the authority deemed by the Company to be necessary for the lawful issuance and sale of any common shares under this Plan, or the unavailability of an exemption from prospectus and registration requirements for the issuance and sale of any common shares under this Plan, shall relieve the Company of any liability with respect to the non-issuance or sale of such common shares. 
	 
	 	As a condition to the exercise of an Option, the Committee may require the Optionee to represent and warrant in writing at the time of such exercise that the common shares are being purchased only for investment and without any then-present intention to sell or distribute such common shares. If necessary under Applicable Laws, the Committee may cause a stop-transfer order against such common shares to be placed on the stock books and records of the Company, and a legend indicating that the common shares may not be pledged, sold or otherwise transferred unless an opinion of counsel is provided stating that such transfer is not in violation of any Applicable Laws, may be stamped on the certificates representing such common shares in order to assure an exemption from registration. The Committee also may require such other documentation as may from time to time be necessary to comply with applicable securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF OPTIONS OR THE COMMON SHARES ISSUABLE UPON THE EXERCISE OF OPTIONS. 
	 

8.         LIMITATION ON EXERCISE OF INCENTIVE STOCK OPTIONS

The aggregate fair market value (determined as of the Date of Grant) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year under the Plan (and any other plan of his employer corporation and its parent and subsidiary corporations, as defined respectively in Sections 424(e) and (f) of the Code), shall not exceed One Hundred Thousand Dollars in U.S. funds (US $100,000). Accordingly, to the extent that the aggregate fair market value (determined as of the Date of Grant) of the Shares with respect to which Incentive Stock Options (determined without reference to this Section 8) are exercisable for the first time by an Optionee during any calendar year under this Plan (and any other plan of his employer corporation and its parent and subsidiary corporations, as defined respectively in Sections 424(e) and (f) of the Code) exceeds One Hundred Thousand Dollars in U.S. funds (US $100,000), such Options will be treated as Nonqualified Options (i.e., options

- 7 -

which fail to qualify as incentive stock options within the meaning of Section 422 of the Code) in accordance with Section 422(d) of the Code.

	9.         RIGHTS AS A SHAREHOLDER

The Optionee (or his personal representatives or legatees) shall have no rights whatsoever as a shareholder in respect of any Shares covered by his option until the date of issuance of a share certificate to him (or his personal representatives or legatees) for such Shares. Without in any way limiting the generality of the foregoing, no adjustment shall be made for dividends or other rights for which the record date is prior to the date such share certificate is issued.

	10.         CHANGES IN CAPITALIZATION

In the event of a stock dividend, stock split, recapitalization, combination, subdivision, issuance of rights to all stockholders, or other similar corporate change, the Company shall make such adjustment in the aggregate number of Shares that may be issued under the Plan, and the number of Shares subject to, and the Exercise Price of, each then-outstanding Option, as it, in its sole and absolute discretion, deems appropriate.

11.         MERGERS, DISPOSITIONS AND CERTAIN OTHER TRANSACTIONS

If during the term of any Option, the Company shall be merged into or consolidated with or otherwise combined with another person or entity, or substantially all of the property or stock of the Company is acquired by another person or entity, or there is a divisive reorganization, spinoff or liquidation or partial liquidation of the Company ("Reorganization"), the Company may choose to take no action with regard to the Options outstanding or to take any of the following courses of action:

	(a)      	The Company may provide in any agreement with respect to any such Reorganization that the surviving, new or acquiring corporation shall grant options to the Optionees to acquire shares in such corporation with respect to which the excess of the fair market value of the shares of such corporation subject to such options immediately after the consummation of such Reorganization over the aggregate exercise price of such options shall not be greater than the excess of the aggregate value of the Shares over the aggregate Exercise Price of the Options immediately prior to the consummation of such Reorganization; and that the grant of such options after the consummation of such Reorganization would not give the Optionees any additional benefits that the Optionees did not have before the consummation of such Reorganization; or 
	 
	(b)      	If the Board shall determine that such action is reasonable under the circumstances, it may give each Optionee the right, immediately prior to the consummation of such Reorganization, to exercise his Options in whole or in part, without regard to any restrictions on the time of exercise otherwise imposed pursuant to Section 7(e) of the Plan, or the Board may take such other action as it shall determine to be reasonable under the circumstances in order to permit Optionees to realize the value of rights granted to them under the Plan. 
	 

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12.         PLAN NOT TO AFFECT EMPLOYMENT

Neither the Plan nor any Option granted thereunder shall confer upon any employee, officer, consultant or director of any of the Companies any right to continue in the employment or service of any of the Companies.

	13.         INTERPRETATION

The Board or the Committee shall have the power to interpret the Plan and to adopt, amend and rescind rules for putting the Plan into effect and administering it. The administration, interpretation, construction and application of the Plan and any provisions thereof made by the Board or the Committee shall be final and binding on all Optionees and on any other persons eligible under the provisions of the Plan to participate therein. No member of the Board or Committee shall be liable for any action taken or for any determination made in good faith in connection with the administration, interpretation, construction or application of the Plan. It is intended that the Incentive Stock Options shall constitute incentive stock options within the meaning of Section 422 of the Code, that the Non-Qualified Options shall constitute property subject to U.S. Federal income tax at exercise pursuant to the provisions of Section 83 of the Code, and that the Plan shall qualify for the exemption available under Rule 16b-3. The provisions of the Plan shall be interpreted and applied insofar as possible to carry out such intent.

14.         AMENDMENT OR DISCONTINUANCE OF THE PLAN

The Board may, subject to regulatory approval as may be necessary, amend or discontinue the Plan at any time, provided, however, that no such amendment may materially and adversely affect any option rights previously granted to an Optionee under the Plan without the written consent of the Optionee or other person then entitled to exercise such Option, except to the extent required by law or by the regulations, rules, by-laws or policies of any regulatory authority or stock exchange. However, any amendment of this Plan that would (a) increase or decrease the number of Shares that may be issued pursuant to Options granted under this Plan or (b) modify the requirements as to eligibility for participation in this Plan, shall be effective only if such amendment is approved by the shareholders of the Company within twelve months before or after the date on which such amendment is adopted by the Board and, if required, is also approved by any securities and stock exchange regulatory authorities having jurisdiction over the Shares.

	15.         SECURITIES LAWS

The Company shall have the power to make each grant under the Plan subject to such conditions as it deems necessary or appropriate to comply with the then existing rules and regulations of the Securities and Exchange Commission and the applicable laws and regulations of any other jurisdiction.

16.         EFFECTIVE DATE AND TERM OF PLAN

The Plan shall become effective on the date the Plan is adopted by the Board, and, unless sooner terminated by the Board, shall expire on the date that is ten years after the date on which the Plan is adopted by the Board or the date the Plan is approved by the Company's shareholders, whichever is earlier ("Expiration Date"). No Option granted under the Plan shall become exercisable unless and until the Plan shall have been approved by the Company's

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shareholders within twelve months before or after the date the Plan is adopted by the Board, and no Option may be granted under the Plan following the Expiration Date.

17.         NO OBLIGATIONS TO EXERCISE OPTION

The grant of an Option shall impose no obligation upon the Optionee to exercise such Option.

18.         NO RIGHT TO OPTIONS OR TO EMPLOYMENT

Whether or not any Options are to be granted under this Plan shall be exclusively within the discretion of the Committee, and nothing contained in this Plan shall be construed as giving any person any right to participate under this Plan. The grant of an Option shall in no way constitute any form of agreement or understanding binding on the Company or the Companies, express or implied, that the Company or the Companies will employ or contract with an Optionee for any length of time, nor shall it interfere in any way with the Company’s or, where applicable, the Companies’ right to terminate Optionee’s employment at any time, which right is hereby reserved.

19.         INDEMNIFICATION OF COMMITTEE

In addition to all other rights of indemnification they may have as members of the Board, members of the Committee shall be indemnified by the Company for all reasonable expenses and liabilities of any type or nature, including attorneys’ fees, incurred in connection with any action, suit or proceeding to which they or any of them are a party by reason of, or in connection with, this Plan or any Option granted under this Plan, and against all amounts paid by them in settlement thereof (provided that such settlement is approved by independent legal counsel selected by the Company), except to the extent that such expenses relate to matters for which it is adjudged that such Committee member is liable for wilful misconduct; provided, that within fifteen (15) days after the institution of any such action, suit or proceeding, the Committee member involved therein shall, in writing, notify the Company of such action, suit or proceeding, so that the Company may have the opportunity to make appropriate arrangements to prosecute or defend the same.

	20.         GOVERNING LAW

The Plan and all matters to which reference is made herein shall be governed by and interpreted in accordance with the laws of Nevada, provided that, notwithstanding such choice of law, the federal laws of the United States shall be applicable herein to the extent specified or to the extent compliance with such laws is mandatory.

By order of the Board of Directors of CYBERMESH INTERNATIONAL CORPORATION

	Dated: this 24th day of September, 2008

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