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                                                                    Exhibit 10.1

                             SHANDA HOLDINGS LIMITED
                            2003 STOCK INCENTIVE PLAN

1.  PURPOSE OF PLAN

         The purpose of the Shanda Holdings Limited 2003 Stock Incentive Plan
         (this "PLAN") is to promote the success of the Corporation and to
         increase stockholder value by providing an additional means through the
         grant of awards to attract, motivate, retain and reward selected
         employees and other eligible persons of the Company. As used herein,
         "CORPORATION" means Shanda Holdings Limited, an international business
         company formed under the laws of the British Virgin Islands;
         "SUBSIDIARY" means any corporation or other entity a majority of whose
         outstanding voting stock or voting power is beneficially owned directly
         or indirectly by the Corporation; "COMPANY" means the Corporation and
         its Subsidiaries, collectively; and "BOARD" means the Board of
         Directors of the Corporation.

2.  ELIGIBILITY

         The Administrator (as such term is defined in Section 3.1) may grant
         awards under this Plan only to those persons that the Administrator
         determines to be Eligible Persons. An "ELIGIBLE PERSON" is any person
         who is either: (a) an officer (whether or not a director) or employee
         of the Company; (b) a director of the Company; or (c) an individual
         consultant or advisor who renders or has rendered bona fide services
         (other than services in connection with the offering or sale of
         securities of the Company in a capital-raising transaction or as a
         market maker or promoter of the Company's securities) to the Company
         and who is selected to participate in this Plan by the Administrator.
         Notwithstanding the foregoing, a person who is otherwise an Eligible
         Person under clause (c) above may participate in this Plan only if such
         participation would not compromise the Corporation's ability to rely on
         Rule 701 to exempt from registration under the Securities Act of 1933,
         as amended (the "SECURITIES ACT"), or use Form S-8 to register under
         the Securities Act, the offering and sale of shares issuable under this
         Plan by the Corporation or the Corporation's compliance with any other
         applicable laws. An Eligible Person who has been granted an award (a
         "participant") may, if otherwise eligible, be granted additional awards
         if the Administrator shall so determine.

3.  PLAN ADMINISTRATION

         3.1      THE ADMINISTRATOR. This Plan shall be administered by and all
                  awards under this Plan shall be authorized by the
                  Administrator. The "ADMINISTRATOR" means the Board or one or
                  more committees appointed by the Board or another committee
                  (within its delegated authority) to administer all or certain
                  aspects of this Plan. Any such committee shall be comprised
                  solely of one or more directors or such number of directors as
                  may be required under applicable law. A committee may delegate
                  some or all of its authority to another committee so
                  constituted. Unless otherwise provided in the Restated
                  Memorandum and Articles/Memorandum and Articles of Association
                  of the Corporation or the applicable charter of any
                  Administrator: (a) a majority of the members of the acting
                  Administrator shall constitute a quorum, and (b) the vote of a
                  majority of the members present assuming the presence of a

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                  quorum or the unanimous written consent of the members of the
                  Administrator shall constitute action by the acting
                  Administrator.

                  With respect to awards intended to satisfy the requirements
                  for performance-based compensation under Section 162(m) of the
                  United States Internal Revenue Code of 1986, as amended (the
                  "CODE"), this Plan shall be administered by a committee
                  consisting solely of two or more outside directors (as this
                  requirement is applied under Section 162(m) of the Code);
                  provided, however, that the failure to satisfy such
                  requirement shall not affect the validity of the action of any
                  committee otherwise duly authorized and acting in the matter.
                  To the extent required by any applicable listing agency, this
                  Plan shall be administered by a committee composed entirely of
                  independent directors (within the meaning of the applicable
                  listing agency).

         3.2      POWERS OF THE ADMINISTRATOR. Subject to the express provisions
                  of this Plan, the Administrator is authorized and empowered to
                  do all things necessary or desirable in connection with the
                  authorization of awards and the administration of this Plan
                  (in the case of a committee, within the authority delegated to
                  that committee or person(s)), including, without limitation,
                  the authority to:

                  (a)      determine eligibility and, from among those persons
                           determined to be eligible, the particular Eligible
                           Persons who will receive an award under this Plan;

                  (b)      grant awards to Eligible Persons, determine the price
                           at which securities will be offered or awarded and
                           the number of securities to be offered or awarded to
                           any of such persons, determine the other specific
                           terms and conditions of such awards consistent with
                           the express limits of this Plan, establish the
                           installments (if any) in which such awards shall
                           become exercisable or shall vest (which may include,
                           without limitation, performance and/or time-based
                           schedules), or determine that no delayed
                           exercisability or vesting is required, establish any
                           applicable performance targets, and establish the
                           events of termination or reversion of such awards;

                  (c)      approve the forms of award agreements (which need not
                           be identical either as to type of award or among
                           participants);

                  (d)      construe and interpret this Plan and any agreements
                           defining the rights and obligations of the Company
                           and participants under this Plan, further define the
                           terms used in this Plan, and prescribe, amend and
                           rescind rules and regulations relating to the
                           administration of this Plan or the awards granted
                           under this Plan;

                  (e)      cancel, modify, or waive the Corporation's rights
                           with respect to, or modify, discontinue, suspend, or
                           terminate any or all outstanding awards, subject to
                           any required consent under Section 8.6.5;

                  (f)      accelerate or extend the vesting or exercisability or
                           extend the term of any or all such outstanding awards
                           (in the case of options or stock appreciation
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                           rights, within the maximum ten-year term of such
                           awards) in such circumstances as the Administrator
                           may deem appropriate (including, without limitation,
                           in connection with a termination of employment or
                           services or other events of a personal nature)
                           subject to any required consent under Section 8.6.5;

                  (g)      adjust the number of shares of Common Stock subject
                           to any award, adjust the price of any or all
                           outstanding awards or otherwise change previously
                           imposed terms and conditions, in such circumstances
                           as the Administrator may deem appropriate, in each
                           case subject to Sections 4 and 8.6, and provided that
                           in no case (except due to an adjustment contemplated
                           by Section 7 or any repricing that may be approved by
                           stockholders) shall such an adjustment constitute a
                           repricing (by amendment, cancellation and regrant,
                           exchange or other means) of the per share exercise or
                           base price of any option or stock appreciation right
                           to a price that is less than the fair market value of
                           a share (as adjusted pursuant to Section 7) on the
                           date of the grant of the initial award;

                  (h)      determine the date of grant of an award, which may be
                           a designated date after but not before the date of
                           the Administrator's action (unless otherwise
                           designated by the Administrator, the date of grant of
                           an award shall be the date upon which the
                           Administrator took the action granting an award);

                  (i)      determine whether, and the extent to which,
                           adjustments are required pursuant to Section 7 hereof
                           and authorize the termination, conversion,
                           substitution or succession of awards upon the
                           occurrence of an event of the type described in
                           Section 7;

                  (j)      acquire or settle (subject to Sections 7 and 8.6)
                           rights under awards in cash, stock of equivalent
                           value, or other consideration; and

                  (k)      determine the fair market value of the Common Stock
                           or awards under this Plan from time to time and/or
                           the manner in which such value will be determined.

         3.3      BINDING DETERMINATIONS. Any action taken by, or inaction of,
                  the Corporation, any Subsidiary, or the Administrator relating
                  or pursuant to this Plan and within its authority hereunder or
                  under applicable law shall be within the absolute discretion
                  of that entity or body and shall be conclusive and binding
                  upon all persons. Neither the Board nor any Board committee,
                  nor any member thereof or person acting at the direction
                  thereof, shall be liable for any act, omission,
                  interpretation, construction or determination made in good
                  faith in connection with this Plan (or any award made under
                  this Plan), and all such persons shall be entitled to
                  indemnification and reimbursement by the Company in respect of
                  any claim, loss, damage or expense (including, without
                  limitation, attorneys' fees) arising or resulting therefrom to
                  the fullest extent permitted by law and/or under any directors
                  and officers liability insurance coverage that may be in
                  effect from time to time.

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         3.4      RELIANCE ON EXPERTS. In making any determination or in taking
                  or not taking any action under this Plan, the Board or a
                  committee, as the case may be, may obtain and may rely upon
                  the advice of experts, including employees and professional
                  advisors to the Corporation. No director, officer or agent of
                  the Company shall be liable for any such action or
                  determination taken or made or omitted in good faith.

         3.5      DELEGATION.  The Administrator may delegate ministerial,
                  non-discretionary functions to individuals who are officers or
                  employees of the Company or to third parties.

4. SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS

         4.1      SHARES AVAILABLE. Subject to the provisions of Section 7.1,
                  the capital stock that may be delivered under this Plan shall
                  be shares of the Corporation's authorized but unissued Common
                  Stock and any shares of its Common Stock held as treasury
                  shares. For purposes of this Plan, "COMMON STOCK" shall mean
                  the common stock of the Corporation and such other securities
                  or property as may become the subject of awards under this
                  Plan, or may become subject to such awards, pursuant to an
                  adjustment made under Section 7.1.

         4.2      SHARE LIMITS. The maximum number of shares of Common Stock
                  that may be delivered pursuant to awards granted to Eligible
                  Persons under this Plan (the "SHARE LIMIT") is equal to
                  13,309,880 shares. The following limits also apply with
                  respect to awards granted under this Plan:

                  (a)      The maximum number of shares of Common Stock that may
                           be delivered pursuant to options qualified as
                           incentive stock options granted under this Plan is
                           6,000,000 shares.

                  (b)      The maximum number of shares of Common Stock subject
                           to those options and stock appreciation rights that
                           are granted during any calendar year to any
                           individual under this Plan is 3,500,000 shares.

                  (c)      The maximum number of shares of Common Stock subject
                           to all awards that are granted during any calendar
                           year to any individual under this Plan is 3,500,000
                           shares. This limit does not apply, however, to shares
                           delivered in respect of compensation earned but
                           deferred.

                  (d)      The maximum number of shares of Common Stock that may
                           be delivered pursuant to awards granted under this
                           Plan, other than pursuant to stock option and stock
                           appreciation right grants, is 8,000,000 shares. This
                           limit does not apply, however, to shares delivered in
                           respect of compensation earned but deferred.

                  (e)      Additional limits with respect to Performance-Based
                           Awards are set forth in Section 5.2.3.

                  Each of the foregoing numerical limits is subject to
                  adjustment as contemplated by Section 4.3, Section 7.1, and
                  Section 8.10.

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         4.3      AWARDS SETTLED IN CASH, REISSUE OF AWARDS AND SHARES. To the
                  extent that an award is settled in cash or a form other than
                  shares of Common Stock, the shares that would have been
                  delivered had there been no such cash or other settlement
                  shall not be counted against the shares available for issuance
                  under this Plan. In the event that shares are delivered in
                  respect of a dividend equivalent, stock appreciation right, or
                  other award, only the actual number of shares delivered with
                  respect to the award shall be counted against the share limits
                  of this Plan. Shares that are subject to or underlie awards
                  which expire or for any reason are cancelled or terminated,
                  are forfeited, fail to vest, or for any other reason are not
                  paid or delivered under this Plan shall again be available for
                  subsequent awards under this Plan. Shares that are exchanged
                  by a participant or withheld by the Corporation as full or
                  partial payment in connection with any award under this Plan,
                  as well as any shares exchanged by a participant or withheld
                  by the Company to satisfy the tax withholding obligations
                  related to any award under this Plan, shall be available for
                  subsequent awards under this Plan. Refer to Section 8.10 for
                  application of the foregoing share limits with respect to
                  assumed awards. The foregoing adjustments to the share limits
                  of this Plan are subject to any applicable limitations under
                  Section 162(m) of the Code with respect to awards intended as
                  performance-based compensation thereunder.

         4.4      RESERVATION OF SHARES; NO FRACTIONAL SHARES; MINIMUM ISSUE.
                  The Corporation shall at all times reserve a number of shares
                  of Common Stock sufficient to cover the Corporation's
                  obligations and contingent obligations to deliver shares with
                  respect to awards then outstanding under this Plan (exclusive
                  of any dividend equivalent obligations to the extent the
                  Corporation has the right to settle such rights in cash). No
                  fractional shares shall be delivered under this Plan. The
                  Administrator may pay cash in lieu of any fractional shares in
                  settlements of awards under this Plan. No fewer than 100
                  shares may be purchased on exercise of any award (or, in the
                  case of stock appreciation or purchase rights, no fewer than
                  100 rights may be exercised at any one time) unless the total
                  number purchased or exercised is the total number at the time
                  available for purchase or exercise under the award.

5.  AWARDS

         5.1      TYPE AND FORM OF AWARDS. The Administrator shall determine the
                  type or types of award(s) to be made to each selected Eligible
                  Person. Awards may be granted singly, in combination or in
                  tandem. Awards also may be made in combination or in tandem
                  with, in replacement of, as alternatives to, or as the payment
                  form for grants or rights under any other employee or
                  compensation plan of the Company. The types of awards that may
                  be granted under this Plan are:

                  5.1.1 STOCK OPTIONS. A stock option is the grant of a right to
                  purchase a specified number of shares of Common Stock during a
                  specified period as determined by the Administrator. An option
                  may be intended as an incentive stock option within the
                  meaning of Section 422 of the Code (an "ISO") or a
                  nonqualified stock option (an option not intended to be an
                  ISO). The award agreement for an option will indicate if the
                  option is intended as an ISO, otherwise it will be deemed to
                  be a nonqualified stock option. The maximum

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                  term of each option (ISO or nonqualified) shall be ten (10)
                  years. The per share exercise price for each option shall be
                  not less than 100% of the fair market value of a share of
                  Common Stock on the date of grant of the option, except as
                  follows: (a) in the case of a stock option granted
                  retroactively in tandem with or as a substitution for another
                  award, the per share exercise price may be no lower than the
                  fair market value of a share of Common Stock on the date such
                  other award was granted (to the extent consistent with
                  Sections 422 and 424 of the Code in the case of options
                  intended as incentive stock options); and (b) in any other
                  circumstances, a nonqualified stock option may be granted with
                  a per share exercise price that is less than the fair market
                  value of a share of Common Stock on the date of grant,
                  provided that such exercise price shall not be less than the
                  per share purchase price of the Series A Preferred Stock of
                  the Corporation; and provided further that any shares
                  delivered in respect of such option shall be charged against
                  the limit of Section 4.2(d) (the limit on full-value awards)
                  as well as any other applicable limit under Section 4.2. When
                  an option is exercised, the exercise price for the shares to
                  be purchased shall be paid in full in cash or such other
                  method permitted by the Administrator consistent with
                  Section 5.5.

                  5.1.2  ADDITIONAL RULES APPLICABLE TO ISOS. To the extent that
                  the aggregate fair market value (determined at the time of
                  grant of the applicable option) of stock with respect to which
                  ISOs first become exercisable by a participant in any calendar
                  year exceeds $100,000, taking into account both Common Stock
                  subject to ISOs under this Plan and stock subject to ISOs
                  under all other plans of the Company (or any parent or
                  predecessor corporation to the extent required by and within
                  the meaning of Section 422 of the Code and the regulations
                  promulgated thereunder), such options shall be treated as
                  nonqualified stock options. In reducing the number of options
                  treated as ISOs to meet the $100,000 limit, the most recently
                  granted options shall be reduced first. To the extent a
                  reduction of simultaneously granted options is necessary to
                  meet the $100,000 limit, the Administrator may, in the manner
                  and to the extent permitted by law, designate which shares of
                  Common Stock are to be treated as shares acquired pursuant to
                  the exercise of an ISO. ISOs may only be granted to employees
                  of the Corporation or one of its subsidiaries (for this
                  purpose, the term "subsidiary" is used as defined in Section
                  424(f) of the Code, which generally requires an unbroken chain
                  of ownership of at least 50% of the total combined voting
                  power of all classes of stock of each subsidiary in the chain
                  beginning with the Corporation and ending with the subsidiary
                  in question). There shall be imposed in any award agreement
                  relating to ISOs such other terms and conditions as from time
                  to time are required in order that the option be an "incentive
                  stock option" as that term is defined in Section 422 of the
                  Code.

                  5.1.3  STOCK APPRECIATION RIGHTS. A stock appreciation right
                  is a right to receive a payment, in cash and/or Common Stock,
                  equal to the excess of the fair market value of a specified
                  number of shares of Common Stock on the date the stock
                  appreciation right is exercised over the fair market value of
                  a share of Common Stock on the date the stock appreciation
                  right was granted (the "base price") as set forth in the
                  applicable award agreement, except as follows: (a) in the case
                  of a stock appreciation right granted retroactively in tandem
                  with or as a substitution for another award, the base price
                  may be no lower than the fair market value of a

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                  share of Common Stock on the date such other award was
                  granted; and (b) in any other circumstances, a stock
                  appreciation right may be granted with a base price that is
                  less than the fair market value of a share of Common Stock on
                  the date of grant, provided that any shares delivered in
                  respect of such award shall be charged against the limit of
                  Section 4.2(d) (the limit on full-value awards) as well as any
                  other applicable limit under Section 4.2. The maximum term of
                  a stock appreciation right shall be ten (10) years. The
                  Administrator may grant limited stock appreciation rights
                  which are exercisable only upon a change in control or other
                  specified event and may be payable based on the spread between
                  the base price of the stock appreciation right and the fair
                  market value of a share of Common Stock during a specified
                  period or at a specified time within a specified period
                  before, after or including the date of such event.

                  5.1.4  OTHER AWARDS. The other types of awards that may be
                  granted under this Plan include: (a) stock bonuses, restricted
                  stock, performance stock, stock units, phantom stock, dividend
                  equivalents, or similar rights to purchase or acquire shares,
                  whether at a fixed or variable price or ratio related to the
                  Common Stock, upon the passage of time, the occurrence of one
                  or more events, or the satisfaction of performance criteria or
                  other conditions, or any combination thereof; (b) any similar
                  securities with a value derived from the value of or related
                  to the Common Stock and/or returns thereon; or (c) cash awards
                  granted consistent with Section 5.2 below.

         5.2      SECTION 162(m) PERFORMANCE-BASED AWARDS. Without limiting the
                  generality of the foregoing, any of the types of awards listed
                  in Section 5.1.4 above may be, and options and stock
                  appreciation rights granted with an exercise or base price not
                  less than the fair market value of a share of Common Stock at
                  the date of grant ("QUALIFYING OPTIONS" and "QUALIFYING STOCK
                  APPRECIATION RIGHTS," respectively) typically will be, granted
                  as awards intended to satisfy the requirements for
                  "performance-based compensation" within the meaning of Section
                  162(m) of the Code ("PERFORMANCE-BASED AWARDS"). The grant,
                  vesting, exercisability or payment of Performance-Based Awards
                  may depend (or, in the case of Qualifying Options or
                  Qualifying Stock Appreciation Rights, may also depend) on the
                  degree of achievement of one or more performance goals
                  relative to a pre-established targeted level or level using
                  one or more of the Business Criteria set forth below (on an
                  absolute or relative basis) for the Corporation on a
                  consolidated basis or for one or more of the Corporation's
                  subsidiaries, segments, divisions or business units, or any
                  combination of the foregoing. Any Qualifying Option or
                  Qualifying Stock Appreciation Right shall be subject only to
                  the requirements of Section 5.2.1 and 5.2.3 in order for such
                  award to satisfy the requirements for "performance-based
                  compensation" under Section 162(m) of the Award. Any other
                  Performance-Based Award shall be subject to all of the
                  following provisions of this Section 5.2.

                  5.2.1  CLASS; ADMINISTRATOR. The eligible class of persons for
                  Performance-Based Awards under this Section 5.2 shall be
                  officers and employees of the Company. The Administrator
                  approving Performance-Based Awards or making any certification
                  required pursuant to Section 5.2.4 must be constituted as
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                  provided in Section 3.1 for awards that are intended as
                  performance-based compensation under Section 162(m) of the
                  Code.

                  5.2.2  PERFORMANCE GOALS. The specific performance goals for
                  Performance-Based Awards (other than Qualifying Options and
                  Qualifying Stock Appreciation Rights) shall be, on an absolute
                  or relative basis, established based on one or more of the
                  following business criteria ("BUSINESS CRITERIA") as selected
                  by the Administrator in its sole discretion: earnings per
                  share, cash flow (which means cash and cash equivalents
                  derived from either net cash flow from operations or net cash
                  flow from operations, financing and investing activities),
                  total stockholder return, gross revenue, revenue growth,
                  operating income (before or after taxes), net earnings (before
                  or after interest, taxes, depreciation and/or amortization),
                  return on equity or on assets or on net investment, cost
                  containment or reduction, or any combination thereof. These
                  terms are used as applied under generally accepted accounting
                  principles or in the Company's financial reporting. To qualify
                  awards as performance-based under Section 162(m), the
                  applicable Business Criterion (or Business Criteria, as the
                  case may be) and specific performance goal or goals
                  ("targets") must be established and approved by the
                  Administrator during the first 90 days of the performance
                  period (and, in the case of performance periods of less than
                  one year, in no event more than 25% of the performance period
                  has elapsed) and while performance relating to such target(s)
                  remains substantially uncertain within the meaning of Section
                  162(m) of the Code. Performance targets shall be adjusted to
                  mitigate the unbudgeted impact of material, unusual or
                  nonrecurring gains and losses, accounting changes or other
                  extraordinary events not foreseen at the time the targets were
                  set unless the Administrator provides otherwise at the time of
                  establishing the targets. The applicable performance
                  measurement period may not be less than three months nor more
                  than 10 years.

                  5.2.3  FORM OF PAYMENT; MAXIMUM PERFORMANCE-BASED AWARD.
                  Grants or awards under this Section 5.2 may be paid in cash or
                  shares of Common Stock or any combination thereof. Grants of
                  Qualifying Options and Qualifying Stock Appreciation Rights to
                  any one participant in any one calendar year shall be subject
                  to the limit set forth in Section 4.2(b). The maximum number
                  of shares of Common Stock which may be delivered pursuant to
                  Performance-Based Awards (other than Qualifying Options and
                  Qualifying Stock Appreciation Rights, and other than cash
                  awards covered by the following sentence) that are granted to
                  any one participant in any one calendar year shall not exceed
                  3,500,000 shares, either individually or in the aggregate,
                  subject to adjustment as provided in Section 7.1. In addition,
                  the aggregate amount of compensation to be paid to any one
                  participant in respect of all Performance-Based Awards payable
                  only in cash and not related to shares of Common Stock and
                  granted to that participant in any one calendar year shall not
                  exceed $2,000,000. Awards that are cancelled during the year
                  shall be counted against these limits to the extent permitted
                  by Section 162(m) of the Code.

                  5.2.4  CERTIFICATION OF PAYMENT. Before any Performance-Based
                  Award under this Section 5.2 (other than Qualifying Options
                  and Qualifying Stock Appreciation Rights) is paid and to the
                  extent required to qualify the award as
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                  performance-based compensation within the meaning of Section
                  162(m) of the Code, the Administrator must certify in writing
                  that the performance target(s) and any other material terms of
                  the Performance-Based Award were in fact timely satisfied.

                  5.2.5  RESERVATION OF DISCRETION. The Administrator will have
                  the discretion to determine the restrictions or other
                  limitations of the individual awards granted under this
                  Section 5.2 including the authority to reduce awards, payouts
                  or vesting or to pay no awards, in its sole discretion, if the
                  Administrator preserves such authority at the time of grant by
                  language to this effect in its authorizing resolutions or
                  otherwise.

                  5.2.6  EXPIRATION OF GRANT AUTHORITY. As required pursuant to
                  Section 162(m) of the Code and the regulations promulgated
                  thereunder, the Administrator's authority to grant new awards
                  that are intended to qualify as performance-based compensation
                  within the meaning of Section 162(m) of the Code (other than
                  Qualifying Options and Qualifying Stock Appreciation Rights)
                  shall terminate upon the first meeting of the Corporation's
                  stockholders that occurs in the fifth year following the year
                  in which the Corporation's stockholders first approve this
                  Plan.

         5.3      AWARD AGREEMENTS. Each award shall be evidenced by a written
                  award agreement in the form approved by the Administrator and
                  executed on behalf of the Corporation and, if required by the
                  Administrator, executed by the recipient of the award. The
                  Administrator may authorize any officer of the Corporation
                  (other than the particular award recipient) to execute any or
                  all award agreements on behalf of the Corporation. The award
                  agreement shall set forth the material terms and conditions of
                  the award as established by the Administrator consistent with
                  the express limitations of this Plan. Notwithstanding the
                  foregoing, unless the Board otherwise expressly provides,
                  subject to continued employment or service to the Company,
                  each option granted under this Plan shall vest and become
                  exercisable as to 25% of the shares subject to the option on
                  each of the first four anniversaries of the date of grant and
                  each restricted stock award granted under this Plan shall vest
                  and become nonforfeitable as to 25% of the shares subject to
                  the award on each of the first four anniversaries of the date
                  of grant.

         5.4      DEFERRALS AND SETTLEMENTS. Payment of awards may be in the
                  form of cash, Common Stock, other awards or combinations
                  thereof as the Administrator shall determine, and with such
                  restrictions as it may impose. The Administrator may also
                  require or permit participants to elect to defer the issuance
                  of shares or the settlement of awards in cash under such rules
                  and procedures as it may establish under this Plan. The
                  Administrator may also provide that deferred settlements
                  include the payment or crediting of interest or other earnings
                  on the deferral amounts, or the payment or crediting of
                  dividend equivalents where the deferred amounts are
                  denominated in shares.

         5.5      CONSIDERATION FOR COMMON STOCK OR AWARDS. The purchase price
                  for any award granted under this Plan or the Common Stock to
                  be delivered pursuant to an award, as applicable, may be paid
                  by means of any lawful consideration as

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                  determined by the Administrator, including, without
                  limitation, one or a combination of the following methods:

                  o   services rendered by the recipient of such award;

                  o   cash, check payable to the order of the Corporation, or
                      electronic funds transfer;

                  o   notice and third party payment in such manner as may be
                      authorized by the Administrator;

                  o   the delivery of previously owned shares of Common Stock;

                  o   by a reduction in the number of shares otherwise
                      deliverable pursuant to the award; or

                  o   subject to such procedures as the Administrator may adopt,
                      pursuant to a "cashless exercise" with a third party who
                      provides financing for the purposes of (or who otherwise
                      facilitates) the purchase or exercise of awards.

                  In no event shall any shares newly-issued by the Corporation
                  be issued for less than the minimum lawful consideration for
                  such shares or for consideration other than consideration
                  permitted by applicable law. In the event that the
                  Administrator allows a participant to exercise an award by
                  delivering shares of Common Stock previously owned by such
                  participant and unless otherwise expressly provided by the
                  Administrator, any shares delivered which were initially
                  acquired by the participant from the Corporation (upon
                  exercise of a stock option or otherwise) must have been owned
                  by the participant at least six months as of the date of
                  delivery. Shares of Common Stock used to satisfy the exercise
                  price of an option shall be valued at their fair market value
                  on the date of exercise. The Corporation will not be obligated
                  to deliver any shares unless and until it receives full
                  payment of the exercise or purchase price therefor and any
                  related withholding obligations under Section 8.5 and any
                  other conditions to exercise or purchase have been satisfied.
                  Unless otherwise expressly provided in the applicable award
                  agreement, the Administrator may at any time eliminate or
                  limit a participant's ability to pay the purchase or exercise
                  price of any award or shares by any method other than cash
                  payment to the Corporation.

         5.6      DEFINITION OF FAIR MARKET VALUE. For purposes of this Plan,
                  "fair market value" shall mean, until such time that the
                  Common Stock is listed or admitted to trade on a national
                  securities exchange, reported on the National Market Reporting
                  System, or bid and asked prices for the Common Stock are
                  furnished by the NASD or a similar organization, the value as
                  established by the Administrator at such time for purposes of
                  this Plan. Thereafter, unless otherwise determined or provided
                  by the Administrator in the circumstances, the last price for
                  a share of Common Stock as furnished by the National
                  Association of Securities Dealers, Inc. ("NASD") through the
                  NASDAQ National Market Reporting System for the date in
                  question or, if there were no sales of Common Stock reported
                  by the NASD on that date, the last price for a share of Common
                  Stock as reported by the NASD

<PAGE>

                  through the NASDAQ National Market Reporting System for the
                  next preceding day on which sales of Common Stock were
                  reported by the NASD. The Administrator may, however, provide
                  with respect to one or more awards (1) if the last price for
                  the date in question is not yet known as of the time of the
                  determination, that the fair market value shall equal the last
                  price of a share of Common Stock as of the immediately
                  preceding trading day, or (2) that the fair market value shall
                  equal the average of the high and low sales prices for a share
                  of Common Stock for the date in question or the most recent
                  trading day. The Administrator also may adopt a different
                  methodology for determining fair market value with respect to
                  one or more awards if a different methodology is necessary or
                  advisable to secure any intended favorable tax, legal or other
                  treatment for the particular award(s) (for example, and
                  without limitation, the Administrator may provide that fair
                  market value for purposes of one or more awards will be based
                  on an average of closing prices (or the average of high and
                  low daily trading prices) for a specified period preceding the
                  relevant date).

         5.7      TRANSFER RESTRICTIONS.

                  5.7.1  LIMITATIONS ON EXERCISE AND TRANSFER. Unless otherwise
                  expressly provided in (or pursuant to) this Section 5.7, by
                  applicable law and by the award agreement, as the same may be
                  amended, (a) all awards are non-transferable and shall not be
                  subject in any manner to sale, transfer, anticipation,
                  alienation, assignment, pledge, encumbrance or charge; (b)
                  awards shall be exercised only by the participant; and (c)
                  amounts payable or shares issuable pursuant to any award shall
                  be delivered only to (or for the account of) the participant.

                  5.7.2  EXCEPTIONS. The Administrator may permit awards to be
                  exercised by and paid to certain persons or entities related
                  to the participant, including but not limited to members of
                  the participant's immediate family, trusts or other entities
                  controlled by or whose beneficiaries or beneficial owners are
                  the participant and/or members of the participant's immediate
                  family, pursuant to such conditions and procedures, including
                  limitations on subsequent transfers, as the Administrator may
                  establish. Consistent with Section 8.1, any permitted transfer
                  shall be subject to the condition that the Administrator
                  receive evidence satisfactory to it that the transfer (a) is
                  being made for essentially donative, estate and/or tax
                  planning purposes on a gratuitous or donative basis and
                  without consideration (other than nominal consideration or in
                  exchange for an interest in a qualified transferee), and (b)
                  will not compromise the Corporation's ability to rely on Rule
                  701, or register shares issuable under this Plan on Form S-8,
                  under the Securities Act. Notwithstanding the foregoing or
                  anything in Section 5.7.3, ISOs and restricted stock awards
                  shall be subject to any and all additional transfer
                  restrictions under the Code to the extent necessary to
                  maintain the intended tax consequences of such awards.

                  5.7.3  FURTHER EXCEPTIONS TO LIMITS ON TRANSFER.  The exercise
                  and transfer restrictions in Section 5.7.1 shall not apply to:

                  (a)      transfers to the Corporation,
<PAGE>

                  (b)      the designation of a beneficiary to receive benefits
                           in the event of the participant's death or, if the
                           participant has died, transfers to or exercise by the
                           participant's beneficiary, or, in the absence of a
                           validly designated beneficiary, transfers by will or
                           the laws of descent and distribution,

                  (c)      subject to any applicable limitations on ISOs,
                           transfers to a family member (or former family
                           member) pursuant to a domestic relations order if
                           approved or ratified by the Administrator,

                  (d)      if the participant has suffered a disability,
                           permitted transfers or exercises on behalf of the
                           participant by his or her legal representative, or

                  (e)      the authorization by the Administrator of "cashless
                           exercise" procedures with third parties who provide
                           financing for the purpose of (or who otherwise
                           facilitate) the exercise of awards consistent with
                           applicable laws and the express authorization of the
                           Administrator.

         5.8      INTERNATIONAL AWARDS. One or more awards may be granted to
                  Eligible Persons who provide services to the Company outside
                  of the United States. If necessary, awards granted to such
                  persons may be granted pursuant to the terms and conditions of
                  any applicable sub-plans, if any, appended to this Plan and
                  approved by the Administrator.

6.  EFFECT OF TERMINATION OF SERVICE ON AWARDS

         6.1      GENERAL. The Administrator shall establish the effect of a
                  termination of employment or service on the rights and
                  benefits under each award under this Plan and in so doing may
                  make distinctions based upon, inter alia, the cause of
                  termination and type of award. Notwithstanding the foregoing,
                  unless the Board expressly otherwise provides, if the
                  participant is not an employee of the Company and provides
                  other services to the Company, the Administrator shall be the
                  sole judge for purposes of this Plan (unless a contract or the
                  award otherwise provides) of whether the participant continues
                  to render services to the Company and the date, if any, upon
                  which such services shall be deemed to have terminated. Unless
                  the Board otherwise expressly provides, (1) to the extent an
                  outstanding option granted under this Plan has not become
                  vested and exercisable on the date the participant's
                  employment by or service to the Company terminates, the option
                  to the extent unvested and unexercisable shall terminate, and
                  (2) any shares subject to a restricted stock award that remain
                  subject to restrictions at the time the participant's
                  employment by or service to the Company terminates shall not
                  vest and the Company shall have the right to reacquire any
                  such unvested shares subject to such award in such manner and
                  on such terms as the Administrator provides, which terms shall
                  include return or repayment of the lower of the Fair Market
                  Value or the original purchase price of the restricted shares,
                  without interest, to the participant to the extent not
                  prohibited by law.

         6.2      EVENTS NOT DEEMED TERMINATIONS OF SERVICE. Unless Company
                  policy or the Administrator otherwise provides, the employment
                  relationship shall not be considered terminated in the case of
                  (a) sick leave, (b) military leave, or (c) any
<PAGE>
                  other leave of absence authorized by the Company or the
                  Administrator; provided that unless reemployment upon the
                  expiration of such leave is guaranteed by contract or law,
                  such leave is for a period of not more than 90 days. In the
                  case of any employee of the Company on an approved leave of
                  absence, continued vesting of the award while on leave from
                  the employ of the Company may be suspended until the employee
                  returns to service, unless the Administrator otherwise
                  provides or applicable law otherwise requires. In no event
                  shall an award be exercised after the expiration of the term
                  set forth in the award agreement.

         6.3      EFFECT OF CHANGE OF SUBSIDIARY STATUS. For purposes of this
                  Plan and any award, if an entity ceases to be a Subsidiary of
                  the Corporation a termination of employment or service shall
                  be deemed to have occurred with respect to each Eligible
                  Person in respect of such Subsidiary who does not continue as
                  an Eligible Person in respect of another entity within the
                  Company after giving effect to the Subsidiary's change in
                  status.

7. ADJUSTMENTS; ACCELERATION

         7.1      ADJUSTMENTS. Upon or in contemplation of: any
                  reclassification, recapitalization, stock split (including a
                  stock split in the form of a stock dividend) or reverse stock
                  split ("stock split"); any merger, combination, consolidation,
                  or other reorganization; any spin-off, split-up, or similar
                  extraordinary dividend distribution in respect of the Common
                  Stock (whether in the form of securities or property); any
                  exchange of Common Stock or other securities of the
                  Corporation, or any similar, unusual or extraordinary
                  corporate transaction in respect of the Common Stock; or a
                  sale of all or substantially all the business or assets of the
                  Corporation as an entirety; then the Administrator shall, in
                  such manner, to such extent (if any) and at such time as it
                  deems appropriate and equitable in the circumstances:

                  (a)      proportionately adjust any or all of (1) the number
                           and type of shares of Common Stock (or other
                           securities) that thereafter may be made the subject
                           of awards (including the specific share limits,
                           maximums and numbers of shares set forth elsewhere in
                           this Plan), (2) the number, amount and type of shares
                           of Common Stock (or other securities or property)
                           subject to any or all outstanding awards, (3) the
                           grant, purchase, or exercise price (which term
                           includes the base price of any stock appreciation
                           right or similar right) of any or all outstanding
                           awards, (4) the securities, cash or other property
                           deliverable upon exercise or payment of any
                           outstanding awards, or (5) (subject to Sections 7.7
                           and 8.8.3(a)) the performance standards applicable to
                           any outstanding awards, or

                  (b)      make provision for a cash payment or for the
                           assumption, substitution or exchange of any or all
                           outstanding share-based awards or the cash,
                           securities or property deliverable to the holder of
                           any or all outstanding share-based awards, based upon
                           the distribution or consideration payable to holders
                           of the Common Stock upon or in respect of such event.
<PAGE>

                  The Administrator may adopt such valuation methodologies for
                  outstanding awards as it deems reasonable in the event of a
                  cash or property settlement and, in the case of options, stock
                  appreciation rights or similar rights, but without limitation
                  on other methodologies, may base such settlement solely upon
                  the excess if any of the per share amount payable upon or in
                  respect of such event over the exercise or base price of the
                  award. With respect to any award of an ISO, the Administrator
                  may make such an adjustment that causes the option to cease to
                  qualify as an ISO without the consent of the affected
                  participant.

                  In any of such events, the Administrator may take such action
                  prior to such event to the extent that the Administrator deems
                  the action necessary to permit the participant to realize the
                  benefits intended to be conveyed with respect to the
                  underlying shares in the same manner as is or will be
                  available to stockholders generally. In the case of any stock
                  split or reverse stock split, if no action is taken by the
                  Administrator, the proportionate adjustments contemplated by
                  clause (a) above shall nevertheless be made.

         7.2      AUTOMATIC ACCELERATION OF AWARDS. Upon a dissolution of the
                  Corporation or other event described in Section 7.1 that the
                  Corporation does not survive (or does not survive as a public
                  company in respect of its Common Stock), then each then
                  outstanding option and stock appreciation right shall become
                  fully vested, all shares of restricted stock then outstanding
                  shall fully vest free of restrictions, and each other award
                  granted under this Plan that is then outstanding shall become
                  payable to the holder of such award; provided that such
                  acceleration provision shall not apply, unless otherwise
                  expressly provided by the Administrator, with respect to any
                  award to the extent that the Administrator has made a
                  provision for the substitution, assumption, exchange or other
                  continuation or settlement of the award, or the award would
                  otherwise continue in accordance with its terms, in the
                  circumstances.

         7.3      POSSIBLE ACCELERATION OF AWARDS. Without limiting Section 7.2,
                  in the event of a Change in Control Event (as defined below),
                  the Administrator may, in its discretion, provide that any
                  outstanding option or stock appreciation right shall become
                  fully vested, that any share of restricted stock then
                  outstanding shall fully vest free of restrictions, and that
                  any other award granted under this Plan that is then
                  outstanding shall be payable to the holder of such award. The
                  Administrator may take such action with respect to all awards
                  then outstanding or only with respect to certain specific
                  awards identified by the Administrator in the circumstances.
                  For purposes of this Plan, "CHANGE IN CONTROL EVENT" means any
                  of the following:

                  (a)      The acquisition by any individual, entity or group
                           (within the meaning of Section 13(d)(3) or 14(d)(2)
                           of the Exchange Act (a "PERSON")) of beneficial
                           ownership (within the meaning of Rule 13d-3
                           promulgated under the Exchange Act) of 20% or more of
                           either (1) the then-outstanding shares of common
                           stock of the Corporation (the "OUTSTANDING COMPANY
                           COMMON STOCK") or (2) the combined voting power of
                           the then-outstanding voting securities of the
                           Corporation entitled to vote generally in the
                           election of directors (the "OUTSTANDING COMPANY
                           VOTING

<PAGE>
                           SECURITIES"); provided, however, that, for purposes
                           of this definition, the following acquisitions shall
                           not constitute a Change in Control Event; (A) any
                           acquisition directly from the Corporation, (B) any
                           acquisition by the Corporation, (C) any acquisition
                           by any employee benefit plan (or related trust)
                           sponsored or maintained by the Corporation or any
                           affiliate of the Corporation or a successor, or (D)
                           any acquisition by any entity pursuant to a
                           transaction that complies with Sections (c)(1), (2)
                           and (3) below;

                  (b)      Individuals who, as of the Effective Date, constitute
                           the Board (the "INCUMBENT BOARD") cease for any
                           reason to constitute at least a majority of the
                           Board; provided, however, that any individual
                           becoming a director subsequent to the Effective Date
                           whose election, or nomination for election by the
                           Corporation's stockholders, was approved by a vote of
                           at least two-thirds of the directors then comprising
                           the Incumbent Board (including for these purposes,
                           the new members whose election or nomination was so
                           approved, without counting the member and his
                           predecessor twice) shall be considered as though such
                           individual were a member of the Incumbent Board, but
                           excluding, for this purpose, any such individual
                           whose initial assumption of office occurs as a result
                           of an actual or threatened election contest with
                           respect to the election or removal of directors or
                           other actual or threatened solicitation of proxies or
                           consents by or on behalf of a Person other than the
                           Board;

                  (c)      Consummation of a reorganization, merger, statutory
                           share exchange or consolidation or similar corporate
                           transaction involving the Corporation or any of its
                           Subsidiaries, a sale or other disposition of all or
                           substantially all of the assets of the Corporation,
                           or the acquisition of assets or stock of another
                           entity by the Corporation or any of its Subsidiaries
                           (each, a "BUSINESS COMBINATION"), in each case
                           unless, following such Business Combination, (1) all
                           or substantially all of the individuals and entities
                           that were the beneficial owners of the Outstanding
                           Company Common Stock and the Outstanding Company
                           Voting Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           more than 50% of the then-outstanding shares of
                           common stock and the combined voting power of the
                           then-outstanding voting securities entitled to vote
                           generally in the election of directors, as the case
                           may be, of the entity resulting from such Business
                           Combination (including, without limitation, an entity
                           that, as a result of such transaction, owns the
                           Corporation or all or substantially all of the
                           Corporation's assets directly or through one or more
                           subsidiaries (a "PARENT")) in substantially the same
                           proportions as their ownership immediately prior to
                           such Business Combination of the Outstanding Company
                           Common Stock and the Outstanding Company Voting
                           Securities, as the case may be, (2) no Person
                           (excluding any entity resulting from such Business
                           Combination or a Parent or any employee benefit plan
                           (or related trust) of the Corporation or such entity
                           resulting from such Business Combination or Parent)
                           beneficially owns, directly or indirectly, 20% or
                           more of, respectively, the then-outstanding shares of
                           common stock of the entity resulting from such
                           Business Combination or the combined voting power of
                           the then-outstanding voting securities of

<PAGE>

                           such entity, except to the extent that the ownership
                           in excess of 20% existed prior to the Business
                           Combination, and (3) at least a majority of the
                           members of the board of directors or trustees of the
                           entity resulting from such Business Combination or a
                           Parent were members of the Incumbent Board at the
                           time of the execution of the initial agreement or of
                           the action of the Board providing for such Business
                           Combination; or

                  (d)      Approval by the stockholders of the Corporation of a
                           complete liquidation or dissolution of the
                           Corporation other than in the context of a
                           transaction that does not constitute a Change in
                           Control Event under clause (c) above.

         7.4      EARLY TERMINATION OF AWARDS. Any award that has been
                  accelerated as required or contemplated by Section 7.2 or 7.3
                  (or would have been so accelerated but for Section 7.5, 7.6 or
                  7.7) shall terminate upon the related event referred to in
                  Section 7.2 or 7.3, as applicable, subject to any provision
                  that has been expressly made by the Administrator, through a
                  plan of reorganization or otherwise, for the survival,
                  substitution, assumption, exchange or other continuation or
                  settlement of such award and provided that, in the case of
                  options and stock appreciation rights that will not survive,
                  be substituted for, assumed, exchanged, or otherwise continued
                  or settled in the transaction, the holder of such award shall
                  be given reasonable advance notice of the impending
                  termination and a reasonable opportunity to exercise his or
                  her outstanding options and stock appreciation rights in
                  accordance with their terms before the termination of such
                  awards (except that in no case shall more than ten days'
                  notice of accelerated vesting and the impending termination be
                  required and any acceleration may be made contingent upon the
                  actual occurrence of the event).

         7.5      OTHER ACCELERATION RULES. Any acceleration of awards pursuant
                  to this Section 7 shall comply with applicable legal
                  requirements and, if necessary to accomplish the purposes of
                  the acceleration or if the circumstances require, may be
                  deemed by the Administrator to occur a limited period of time
                  not greater than 30 days before the event. Without limiting
                  the generality of the foregoing, the Administrator may deem an
                  acceleration to occur immediately prior to the applicable
                  event and/or reinstate the original terms of an award if an
                  event giving rise to an acceleration does not occur. The
                  Administrator may override the provisions of Section 7.2, 7.3,
                  7.4 and/or 7.6 by express provision in the award agreement and
                  may accord any Eligible Person a right to refuse any
                  acceleration, whether pursuant to the award agreement or
                  otherwise, in such circumstances as the Administrator may
                  approve. The portion of any ISO accelerated in connection with
                  a Change in Control Event or any other action permitted
                  hereunder shall remain exercisable as an ISO only to the
                  extent the applicable $100,000 limitation on ISOs is not
                  exceeded. To the extent exceeded, the accelerated portion of
                  the option shall be exercisable as a nonqualified stock option
                  under the Code.

         7.6      POSSIBLE RESCISSION OF ACCELERATION. If the vesting of an
                  award has been accelerated expressly in anticipation of an
                  event or upon stockholder approval of an event and the
                  Administrator later determines that the event will not occur,
                  the Administrator

<PAGE>
                  may rescind the effect of the acceleration as to any then
                  outstanding and unexercised or otherwise unvested awards.

         7.7      GOLDEN PARACHUTE LIMITATION. Notwithstanding anything else
                  contained in this Section 7 to the contrary, in no event shall
                  an award be accelerated under this Plan to an extent or in a
                  manner which would not be fully deductible by the Company for
                  federal income tax purposes because of Section 280G of the
                  Code, nor shall any payment hereunder be accelerated to the
                  extent any portion of such accelerated payment would not be
                  deductible by the Company because of Section 280G of the Code.
                  If a participant would be entitled to benefits or payments
                  hereunder and under any other plan or program that would
                  constitute "parachute payments" as defined in Section 280G of
                  the Code, then the participant may by written notice to the
                  Company designate the order in which such parachute payments
                  will be reduced or modified so that the Company is not denied
                  federal income tax deductions for any "parachute payments"
                  because of Section 280G of the Code. Notwithstanding the
                  foregoing, an employment or other agreement with the
                  participant may expressly provide for benefits in excess of
                  amounts determined by applying the foregoing Section 280G
                  limitations.

         7.8      SECTION 162(m) LIMITATIONS. To the extent limited by Section
                  162(m) of the Code in the case of an award intended as
                  performance-based compensation thereunder and necessary to
                  assure the deductibility of the compensation payable under the
                  award, the Administrator shall have no discretion under this
                  Plan (a) to increase the amount of compensation or the number
                  of shares that would otherwise be due upon the attainment of
                  the applicable performance target or the exercise of the
                  option or SAR, or (b) to waive the achievement of any
                  applicable performance goal as a condition to receiving a
                  benefit or right under the award.

8. OTHER PROVISIONS

         8.1      COMPLIANCE WITH LAWS. This Plan, the granting and vesting of
                  awards under this Plan, the offer, issuance and delivery of
                  shares of Common Stock, the acceptance of promissory notes
                  and/or the payment of money under this Plan or under awards
                  are subject to compliance with all applicable federal and
                  state laws, rules and regulations (including but not limited
                  to state and federal securities law, federal margin
                  requirements) and to such approvals by any listing, regulatory
                  or governmental authority as may, in the opinion of counsel
                  for the Company, be necessary or advisable in connection
                  therewith. The person acquiring any securities under this Plan
                  will, if requested by the Company, provide such assurances and
                  representations to the Company as the Administrator may deem
                  necessary or desirable to assure compliance with all
                  applicable legal and accounting requirements.

         8.2      EMPLOYMENT STATUS. No person shall have any claim or rights to
                  be granted an award (or additional awards, as the case may be)
                  under this Plan, subject to any express contractual rights
                  (set forth in a document other than this Plan) to the
                  contrary.

         8.3      NO EMPLOYMENT/SERVICE CONTRACT. Nothing contained in this Plan
                  (or in any other documents under this Plan or in any award)
                  shall confer upon any Eligible Person

<PAGE>
                  or other participant any right to continue in the employ or
                  other service of the Company, constitute any contract or
                  agreement of employment or other service or affect an
                  employee's status as an employee at will, nor shall interfere
                  in any way with the right of the Company to change a person's
                  compensation or other benefits, or to terminate his or her
                  employment or other service, with or without cause. Nothing in
                  this Section 8.3, however, is intended to adversely affect any
                  express independent right of such person under a separate
                  employment or service contract other than an award agreement.

         8.4      PLAN NOT FUNDED. Awards payable under this Plan shall be
                  payable in shares or from the general assets of the
                  Corporation, and no special or separate reserve, fund or
                  deposit shall be made to assure payment of such awards. No
                  participant, beneficiary or other person shall have any right,
                  title or interest in any fund or in any specific asset
                  (including shares of Common Stock, except as expressly
                  otherwise provided) of the Company by reason of any award
                  hereunder. Neither the provisions of this Plan (or of any
                  related documents), nor the creation or adoption of this Plan,
                  nor any action taken pursuant to the provisions of this Plan
                  shall create, or be construed to create, a trust of any kind
                  or a fiduciary relationship between the Company and any
                  participant, beneficiary or other person. To the extent that a
                  participant, beneficiary or other person acquires a right to
                  receive payment pursuant to any award hereunder, such right
                  shall be no greater than the right of any unsecured general
                  creditor of the Company.

         8.5      TAX WITHHOLDING. Upon any exercise, vesting, or payment of any
                  award or upon the disposition of shares of Common Stock
                  acquired pursuant to the exercise of an ISO prior to
                  satisfaction of the holding period requirements of Section 422
                  of the Code, the Company shall have the right at its option
                  to:

                  (a)      require the participant (or the participant's
                           personal representative or beneficiary, as the case
                           may be) to pay or provide for payment of at least the
                           minimum amount of any taxes which the Company may be
                           required to withhold with respect to such award event
                           or payment; or

                  (b)      deduct from any amount otherwise payable in cash to
                           the participant (or the participant's personal
                           representative or beneficiary, as the case may be)
                           the minimum amount of any taxes which the Company may
                           be required to withhold with respect to such cash
                           payment.

                  In any case where a tax is required to be withheld in
                  connection with the delivery of shares of Common Stock under
                  this Plan, the Administrator may in its sole discretion
                  (subject to Section 8.1) grant (either at the time of the
                  award or thereafter) to the participant the right to elect,
                  pursuant to such rules and subject to such conditions as the
                  Administrator may establish, to have the Corporation reduce
                  the number of shares to be delivered by (or otherwise
                  reacquire) the appropriate number of shares, valued in a
                  consistent manner at their fair market value or at the sales
                  price in accordance with authorized procedures for cashless
                  exercises, necessary to satisfy the minimum applicable
                  withholding obligation on exercise, vesting or payment. In no
                  event shall the shares withheld exceed the minimum whole
                  number of shares required for tax withholding under applicable
<PAGE>
                  law. The Corporation may, with the Administrator's approval,
                  accept one or more promissory notes from any Eligible Person
                  in connection with taxes required to be withheld upon the
                  exercise, vesting or payment of any award under this Plan;
                  provided that any such note shall be subject to terms and
                  conditions established by the Administrator and the
                  requirements of applicable law.

         8.6      EFFECTIVE DATE, TERMINATION AND SUSPENSION, AMENDMENTS.

                  8.6.1  EFFECTIVE DATE. This Plan is effective as of March 31,
                  2003, the date of its approval by the Board (the "EFFECTIVE
                  DATE"). This Plan shall be submitted for and subject to
                  stockholder approval no later than twelve months after the
                  Effective Date. Unless earlier terminated by the Board, this
                  Plan shall terminate at the close of business on the day
                  before the tenth anniversary of the Effective Date. After the
                  termination of this Plan either upon such stated expiration
                  date or its earlier termination by the Board, no additional
                  awards may be granted under this Plan, but previously granted
                  awards (and the authority of the Administrator with respect
                  thereto, including the authority to amend such awards) shall
                  remain outstanding in accordance with their applicable terms
                  and conditions and the terms and conditions of this Plan.

                  8.6.2  BOARD AUTHORIZATION. The Board may, at any time,
                  terminate or, from time to time, amend, modify or suspend this
                  Plan, in whole or in part. No awards may be granted during any
                  period that the Board suspends this Plan.

                  8.6.3  STOCKHOLDER APPROVAL. To the extent then required by
                  applicable law or any applicable listing agency or required
                  under Sections 162, 422 or 424 of the Code to preserve the
                  intended tax consequences of this Plan, or deemed necessary or
                  advisable by the Board, any amendment to this Plan shall be
                  subject to stockholder approval.

                  8.6.4  AMENDMENTS TO AWARDS. Without limiting any other
                  express authority of the Administrator under (but subject to)
                  the express limits of this Plan, the Administrator by
                  agreement or resolution may waive conditions of or limitations
                  on awards to participants that the Administrator in the prior
                  exercise of its discretion has imposed, without the consent of
                  a participant, and (subject to the requirements of Sections
                  3.2 and 8.6.5) may make other changes to the terms and
                  conditions of awards. Any amendment or other action that would
                  constitute a repricing of an award is subject to the
                  limitations set forth in Section 3.2(g).

                  8.6.5  LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No
                  amendment, suspension or termination of this Plan or change of
                  or affecting any outstanding award shall, without written
                  consent of the participant, affect in any manner materially
                  adverse to the participant any rights or benefits of the
                  participant or obligations of the Company under any award
                  granted under this Plan prior to the effective date of such
                  change. Changes, settlements and other actions contemplated by
                  Section 7 shall not be deemed to constitute changes or
                  amendments for purposes of this Section 8.6.
<PAGE>
         8.7      PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise expressly
                  authorized by the Administrator or this Plan, a participant
                  shall not be entitled to any privilege of stock ownership as
                  to any shares of Common Stock not actually delivered to and
                  held of record by the participant. No adjustment will be made
                  for dividends or other rights as a stockholder for which a
                  record date is prior to such date of delivery.

         8.8      GOVERNING LAW; CONSTRUCTION; SEVERABILITY.

                  8.8.1  CHOICE OF LAW. This Plan, the awards, all documents
                  evidencing awards and all other related documents shall be
                  governed by, and construed in accordance with the laws of the
                  British Virgin Islands.

                  8.8.2  SEVERABILITY. If a court of competent jurisdiction
                  holds any provision invalid and unenforceable, the remaining
                  provisions of this Plan shall continue in effect.

                  8.8.3  PLAN CONSTRUCTION. Awards under Section 5.1.4 to
                  persons described in Section 5.2 that are either granted or
                  become vested, exercisable or payable based on attainment of
                  one or more performance goals related to the Business
                  Criteria, as well as Qualifying Options and Qualifying Stock
                  Appreciation Rights granted to persons described in Section
                  5.2, that are approved by a committee composed solely of two
                  or more outside directors (as this requirement is applied
                  under Section 162(m) of the Code) shall be deemed to be
                  intended as performance-based compensation within the meaning
                  of Section 162(m) of the Code unless such committee provides
                  otherwise at the time of grant of the award. It is the further
                  intent of the Company that (to the extent the Company or
                  awards under this Plan may be or become subject to limitations
                  on deductibility under Section 162(m) of the Code) any such
                  awards and any other Performance-Based Awards under Section
                  5.2 that are granted to or held by a person subject to Section
                  162(m) will qualify as performance-based compensation or
                  otherwise be exempt from deductibility limitations under
                  Section 162(m).

         8.9      CAPTIONS. Captions and headings are given to the sections and
                  subsections of this Plan solely as a convenience to facilitate
                  reference. Such headings shall not be deemed in any way
                  material or relevant to the construction or interpretation of
                  this Plan or any provision thereof.

         8.10     STOCK-BASED AWARDS IN SUBSTITUTION FOR STOCK OPTIONS OR AWARDS
                  GRANTED BY OTHER CORPORATION. Awards may be granted to
                  Eligible Persons under this Plan in substitution for or in
                  connection with an assumption of employee stock options, stock
                  appreciation rights, restricted stock or other stock-based
                  awards granted by other entities to persons who are or who
                  will become Eligible Persons in respect of the Company, in
                  connection with a distribution, merger or other reorganization
                  by or with the granting entity or an affiliated entity, or the
                  acquisition by the Company, directly or indirectly, of all or
                  a substantial part of the stock or assets of the employing
                  entity. The awards so granted need not comply with other
                  specific terms of this Plan, provided the awards reflect only
                  adjustments giving effect to the assumption or substitution
                  consistent with the conversion applicable to the

<PAGE>
                  Common Stock in the transaction and any change in the issuer
                  of the security. Any shares that are delivered and any awards
                  that are granted by, or become obligations of, the
                  Corporation, as a result of the assumption by the Corporation
                  of, or in substitution for, outstanding awards previously
                  granted by an acquired company (or previously granted by a
                  predecessor employer (or direct or indirect parent thereof) in
                  the case of persons that become employed by the Company in
                  connection with a business or asset acquisition or similar
                  transaction) shall not be counted against the Share Limit or
                  other limits on the number of shares available for issuance
                  under this Plan.

         8.11     NON-EXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or
                  be deemed to limit the authority of the Board or the
                  Administrator to grant awards or authorize any other
                  compensation, with or without reference to the Common Stock,
                  under any other plan or authority.

         8.12     NO CORPORATE ACTION RESTRICTION. The existence of this Plan,
                  the award agreements and the awards granted hereunder shall
                  not limit, affect or restrict in any way the right or power of
                  the Board or the stockholders of the Corporation to make or
                  authorize: (a) any adjustment, recapitalization,
                  reorganization or other change in the capital structure or
                  business of the Corporation or any subsidiary, (b) any merger,
                  amalgamation, consolidation or change in the ownership of the
                  Corporation or any subsidiary, (c) any issue of bonds,
                  debentures, capital, preferred or prior preference stock ahead
                  of or affecting the capital stock (or the rights thereof) of
                  the Corporation or any subsidiary, (d) any dissolution or
                  liquidation of the Corporation or any subsidiary, (e) any sale
                  or transfer of all or any part of the assets or business of
                  the Corporation or any subsidiary, or (f) any other corporate
                  act or proceeding by the Corporation or any subsidiary. No
                  participant, beneficiary or any other person shall have any
                  claim under any award or award agreement against any member of
                  the Board or the Administrator, or the Corporation or any
                  employees, officers or agents of the Corporation or any
                  subsidiary, as a result of any such action.

         8.13     OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and
                  other benefits received by a participant under an award made
                  pursuant to this Plan shall not be deemed a part of a
                  participant's compensation for purposes of the determination
                  of benefits under any other employee welfare or benefit plans
                  or arrangements, if any, provided by the Corporation or any
                  subsidiary, except where the Administrator expressly otherwise
                  provides or authorizes in writing. Awards under this Plan may
                  be made in addition to, in combination with, as alternatives
                  to or in payment of grants, awards or commitments under any
                  other plans or arrangements of the Corporation or its
                  subsidiaries.

<PAGE>
                      AMENDMENT TO SHANDA HOLDINGS LIMITED
                            2003 STOCK INCENTIVE PLAN

         THIS AMENDMENT is entered into on December 19, 2003.

         WHEREAS, in connection with the proposed listing of the shares of
Shanda Interactive Entertainment Limited, an exempted company formed under the
laws of the Cayman Islands (the "CAYMAN LISTCO"), on the Nasdaq National Market
System, a corporate reorganization (the "REORGANIZATION") involving Shanda
Holdings Limited (the "CORPORATION") has been effected whereby the Corporation
became a wholly owned subsidiary of the Cayman Listco; and

         WHEREAS, in connection with the Reorganization, the Board of Directors
of the Cayman Listco has passed a written resolution on December 19, 2003 to
assume the Shanda Holdings Limited 2003 Stock Incentive Plan (the "PLAN"), the
form of Shanda Holdings Limited 2003 Stock Incentive Plan Employee Stock Option
Agreement (the "OPTION AGREEMENT") and all obligations of the previously granted
options under the Plan, and to amend the Plan and the Option Agreement
accordingly.

         NOW, THEREFORE, the Plan is amended as follows:

1.       All references to "Shanda Holdings Limited" shall be deleted and
replaced with "Shanda Interactive Entertainment Limited" and all references to
the "Corporation" shall mean Shanda Interactive Entertainment Limited.

2.       The second sentence of Section 1 shall be deleted in its entirety and
replaced with the following:

         "As used herein, "CORPORATION" means Shanda Interactive Entertainment
         Limited, an exempted company formed under the laws of the Cayman
         Islands; "SUBSIDIARY" means any corporation or other entity a majority
         of whose outstanding voting stock or voting power is beneficially owned
         directly or indirectly by the Corporation; "COMPANY" means the
         Corporation and its Subsidiaries, collectively; and "BOARD" means the
         Board of Directors of the Corporation."

3.       Section 8.8.1 shall be deleted in its entirety and replace with the
following:

         "This Plan, the awards, all documents evidencing awards and all other
         related documents shall be governed by, and construed in accordance
         with the laws of the Cayman Islands."

4.       Except as amended herein, the Plan shall remain in full force and
effect, enforceable according to its terms.

5.       This Amendment shall be governed by and construed and enforced in
accordance with the laws of the Cayman Islands without regard to conflict of law
principles thereunder.
<PAGE>
                    SHANDA INTERACTIVE ENTERTAINMENT LIMITED
                            2003 STOCK INCENTIVE PLAN
                         EMPLOYEE STOCK OPTION AGREEMENT

     THIS EMPLOYEE STOCK OPTION AGREEMENT (this "OPTION AGREEMENT") dated
_____________________ by and between SHANDA INTERACTIVE ENTERTAINMENT LIMITED,
an exempted company formed under the laws of the Cayman Islands (the
"CORPORATION"), and ___________________________ (the "GRANTEE") evidences the
nonqualified stock option (the "OPTION") granted by the Corporation to the
Grantee as to the number of shares of the Corporation's Common Stock first set
forth below.

--------------------------------------------------------------------------------
 NUMBER OF SHARES OF COMMON STOCK:1 _______   AWARD DATE:  __________________
--------------------------------------------------------------------------------

 EXERCISE PRICE PER SHARE:1       $________   EXPIRATION DATE:1,2 _____________

 VESTING1,2 The Option shall become vested as to 25% of the total number of
 shares of Common Stock subject to the Option on each of the first, second,
 third and fourth anniversaries of the Award Date.
--------------------------------------------------------------------------------

         The Option is granted under the SHANDA INTERACTIVE ENTERTAINMENT
LIMITED 2003 Stock Incentive Plan (the "PLAN") and subject to the Terms and
Conditions of Employee Stock Option (the "TERMS") attached to this Option
Agreement (incorporated herein by this reference) and to the Plan. The Option
has been granted to the Grantee in addition to, and not in lieu of, any other
form of compensation otherwise payable or to be paid to the Grantee. Capitalized
terms are defined in the Plan if not defined herein. The parties agree to the
terms of the Option set forth herein. The Grantee acknowledges receipt of a copy
of the Terms, the Plan and the Prospectus for the Plan.

<TABLE>
<S>                                     <C>

"GRANTEE"                               SHANDA INTERACTIVE ENTERTAINMENT LIMITED

---------------------------------
Signature
                                        By:
                                            -----------------------------------
---------------------------------
Print Name                              Print Name:
                                                    ---------------------------

                                        Title:
                                               --------------------------------

</Table>

<Fn>
--------
1     Subject to adjustment under Section 7.1 of the Plan.

2     Subject to early termination under Section 4 of the Terms and Section 7.4
      of the Plan.

</Fn>
<PAGE>
                 TERMS AND CONDITIONS OF EMPLOYEE STOCK OPTION

1.       VESTING; LIMITS ON EXERCISE.

         The Option shall vest and become exercisable in percentage installments
of the aggregate number of shares subject to the Option as set forth on the
cover page of this Option Agreement. The Option may be exercised only to the
extent the Option is vested and exercisable.

         o    Cumulative Exercisability. To the extent that the Option is vested
              and exercisable, the Grantee has the right to exercise the Option
              (to the extent not previously exercised), and such right shall
              continue, until the expiration or earlier termination of the
              Option.

         o    No Fractional Shares.  Fractional share interests shall be
              disregarded, but may be cumulated.

         o    Minimum Exercise. No fewer than 1001 shares of Common Stock may be
              purchased at any one time, unless the number purchased is the
              total number at the time exercisable under the Option.

         o    Nonqualified Stock Option. The Option is a nonqualified stock
              option and is not, and shall not be, an incentive stock option
              within the meaning of Section 422 of the Code.

2.       CONTINUANCE OF EMPLOYMENT/SERVICE REQUIRED; NO EMPLOYMENT/SERVICE
         COMMITMENT.

         The vesting schedule requires continued employment or service through
each applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option
Agreement. Employment or service for only a portion of the vesting period, even
if a substantial portion, will not entitle the Grantee to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or services as provided in Section 4 below
or under the Plan.

         Nothing contained in this Option Agreement or the Plan constitutes a
continued employment or service commitment by the Corporation or any of its
Subsidiaries, affects the Grantee's status, if he or she is an employee, as an
employee at will who is subject to termination without cause, confers upon the
Grantee any right to remain employed by or in service to the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment or service, or affects the
right of the Corporation or any Subsidiary to increase or decrease the Grantee's
other compensation.

3.       METHOD OF EXERCISE OF OPTION.

         The Option shall be exercisable by the delivery to the Secretary of the
Corporation (or such other person as the Committee may require pursuant to such
administrative exercise procedures as the Committee may implement from time to
time) of:

         o    a written notice stating the number of shares of Common Stock to
              be purchased pursuant to the Option or by the completion of such
              other administrative exercise procedures as the Committee may
              require from time to time,

         o    payment in full for the Exercise Price of the shares to be
              purchased in cash, check or by electronic funds transfer to the
              Corporation, or (subject to compliance with all

<PAGE>
              applicable laws, rules, regulations and listing requirements and
              further subject to such rules as the Administrator may adopt as to
              any non-cash payment) in shares of Common Stock already owned by
              the Grantee, valued at their Fair Market Value on the exercise
              date, provided, however, that any shares initially acquired upon
              exercise of a stock option or otherwise from the Corporation must
              have been owned by the Grantee for at least six (6) months before
              the date of such exercise;

         o    any written statements or agreements required pursuant to Section
              8.1 of the Plan; and

         o    satisfaction of the tax withholding provisions of Section 8.5 of
              the Plan.

The Administrator also may, but is not required to, authorize a non-cash payment
alternative by notice and third party payment in such manner as may be
authorized by the Administrator.

4.       EARLY TERMINATION OF OPTION.

         4.1  POSSIBLE TERMINATION OF OPTION UPON CHANGE IN CONTROL. The Option
is subject to termination in connection with a Change in Control Event or
certain similar reorganization events as provided in Section 7.4 of the Plan.

         4.2  TERMINATION OF OPTION UPON A TERMINATION OF GRANTEE'S EMPLOYMENT
OR SERVICES. Subject to earlier termination on the Expiration Date of the Option
or pursuant to Section 4.1 above, if the Grantee ceases to be employed by or
ceases to provide services to the Corporation or a Subsidiary, the following
rules shall apply (the last day that the Grantee is employed by or provides
services to the Corporation or a Subsidiary is referred to as the Grantee's
"SEVERANCE DATE"):

         o    other than as expressly provided below in this Section 4.2, the
              Grantee will have until the date that is 30 days after his or her
              Severance Date to exercise the Option (or portion thereof) to the
              extent that it was vested on the Severance Date, (b) the Option,
              to the extent not vested on the Severance Date, shall terminate on
              the Severance Date, and (c) the Option, to the extent exercisable
              for the 30-day period following the Severance Date and not
              exercised during such period, shall terminate at the close of
              business on the last day of the 30-day period;

         o    if the termination of the Grantee's employment is the result of
              the Grantee's voluntary Retirement (as defined below and other
              than a termination by the Corporation or a Subsidiary for cause as
              provided below), then the Grantee will have until the date that is
              3 years after his or her Severance Date to exercise the Option (or
              portion thereof) to the extent that it was vested on the Severance
              Date, (b) the Option, to the extent not vested on the Severance
              Date, shall terminate on the Severance Date, and (c) the Option,
              to the extent exercisable for the 3-year period following the
              Severance Date and not exercised during such period, shall
              terminate at the close of business on the last day of the 3-year
              period;

         o    if the termination of the Grantee's employment is the result of
              the Grantee's death or Disability (as defined below), then the
              Grantee (or his beneficiary or personal representative, as the
              case may be) will have until the date that is 3 years after the
              Grantee's Severance Date to exercise the Option, (b) the Option,
              to the extent not vested on the Severance Date, shall terminate on
              the Severance Date, and (c) the Option, to the extent exercisable
              for the 3-year period following the Severance Date and not
              exercised during such period, shall terminate at the close of
              business on the last day of the 3-year period;
<PAGE>
         o    if the termination of the Grantee's employment is the result of a
              termination by the Corporation or a Subsidiary for Cause (as
              defined below), the Option (whether vested or not) shall terminate
              on the Severance Date.

         For purposes of the Option, "Disability" means a permanent disability
(within the meaning of Section 22(e)(3) of the Code or as otherwise determined
by the Administrator). For purposes of the Option, "Retirement" means a
termination of employment by the Grantee that occurs upon or after the Grantee's
attainment of age 65 and in accordance with the retirement policies of the
Corporation (or the Subsidiary that employs the Grantee) then in effect. For
purposes of the Option, "Cause" means that the Grantee: (a) has been repeatedly
negligent in the discharge of his or her duties to the Corporation or a
Subsidiary or has refused to perform stated or assigned duties (other than by
reason of a disability or analogous condition); (b) has been dishonest or
committed or engaged in an act of theft, embezzlement or fraud, a breach of
confidentiality, an unauthorized disclosure or use of inside information,
customer lists, trade secrets or other confidential information; (c) has
breached a fiduciary duty, or violated any other duty, law, rule, regulation or
policy of the company or an affiliate; (d) has been convicted of, or plead
guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic
violations or similar offenses); (e) has materially breached any of the
provisions of any agreement with the Corporation or a Subsidiary; (f) has
engaged in unfair competition with, or otherwise acted intentionally in a manner
injurious to the reputation, business or assets of, the Corporation or a
Subsidiary; or has improperly induced a vendor or customer to break or terminate
any contract with the Corporation or a Subsidiary or induced a principal for
whom the Corporation or a Subsidiary acts as agent to terminate such agency
relationship.

         In all events the Option is subject to earlier termination on the
Expiration Date of the Option or as contemplated by Section 4.1. The
Administrator shall be the sole judge of whether the Grantee continues to render
employment or services for purposes of this Option Agreement.

5.       NON-TRANSFERABILITY.

         The Option and any other rights of the Grantee under this Option
Agreement or the Plan are nontransferable and exercisable only by the Grantee,
except as set forth in Section 5.7 of the Plan. Any shares of Common Stock
issued on exercise of the Option are subject to substantial restrictions on
transfer, and are subject to other rights in favor of the Corporation as set
forth herein.

6.       SECURITIES LAW COMPLIANCE.

         The Grantee acknowledges that the Option and the shares of Common Stock
are not being registered under the Securities Act, based, in part, in reliance
upon an exemption from registration under Securities and Exchange Commission
Rule 701 promulgated under the Securities Act of 1933, and a comparable
exemption from qualification under applicable state securities laws, as each may
be amended from time to time. The Grantee, by executing this Option Agreement,
hereby makes the following representations to the Corporation and acknowledges
that the Corporation's reliance on federal and state securities law exemptions
from registration and qualification is predicated, in substantial part, upon the
accuracy of these representations:

         o    The Grantee is acquiring the Option and, if and when he/she
              exercises the Option, will acquire the shares of Common Stock
              solely for the Grantee's own account, for investment purposes
              only, and not with a view to or an intent to sell, or to offer for
              resale in connection with any unregistered distribution, all or
              any portion of the shares within
<PAGE>
              the meaning of the Securities Act, or other applicable state
              securities laws.

         o    The Grantee has had an opportunity to ask questions and receive
              answers from the Corporation regarding the terms and conditions of
              the Option and the restrictions imposed on any shares of Common
              Stock purchased upon exercise of the Option. The Grantee has been
              furnished with, and/or has access to, such information as he or
              she considers necessary or appropriate for deciding whether to
              exercise the Option and purchase shares of Common Stock. However,
              in evaluating the merits and risks of an investment in the Common
              Stock, the Grantee has and will rely upon the advice of his/her
              own legal counsel, tax advisors, and/or investment advisors.

         o    The Grantee is aware that the Option may be of no practical value,
              that any value it may have depends on its vesting and
              exercisability as well as an increase in the Fair Market Value of
              the underlying shares of Common Stock to an amount in excess of
              the Exercise Price, and that any investment in common shares of a
              closely held corporation such as the Corporation is
              non-marketable, non-transferable and could require capital to be
              invested for an indefinite period of time, possibly without
              return, and at substantial risk of loss.

         o    The Grantee understands that any shares of Common Stock acquired
              on exercise of the Option will be characterized as "restricted
              securities" under the federal securities laws, and that, under
              such laws and applicable regulations, such securities may be
              resold without registration under the Securities Act only in
              certain limited circumstances, including in accordance with the
              conditions of Rule 144 promulgated under the Securities Act, as
              presently in effect, with which the Grantee is familiar.

         o    The Grantee has read and understands the restrictions and
              limitations set forth in the Plan, this Option Agreement
              (including these Terms), which are imposed on the Option and any
              shares of Common Stock which may be acquired upon exercise of the
              Option.

         o    At no time was an oral representation made to the Grantee relating
              to the Option or the purchase of shares of Common Stock and the
              Grantee was not presented with or solicited by any promotional
              meeting or material relating to the Option or the Common Stock.

7.       LOCK-UP AGREEMENT.

         Neither the Grantee (nor any permitted transferee) may, directly or
indirectly, offer, sell or transfer or dispose of any of the shares of Common
Stock acquired upon exercise of the Option (the "SHARES") or any interest
therein (or agree to do any thereof) (collectively, a "TRANSFER") during the
period commencing as of 14 days prior to and ending one year, or such lesser
period of time as the relevant underwriters may permit, after the effective date
of a registration statement covering any public offering of the Corporation's
securities of which the Grantee has notice. (The term "Grantee" includes, where
the context so requires, any permitted direct or indirect transferee of the
Grantee.) The Grantee shall agree and consent to the entry of stop transfer
instructions with the Corporation's transfer agent against the Transfer of the
Corporation's securities beneficially owned by the Grantee and shall conform the
limitations hereunder by agreement with and for the benefit of the relevant
underwriters by a lock-up agreement or other agreement in customary form.
Notwithstanding anything else herein to the contrary, this Section 7 shall not
be construed so as to prohibit the Grantee from participating in a registration
or a public offering of the Common Stock with respect to any shares which he or
she may hold at that time, provided, however, that such participation shall be
at the sole discretion of the Board.

<PAGE>

8.       NOTICES.

         Any notice to be given under the terms of this Option Agreement shall
be in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Grantee at the address last reflected on
the Corporation's payroll records, or at such other address as either party may
hereafter designate in writing to the other. Any such notice shall be given only
when received, but if the Grantee is no longer employed by the Corporation or a
Subsidiary, shall be deemed to have been duly given five business days after the
date mailed in accordance with the foregoing provisions of this Section 6.

9.       PLAN.

         The Option and all rights of the Grantee under this Option Agreement
are subject to, and the Grantee agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Grantee agrees to be bound by the terms of the Plan and this Option
Agreement (including these Terms). The Grantee acknowledges having read and
understanding the Plan and this Option Agreement. Unless otherwise expressly
provided in other sections of this Option Agreement, provisions of the Plan that
confer discretionary authority on the Board or the Administrator do not and
shall not be deemed to create any rights in the Grantee unless such rights are
expressly set forth herein or are otherwise in the sole discretion of the Board
or the Administrator so conferred by appropriate action of the Board or the
Administrator under the Plan after the date hereof.

10.      ENTIRE AGREEMENT.

         This Option Agreement (including these Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 8.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Grantee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.

11.      GOVERNING LAW.

         This Option Agreement shall be governed by and construed and enforced
in accordance with the laws of the Cayman Islands without regard to conflict of
law principles thereunder.

12.      EFFECT OF THIS AGREEMENT.

         Subject to the Corporation's right to terminate the Option pursuant to
Section 7.4 of the Plan, this Option Agreement shall be assumed by, be binding
upon and inure to the benefit of any successor or successors to the Corporation.

13.      COUNTERPARTS.

         This Option Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

<PAGE>
14.      SECTION HEADINGS.

         The section headings of this Option Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provision hereof.Exhibit 10.1

                              Termination Agreement

In relation to the Unincorporated Association Contract ("the Contract," which
expression includes the hereinbelow mentioned amendments) executed by and
between Minera Santa Rita S. de R. L. de C.V. ("MSR"), represented by Jack
Veeder Everett and Roger Austin Newell, on one hand, as the active partner, and
Grupo Minero FG S.A. de C.V. ("FG"), represented by Samuel Fraijo Flores, on the
other hand, as the silent partner, on February 23 (twenty three) 2002 (two
thousand and two), as amended on 15 (fifteen) August 2002 (two thousand and
two), 15 (fifteen) January 2003 (two thousand and three), 23 (twenty-three)
February 2003 (two thousand and three), and on January 7 (seven), 2004 (two
thousand and four), in regards to the development of the "El Chanate" project
("the Project"), comprising certain mining lots, covered by concessions owned or
held by Oro de Altar S.A. de C.V., located in the Municipality of Altar, Sonora,
MSR and FG agree as follows:

      1.    Due to the fact that no financing was obtained at the latest on
            March 31 (thirty-one), 2004 (two thousand and four), for the
            execution of Phase IV and, in general, for the development of the
            Project, and, furthermore, due to the fact that FG and MSR have
            decided not to make additional contributions, by application of
            clauses 5 (five) section (C) and 14 (fourteen) section (A) (8) of
            the Contract, the Contract is deemed terminated and, consequently,
            without any obligatoriness or efficacy, effective precisely as of
            and from March 31 (thirty-one), 2004 (two thousand and four) ("the
            Effective Date"), without obligations and responsibilities other
            than the ones expressly stipulated in this agreement.

      2.    During the life of the Contract, FG invested in Phases I and II of
            the Project the sum of US$457,455 (four hundred fifty-seven thousand
            four hundred fifty-five dollars of the United States of America). In
            consideration of said investment and in consideration of FG's
            acceptance of the hereinbelow called "Participation Certificate,"
            MSR obligates itself to act as follows:

            A.    At the latest within 30 (thirty) calendar days following the
                  Effective Date, MSR shall have the partners who own all of the
                  portions of interest that represent its capital stock
                  affirmatively vote these resolutions:

                  a.    An amendment to the pertinent clauses of the bylaws of
                        MSR, so that MSR may issue a certificate of
                        participation ("the Participation Certificate") that,
                        without representing capital stock, confer these rights
                        on its owner:

                        a.1.  the right to receive a 5% (five percent) of the
                              profits of each fiscal year of MSR with respect to
                              which the payments of dividends is ordered ("the
                              Fixed Percentage"),

                        a.2.  the right that the Fixed Percentage be
                              non-dilutable by contributions of MSR or of other
                              persons to the capital stock of MSR or for other
                              causes or reasons, and that the rights of the
                              owner of the

<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 2

                              Participation Certificate be not modified without
                              the consent of its owner,

                        a.3.  the right to abstain from contributing to the
                              capital stock of MSR and from contributing for the
                              development of the Project, without this
                              abstention causing a dilution of the Fixed
                              Percentage or a modification of the rights of the
                              owner of the Participation Certificate without the
                              owner's consent,

                        a.4.  the right to participate in the meetings of the
                              partners of MSR, in the sessions of the Board of
                              Managers of MSR, and in the sessions of the
                              Technical Committee if one is formed in regard to
                              the development and operation of the Project, all
                              of the above with the right to speak but without
                              the right to vote. FG shall keep the information
                              made known to it by reason of its participation in
                              the above meetings and sessions fully
                              confidential, unless it must disclose it by final
                              court or administrative authority order, under
                              penalty of payment of damages and indemnification
                              of losses, without prejudice to other legal
                              remedies that MSR might have in this regard, and

                        a.5.  the right to name, at its cost and risk, an
                              auditor commissioned to review MSR financial
                              statements and to determine whether or not the
                              Fixed Percentage was calculated correctly. If FG's
                              auditor fails to formulate and communicate to MSR
                              objections within the 30 (thirty) calendar days
                              following the date on which the payment of
                              dividends has been decreed, the calculation of the
                              Fixed Percentage carried out by MSR shall be
                              deemed correct.

                        The amendment to the bylaws set forth in this section
                        (A) shall also provide as follows in regard to the
                        Participation Certificate:

                        a.6.  only one person may be entitled to own it,

                        a.7.  it shall be indivisible, that is, the rights
                              derived from it may not be separated from its
                              ownership and also may not be separated among
                              themselves,

                        a.8.  its owner shall not enjoy the right of withdrawal,
                              redemption, reimbursement, amortization or any
                              other that implies the obligation to pay its value
                              by MSR or any of its members, unless MSR or the
                              said members agree to do it,

                                      -2-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 3

                        a.9.  it shall be governed by clause 8th (eighth) of the
                              bylaws of MSR; consequently, among other
                              consequences of the application of the said
                              clause, the members of MSR shall enjoy the right
                              of first refusal to purchase the Participation
                              Certificate,

                        a.10. it shall not give its owner any rights on MSR's
                              assets, goods, rights, or privileges nor on the
                              Project,

                        a.11. it shall not impose on its owner the obligation to
                              be responsible for the losses of the Project or
                              else for the losses of MSR, in any percentage,

                        a.12. it shall not give its owner any participation in
                              the development of the Project nor in the
                              operation or administration of the mine other than
                              the participation expressly set forth in
                              subsections (a.4) and (a.5) of section (A) of this
                              clause 2 (two),

                        a.13. it shall give its owner no assurance or guaranty
                              that the Project and the mine shall ultimately
                              turn out to be profitable or that they shall
                              generate profits or dividends, given the
                              unpredictable nature of all mining businesses, and

                        a.14. it shall not give its owner the right that the
                              Project gets actually executed or carried out or
                              executed or carried out in any of its Phases nor
                              the right that the mine be exploited or operated,
                              for whether or not that will be done will
                              ultimately depend on market, financial, and other
                              circumstances that are not within the MSR's
                              control.

                        For the purposes of subsection (a.1) section (A) of this
                        clause 2 (two), "profits" shall mean those determined
                        pursuant to generally accepted Mexican accounting
                        principles and those MSR's members ordered paid as
                        dividends pursuant to MSR's bylaws, and, in any event,
                        those resulting after payment of taxes, after payment of
                        the employees' share in the business' profits (PTU),
                        after payments of the amounts due by MSR or its
                        affiliates pursuant to an Stock Purchase Option
                        Agreement entered into between AngloGold (Jerritt
                        Canyon) Corp. and AngloGold North America Inc., of the
                        one part, and Leadville Mining & Milling Corporation and
                        Leadville Mining & Milling Holding Corporation, of the
                        other part, on December 15 (fifteen), 2000 (two
                        thousand), of which an authentic copy was attached to
                        the Contract, and after payment of the amounts owing by
                        MSR to whomever finances the development or execution of
                        the Project, if that is the case. This agreement does
                        not affect or modify any of

                                      -3-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 4

                        AngloGold (Jerritt Canyon) Corp.'s and AngloGold North
                        America Inc.'s rights under the above Stock Purchase
                        Option Agreement.

                  b.    Within the 5 (five) calendar days following the approval
                        of the hereinbefore mentioned bylaws amendment, MSR
                        shall issue and deliver the Participation Certificate to
                        FG and shall have the issuance and delivery entered on
                        the company's corporate books.

            B.    At the latest within 30 (thirty) calendar days following the
                  Effective Date, MSR shall have Capital Gold Corporation
                  ("CGC") shall issue for the benefit of and deliver to FG
                  2,000,000 (two million) shares of its capital stock ("the CGC
                  Shares"), non transferable before the lapse of 1 (one) year,
                  from the date they are delivered to FG, and subject to the
                  regulations of the Securities and Exchange Commission of the
                  United States of America. In order for that issuance and
                  delivery to be possible and lawful pursuant to the laws and
                  provisions that govern the CGC Shares, FG shall expeditiously
                  sign and deliver to CGC or to the said Securities and Exchange
                  Commission, such documents and information as may be required
                  from it. In addition, with respect to the acquisition of the
                  CGC Shares, FG makes the representations and warranties set
                  forth in the attached Exhibit hereto.

            C.    MSR shall give FG the right of first refusal to carry out the
                  works and render the construction services called for by the
                  construction of the Project, on equal terms in relation to
                  other bidders regarding prices, times, qualities, guaranties,
                  and other conditions, as specified by MSR in its requests for
                  bids. This rule may suffer exceptions if whoever finances the
                  development or execution of the Project determines that the
                  above construction works or services be carried out or
                  rendered by company or companies other than FG. The
                  construction of the said works and the rendering of those
                  construction services by FG, to be carried out pursuant to
                  contracts hereinafter called "the Works Contracts," shall not
                  turn FG into an industrial partner of MSR or of the Project,
                  or of both. MSR shall not disclose to other bidders FG's bids
                  or offers, unless it must disclose them by final court or
                  administrative authority order, under penalty of payment of
                  damages and indemnification of losses, without prejudice to
                  other legal remedies that FG might have in this regard

      3.    During the term of the Contract, FG failed to contribute the sum of
            US$126,144 (one hundred twenty-six thousand one hundred forty-four
            dollars of the United States of America) for the execution of Phase
            II of the Project, which sum had to be contributed by MSR, with its
            own funds or with funds borrowed from third parties. MSR irrevocably
            forgives FG the payment of the above amount, likewise as
            consideration of FG's acceptance of the Participation Certificate.

                                      -4-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 5

      4.    Each party shall pay the taxes which, as the case may be, are to be
            due by it in connection with the making of this agreement and in
            connection with the discharging of its obligations and the
            exercising of its rights hereunder, without being entitled to
            reimbursement, compensation, or apportionment of any kind
            whatsoever, and each party shall hold the other party and its
            shareholders, affiliates, subsidiaries, directors, attorneys in
            fact, employees, and consultants, free and clear of claims,
            assessments, auditings, proceedings, and charges relating to the
            taxes due by it, and each party shall pay or reimburse to the other
            party or any of its shareholders, affiliates, subsidiaries,
            directors, attorneys in fact, employees, and consultants, the
            reasonable attorneys' and accountants' fees and court fees and
            expenses that the other party had to pay to defend from any such
            claims, assessments, auditings, proceedings, and charges.

      5.    At the latest within 30 (thirty) calendar days following the
            Effective Date, FG shall deliver to MSR all the maps, calculations,
            assay results, and documents in general in its possession relating
            to the Project, generated by FG, by MSR, or by any other persons,
            and the discharging of this obligation shall not give FG a right to
            receive any additional payment coming from MSR or from any other
            person.

      6.    At the latest within 30 (thirty) calendar days following the
            Effective Date, FG shall assign or otherwise transfer to MSR all the
            permits, licenses, consents, or authorizations, regardless of the
            name the laws or regulations give them, which, if that was the case,
            FG had applied for and obtained in its name in connection with the
            execution or development of the Project if the said permits,
            licenses, consents, or authorizations are assignable or
            transferable. FG hereby shall be deemed giving its irrevocable
            consent for the cancellation or deprival of effects of the said
            permits, licenses, consents, or authorizations in the event such
            consent were necessary for the same, or any of them, to be issued or
            re-issued in the name of MSR, and the granting of such consent shall
            not give FG a right to receive any additional payment coming from
            MSR or from any other person.

      7.    As between FG and CGC there has not been and there will not be any
            legal or business relationship of any kind different from the one
            that there will exist derived from the ownership of the CGC Shares
            by FG. Additionally, nothing of what has been agreed upon in this
            agreement turns or shall turn CGC into a party of this agreement, a
            member, partner, silent partner, or active partner of FG, or MSR's
            joint and several obligor, in any manner whatsoever, or gives or
            shall give FG right or action of any kind as against CGC different
            from the ones that shall derive to FG from its ownership of the CGC
            Shares, and FG and CGC shall refrain from affirming that between
            them there is a legal or business

                                      -5-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 6

            relationship different from the one to exist as a result of the
            ownership of the CGC Shares.

      8.    Once MSR gets CGC to issue and deliver to FG the CGC Shares, MSR's
            obligations relating to the CGC Shares shall terminate, and there
            shall be no other obligation on MSR to perform in connection with
            the CGG Shares. Consequently, among other consequences of the said
            termination, FG shall hold MSR and its shareholders, affiliates,
            subsidiaries, directors, attorneys in fact, employees, and
            consultants, free and clear of complaints, claims, proceedings,
            accusations, and charges relating to the CGC Shares, and FG shall
            pay or reimburse to MSR and its shareholders, affiliates,
            subsidiaries, directors, attorneys in fact, employees, and
            consultants, the reasonable attorneys' and accountants' fees and
            court fees and expenses that MSR and any of its shareholders,
            affiliates, subsidiaries, directors, attorneys in fact, employees,
            and consultants, had to pay to defend from any such complaints,
            claims, proceedings, accusations, and charges.

      9.    As of and from the Effective Date, the only legal and business
            relationships that shall exist as between MSR and FG shall be those
            derived from this agreement, from the Participation Certificate, and
            from the Works Contracts, if any, that MSR enters into with FG
            pursuant to section (C) of clause 2 (two) hereof. Consequently,
            nothing of what has been agreed upon in this agreement or to be
            agreed upon in the Works Contracts or the issuance and delivery of
            the Participation Certificate shall turn FG into a member, partner,
            silent partner, or active partner of MSR, or gives or shall give FG
            right or action of any kind as against MSR different from the ones
            that shall derive to FG from this agreement, from the Participation
            Certificate, or from the Works Contracts.

      10.   The employees and consultants of FG shall continue to be FG's
            employees and consultants, notwithstanding that FG had employed them
            in activities relating with the execution or development of the
            Project, and the employees and consultants of MSR shall continue to
            be MSR's employees and consultants, notwithstanding that MSR had
            employed them in activities relating with the execution or
            development of the Project. Consequently, among other consequences
            ensuing from this clause, the employees and consultants of one party
            shall not be deemed employees and consultants of the other party and
            no employer substitution of any kind shall take place as regards the
            employees of both parties. Neither FG nor MSR assume or shall assume
            any labor-law related obligations, the tax obligations, the social
            security obligations, and of any other kind whatsoever relating to
            the employees and consultants that the other party had employed in
            activities relating to the execution or development of the Project,
            whether or not the party had hired or paid them with the other
            party's consent and within the framework of the Contract.

                                      -6-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 7

      11.   This agreement substitutes, terminates, and makes ineffectual any
            verbal or written discussions, negotiations, communications, or
            understandings previous or contemporaneous to the Effective Date.
            There has not been, there are no, and there shall be no verbal
            accord, arrangement, or understanding that modify, substitute,
            supersede, novate, or terminate this agreement nor the acts derived
            or to be derived from the same. All modifications to this agreement
            and to the acts derived from it must be agreed in writing and signed
            by both parties, and they shall not bind without that formality
            being fulfilled.

      12.   Each party hereto undertakes to sign and deliver in an expeditious
            manner to the other party or to the competent authorities any other
            documents or agreements or communications conducive to the
            achievement of the goals and the realizations of the provisions
            agreed herein, all of the above in this clause in MSR's exclusive
            discretion.

      13.   FG and MSR shall take all the steps deemed convenient or necessary
            for the dissolution and liquidation of the unincorporated
            association created by the Contract. The fees, expenses, and costs
            associated with the dissolution and liquidation of the
            unincorporated association shall be paid in a 95% (ninety-five
            percent) by MSR and in a 5% (five percent) by FG, without
            entitlement to reimbursement, compensation, or apportionment of any
            kind whatsoever.

      14.   MSR shall not undertake a mining project other than the Project,
            without prejudice to MSR's rights to abandon one or more of the
            claims encompassed in the Project and to add claims to it, or to
            regroup claims, and without prejudice to MSR's rights pursuant to
            the Mining Law and its Regulation.

      15.   All notices, notifications, or communications given or due to be
            given in regard to this agreement and the acts derived therefrom
            shall be delivered or sent to the following addresses, unless the
            parties indicate others at least 15 (fifteen) calendar days in
            advance of the date in which the change of domicile is meant to take
            effect:

            (A) If they are for MSR:

            Minera Santa Rita S. de R. L. de C.V.
            76 Beaver Street
            Suite 500
            New York NY 10005
            U.S.A.

            To the attention of: Jack Veeder Everett and Roger Austin Newell

                                      -7-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 8

            With copy for: Eduardo Robles Elias o Jose Joaquin Cabrera Ochoa,
            Boulevard Hidalgo 64, Colonia Centenario, Hermosillo, Sonora 83260

            (B) If they are for FG:

            Grupo Minero FG S.A. de C.V.
            Calle del Cobre 91
            Entre Calle del Yeso y Los Nogales
            Hermosillo, Sonora 83299

            To the attention of: Samuel Fraijo Flores

            With copy for: Daniel Gutierrez Perez, Calle del Cobre 91, entre
            Calle del Yeso y Los Nogales, Hermosillo, Sonora 83299

            Unless otherwise agreed in this agreement, the notices,
            notifications, or communications referred to in this clause shall
            take affect on the business day immediately following the day on
            which they have effectively been received or delivered to the other
            party (even if a copy of the notice, notification, or communication
            has not been sent or delivered to the persons to whom they must be
            copied), at the above indicated addresses, to the party to which
            they were directed or to any employee, director, officer, or to any
            individual of age who resides in the domicile of the party's agent.
            If the post is used, the notices, communications, and notifications
            shall always be sent by registered mail, return receipt requested.

      16.   All the controversies or disputes that arise between MSR and FG in
            regard to this agreement, to the Works Contracts, and to the
            Participation Certificate shall be settled or resolved by a
            competent judge sitting in Hermosillo, Sonora, pursuant to the
            applicable Mexican substantive and procedural laws, for which MSR
            and FG waive the jurisdiction and venue of any other judges or
            tribunals that may be indicated by reason of territory, address,
            main location where they carry out their businesses, and other
            similar reasons or circumstances.

      17.   As a consequence of what has been agreed herein, each party hereto
            grants to the other party irrevocable payment receipt and releasing
            settlement as regards all its obligations stemming from the
            Contract, effective as of the Effective Date.

      18.   This agreement may be signed in English and in Spanish, but the
            Spanish version shall prevail in case of discrepancy. An exception
            to the preceding rule shall be the stipulations and definitions
            contained in the Exhibit hereto, which

                                      -8-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 9

            shall also be signed in English and in Spanish, and whose English
            version shall prevail in case of discrepancy.

      19.   Any of the parties hereto shall be entitled to have this agreement
            formalized by a Notary Public's instrument and registered with the
            Public Commerce Registry, on its own behalf and in the name and on
            behalf of the other party, in which case the fees, expenses, and
            registration fees shall be on the party that performs those actions,
            without being entitled to reimbursement, compensation, or
            apportionment of any kind whatsoever. The right and the
            representation agreed upon in this clause shall be deemed
            irrevocable.

      20.   This agreement has neither been negotiated nor signed under the
            influence or determination of fraud, bad faith, violence,
            unlawfulness, overreaching, mistake, reverential fear, or inability
            or under any other defect of the will or of the consent.

Well informed as to the legal reach and scope of this agreement, the parties
sign it in full conformity and make it binding in all legal respects in 4 (four)
original copies, each of which shall be considered an original and shall be
equally valid, in Hermosillo, Sonora, the representative of FG on April 6 (six),
2004 (two thousand and four), and in the United States of America the
representatives of MSR on April 8 (eight), 2004 (two thousand and four), but
effective as of and from the Effective Date.

                        For Grupo Minero FG S.A. de C.V.

                             -----------------------
                              Samuel Fraijo Flores,
                               Sole Administrator

                Witness to the execution by Samuel Fraijo Flores:

                            ------------------------
                            Daniel Gutierrez Cibrian

                    For Minera Santa Rita S. de R. L. de C.V.

                  --------------------------------------------
                  Jack Veeder Everett and Roger Austin Newell,
                                Attorneys in fact

                                      -9-
<PAGE>

Minera Santa Rita S. de R.L. de C.V. and
Grupo Minero FG S.A. de C.V.
Amendment Agreement
January 7, 2004
Page 10

                          Witnesses to the execution by
                   Jack Veeder Everett and Roger Austin Newell

                          ----------------------------

Exhibit
    to the Termination Agreement entered into between Minera Santa Rita S. de
    R. L. de C.V., of the one part, and Grupo Minero FG S.A. de C.V. ("FG"),
           of the other part, effective as of and from March 31, 2004

a. Investment Purpose . FG is acquiring the CGC Shares, for its own account for
investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or
exempted under the United States Securities Act of 1933, as amended (the "1933
Act").

b. Accredited Investor Status . FG is an "accredited investor" as that term is
defined in Rule 501(a)(3) of Regulation D under the 1933 Act and was not
organized for the specific purpose of acquiring the shares.

                                   Traduccion

a. Objeto de la Inversion. FG adquiere las Acciones CGC por su cuenta solo para
fines de inversion y sin miras a la venta o distribucion publica de las mismas y
sin miras a la reventa relacionada con dicha venta o distribucion publica, salvo
que fuese de conformidad con una venta registrada o exenta en los terminos de la
Ley de Valores de los Estados Unidos de America de 1933, segun ha sido
modificada (la "Ley de 1933").

b. Calidad de Inversionista Acreditado. FG es un "inversionista acreditado" tal
como se define dicho termino en la Norma 501(a)(3) del Reglamento D de la Ley de
1933 Act y no fue constituido con el objeto especifico de adquirir las acciones.

                                      -10-

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