Document:

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                                                                   EXHIBIT 10.1

                     RESTATED AND AMENDED SERVICE AGREEMENT

                                 BY AND BETWEEN
                               NEXTCARD, INC. AND
                       FDIC AS RECEIVER OF NEXTBANK, N.A.

        This Restated and Amended Service Agreement (including the exhibits
hereto, collectively the "AGREEMENT") effective as of March 1, 2002 (the
"EFFECTIVE DATE") is made by and between NextCard, Inc., a Delaware corporation,
("NEXTCARD") and the Federal Deposit Insurance Corporation - Receiver
("FDIC-R"), as receiver of NextBank, National Association (the "BANK") and is
based upon the following facts.

        A. On February 7, 2002, the Office of the Comptroller of the Currency
closed the Bank and appointed the FDIC-R as receiver of the Bank, whereupon the
FDIC-R succeeded to all rights, title, powers and privileges of the Bank and,
pursuant to Section 1821 of Title 12, United States Code, is delegated with the
power to conduct all business of the Bank and to preserve and conserve the
Bank's assets and property.

        B. NextCard and the Bank are parties to a Service Agreement dated
September 16, 1999 (the "SERVICE AGREEMENT"), pursuant to which, among other
things, NextCard agreed to perform certain servicing functions for the Bank's
credit card portfolio.

        C. There exists a Capital Assurance Agreement, dated October 26, 2000
(the "CAPITAL ASSURANCE AGREEMENT"), a copy of which is attached hereto as
EXHIBIT 1.

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        E. The FDIC-R has determined, consistent with its powers and
authorities, that it is in the best interests of the Bank that NextCard continue
to perform certain agreed-upon licensing and maintenance functions for the
Bank's credit card portfolio for the term of this Agreement, under the terms and
conditions set forth herein.

        F. So long as each party hereto remains in material compliance with each
and every term of this Agreement, and only for the period described in the
Agreement, the parties hereto shall be obligated to perform as set forth herein

        NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, NextCard and the FDIC-R, intending to be legally
bound hereby agree as follows:

                                    ARTICLE 1
                         RESTATED AND AMENDED PROVISIONS

           1.1 This Agreement constitutes the amended and restated Service
Agreement. Except as restated in their entirety below, all provisions of the
Service Agreement are terminated by mutual agreement as of the Effective Date.

           1.2 License

               1.2.1 NextCard hereby grants to FDIC-R a royalty-free,
non-exclusive, non-transferable worldwide license to use, during the term of
this Agreement, NextCard's Intellectual Property (which, for purposes of this
Agreement, shall include all trade and service marks, copyrights, patents, trade
secrets and all other information and know-how as well as any systems

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                                          Restated and Amended Service Agreement
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enhancements made available to FDIC-R from time to time by NextCard) for the
purpose of servicing credit card accounts (the "NEXTBANK ACCOUNTS").

            1.2.2 Subject to the terms of this Agreement, the NextCard
Intellectual Property is and shall remain the sole and exclusive property of
NextCard, free from any claim (other than the licenses granted herein) on the
part of FDIC-R. FDIC-R shall have no right to disclose, reproduce, use, display
or distribute any of the NextCard Intellectual Property except as expressly
permitted by this Agreement.

        1.3 Website Operation

            1.3.1 NextCard will own and operate an Internet site on the World
Wide Web to be located at "www.nextcard.com" (the "WEBSITE"), subject to the
following provisions:

                  1.3.1.1 During the term of this Agreement NextCard shall be
responsible for the operations of the Website, including the development,
maintenance and the upkeep of the Website and its operations. The parties agree
that the NextCard may subcontract operations or activities to third-parties,
each of whom will be bound by the Confidentiality provisions set forth in
Section 1.5 hereof.

                  1.3.1.2 FDIC-R and its Bank's customers shall have unlimited
use of the Website for purposes of the operations of NextBank and servicing of
NextBank Accounts.

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                                          Restated and Amended Service Agreement
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        1.4 Ownership and Administration of Data

            1.4.1 NextCard agrees that all information relating to the customer
relationship between holders of NextBank Accounts and the FDIC-R, including
without limitation all books and records of such accounts, the First Data
Resources Master File, all account forms, all customer correspondence,
cardholder agreements, physical plastics, cardholder lists and consumer notices
relating to such accounts ("NEXTBANK ACCOUNT INFORMATION") is the property of
the FDIC-R.

            1.4.2 FDIC-R shall have unrestricted access to all NextBank Account
Information. Upon FDIC-R's request at any reasonable time or times while this
Agreement is in effect, NextCard shall immediately deliver to FDIC-R, at
FDIC-R's expense, any or all NextBank Account Information held by NextCard
pursuant to this Agreement in the form requested by FDIC-R.

            1.4.3 NextCard shall maintain in accordance with the back-up
procedures maintained by NextCard in connection with its own data processing, as
such may be revised from time to time, duplicate copies of all records and data,
except current work in process, necessary to enable the reconstruction of the
NextBank Account Information maintained by NextCard, and to permit FDIC-R to
continue its operations in the event of damage to or destruction of NextCard's
data processing facilities. NextCard shall maintain any other safeguards against
the destruction, loss or alteration of any such data or the interruption of data
processing services, which it employs in connection with its own data
processing, or which shall be required under law or regulation applicable to
FDIC-R or NextCard.

            1.4.4 Should any NextBank Account Information be lost or destroyed
due to any negligent act or omission of NextCard or any other breach of the
security obligations of this

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                                          Restated and Amended Service Agreement
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Agreement, NextCard will be responsible at its own expense for the prompt
reconstruction of such NextBank Account Information with high priority
allocation of time and resources to complete the regeneration as quickly as
possible.

        1.5 Confidentiality Matters

            1.5.1 It is understood that, in the performance by NextCard of the
services described herein, NextCard may have access to private or confidential
information of FDIC-R's employees and cardholders, including, without
limitation, NextBank Account Information, and that FDIC-R may have access to
confidential information regarding the operation of NextCard's computer systems.
Each party shall use that degree of care it exercises to protect its own private
or confidential information to keep, and to have its employees and agents keep,
any and all private or confidential information of the other party strictly
confidential and to use such information only for the purpose of the services to
be performed under this Agreement or as otherwise agreed to in writing by the
other party. Each party shall disclose such information only to its employees or
agents required to have access thereto for the performance of this Agreement.

            1.5.2 NextCard's and FDIC-R's obligations and agreements under the
proceeding Section shall not apply to any information supplied that:

                  (a)     was known to the receiving party prior to the
                          disclosure by the

                          other;

                  (b)     is or becomes generally available to the public other
                          than by breach of this Agreement; or

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                                          Restated and Amended Service Agreement
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                  (c)     otherwise becomes lawfully available on a
                          nonconfidential basis from a third party that is not
                          under an obligation of confidence to the other party.

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           1.7 Cooperation. Each of the parties hereto shall cooperate fully
with the other in furnishing information, making its employees available or
otherwise in discharging the obligations set forth in this Agreement.

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                                    ARTICLE 6
                               FURTHER ASSURANCES

        6.1 NextCard shall further provide FDIC-R with such additional
information as is reasonably necessary for FDIC-R to determine whether NextCard
is in compliance with this Agreement and its obligations hereunder and shall
cooperate fully with the FDIC-R's reasonable requests with respect to the
assignment of any agreement that FDIC-R may designate for assignment to itself
or a third party.

        6.2 In the event that either party shall be in material default with
respect to any of the terms or conditions set forth herein, the non-defaulting
party shall serve upon the defaulting party a notice of default identifying the
provisions of this Agreement with which the

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                                          Restated and Amended Service Agreement
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defaulting party has failed to comply. Thereafter, unless otherwise agreed to by
the non-defaulting party, the defaulting party shall have five (5) business days
to show that such default has not occurred or has been cured. If the default
cannot be cured with reasonable diligence during such five (5) business days,
such five (5) business day period shall be extended for such addition period as
may be required with diligence and good faith to cure such failure.

        6.3 From time to time, and upon two (2) business days' notice, NextCard
shall provide the FDIC-R, its attorneys, accountants, employees and agents with
access to (a) its premises during reasonable business hours for the purpose of
examining and appraising performance of this Agreement and (b) its detailed
books and records (including all relevant supporting documentation) for the
purpose of examination and appraising performance of this Agreement.

        6.4 Counsel to NextCard shall maintain regular communication with the
FDIC-R's counsel concerning NextCard's attempt to reorganize and with respect to
the development of plans of reorganization.

        6.5 The parties shall from time to time after the Effective Date execute
and deliver such further instruments and documents, and take such further
actions, as either party may reasonably request in order to effectuate or
evidence, or further effectuate or evidence, the transactions contemplated by
this Agreement.

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                                    ARTICLE 8
                                     NOTICES

        8.1 All notices required to be given hereunder shall be in writing and
made by hand delivery, certified mail, private overnight mail courier service,
or by facsimile transmission. Notice by hand delivery, certified mail or
overnight courier shall be deemed delivered when received and notice by
facsimile transmission shall be deemed delivered when receipt of the
transmission by the receiving facsimile machine has been confirmed. All notices,
if to FDIC-R, shall be delivered to:

                      Federal Deposit Insurance Corporation
                         as receiver for NextBank, N.A.
                      Frank Campagna, RIC
                      1910 Pacific Avenue
                      Dallas, TX  75201
                      Tel: 972-761-8025
                      Fax: 972-761-2250

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                                          Restated and Amended Service Agreement
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                      Federal Deposit Insurance Corporation
                      as receiver for NextBank, N.A.
                      Thomas J. O'Keefe, Jr.
                      1910 Pacific Avenue
                      Dallas, TX  75201
                      Tel: 972-761-8254
                      Fax: 972-761-2250

                      with copies to:

                      Thad Fenton, Esq.
                      Steve Pruss, Esq.
                      Mary Riche, Esq.
                      FDIC Legal Division
                      1910 Pacific Avenue
                      Dallas, TX  75201
                      Tel: 800-568-9161
                      Fax: 972-761-2495

                All notices, if to NextCard, shall be delivered to:

                      NextCard, Inc.
                      John Hashman
                      Robert Linderman
                      595 Market Street - Suite 1800
                      San Francisco, CA  94105
                      (415) 836-9700
                      (415) 836-9701 (fax)

                      with copies to:

                      Kathryn Coleman, Esq.
                      Gibson, Dunn & Crutcher, LLP
                      One Montgomery Street
                      Telesis Tower - 26th Floor
                      San Francisco, CA  94104-4505

                      William S. Eckland, Esq.
                      Sidley Austin Brown & Wood LLP
                      1501 K Street, N.W.
                      Washington, DC  20005

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                                          Restated and Amended Service Agreement
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                                    ARTICLE 9
                          RESOLUTION OF DISPUTES, ETC.

        9.1 Disputes. Any dispute, controversy or claim arising out of or
relating to this Agreement or the negotiation hereof or entry hereunto or any
contract or agreement entered into pursuant hereto or the performance by the
parties of its terms shall first be the subject of good faith negotiation
between the parties. If the parties are, within two (2) business days, unable to
reach a mutually agreeable resolution, further disputes may be settled by any
court with jurisdiction over the parties.

        9.2 Assignment. Except as expressly provided herein, the rights and
obligations of a party hereunder may not be assigned, transferred or encumbered
without the prior written consent of the other party.

        9.3 Parties in Interest. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by the respective successors and permitted
assigns of the parties hereto, including any trustee appointed under the
Bankruptcy Code. Nothing contained herein shall be deemed to confer upon any
other person any right or remedy under or by reason of the Agreement. In fact,
it is expressly agreed that there are no third party beneficiaries under this
Agreement. Notwithstanding the general nature of the preceding sentence, none of
the employees of NextCard nor any of the vendors of goods and services to
NextCard for meeting its obligation to the FDIC-R under this Agreement, shall be
deemed a beneficiary of this Agreement. None of those described in the previous
sentence have any claim against the FDIC-R, except as set forth in any escrow
agreement described herein. By entering into this

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                                          Restated and Amended Service Agreement
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Agreement, the FDIC-R does not assume any of the obligations of NextCard to its
employees or to its other creditors other than as expressly set forth herein.

        9.4 Law Governing Agreement. This Agreement shall be construed and
interpreted according to federal law, and in the absence thereof, to the
internal laws of the California, excluding any choice of law rules that may
direct the application of the laws of another jurisdiction.

        9.5 Amendment and Modification. The parties may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing, provided however that no amendment, modification or supplement shall be
effective unless in writing and signed by both parties.

        9.6 Expenses. Except as otherwise provided herein, each of the parties
shall bear its own expenses and the expenses of its counsel and other agents in
connection with the transactions contemplated hereby and the negotiation and
effectuation of this Agreement.

        9.7 Entire Agreement. The parties intend that the Agreement be
interpreted without regard to any prior oral or written understandings,
representations, disclosures, investigations or agreements. This Agreement,
including the exhibits hereto and any other instruments delivered
contemporaneously herewith, embodies the entire agreement between the parties
hereto with respect to the transactions contemplated herein, and there have been
and are no agreements, representations or warranties between the parties other
than those set forth or provided for herein or in any instrument delivered
contemporaneously with the delivery hereof. This Agreement is effective as of,
and from and after, the Effective Date, and shall be given full retroactive
effect to the Effective Date, notwithstanding the date on which the parties
execute and deliver this Agreement.

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                                          Restated and Amended Service Agreement
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        9.8 Waiver of Breach, Right or Remedy. The waiver by any party of any
breach or violation by another party of any provision of this Agreement or of
any right or remedy of the waiving party in this Agreement (a) shall not waive
or be construed to waive any subsequent breach or violation of the same
provision, (b) shall not waive or be construed to waive a breach or violation of
any other provision, and (c) shall be in writing and may not be presumed or
inferred from any party's conduct. Except as expressly provided otherwise in
this Agreement no remedy conferred by this Agreement is intended to be exclusive
of any other remedy, and each and every remedy shall be in addition to every
other remedy granted in this Agreement or now or hereafter existing at law or in
equity, by statute or otherwise. The election of any one or more remedies by a
party shall not constitute a waiver of the right of such waiving party to pursue
other available remedies.

        9.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement and any
amendments hereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement
and shall be considered to have the same binding legal effect as if it were the
original signed version thereof delivered in person. At the request of a party,
any other Party hereto so executing and delivering this Agreement or any
amendment hereto by means of a facsimile machine shall reexecute original forms
thereof and deliver them to the requesting Party. No Party hereto or to any such
amendment shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement was transmitted or communicated through
the use of a facsimile machine as a defense to the formation or enforceability
of a contract and each such Party forever waives any such defense.

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                                          Restated and Amended Service Agreement
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        9.10 Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

        9.11 Time Is Of Essence. Time of the essence in the performance of this
Agreement. This section may be waived only in a writing expressly referring
hereto.

        9.12 Gender and Number. Reference in this Agreement to any gender or
number shall be deemed to refer to the masculine, feminine, neuter, singular
and/or plural, as the sense of the context requires. As used herein (or in any
document delivered pursuant hereto), unless the context otherwise requires, the
word "or" is not exclusive.

        9.13 Relationship of Parties. The relationship of NextCard to Bank under
this Agreement is that of independent contractor. Nothing herein shall be
construed as constituting a partnership, joint venture, or agency between the
parties.

        9.15 Licenses and Authorizations. Each party agrees that it will obtain
all licenses and other governmental authorizations and approvals required for
the performance of its obligations under this Agreement and will perform its
obligations hereunder in accordance with all applicable federal, state and local
laws, rules, and regulations now or hereafter in effect.

        9.16 This Agreement shall not be repudiated under 12 U.S.C. Section
1821(e) by the FDIC-R or any successor thereto.

        9.17 Each party represents and warrants to the other that such party has
the full corporate power to execute, deliver and perform this Agreement, and to
fully discharge its obligations hereunder.

        9.18 Nothing contained herein shall be deemed a waiver or release of any
claims held by the FDIC-R against or relating to any of the Bank's directors,
officers or any professionals.

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                                          Restated and Amended Service Agreement
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Dated: March 4, 2002

FEDERAL DEPOSIT INSURANCE CORPORATION,
as Receiver for NextBank, N.A.

By:
   -----------------------------------
   Name:
   Title:

NEXTCARD, INC.

By:
   -----------------------------------
   Name:
   Title:<PAGE>

                                                           Exhibit No. 10(ii)(a)

                             2002 STOCK OPTION PLAN
                                       OF
                             FANZ ENTERPRISES, INC.

         1. PURPOSE OF THE PLAN. This 2002 Stock Option Plan of FanZ
Enterprises, Inc. adopted on this 20th day of May, 2002, is intended to enable
officers and other key employees and consultants of the Company and its
Subsidiaries to acquire or increase their ownership of common stock of the
Company on reasonable terms. The opportunity so provided is intended to foster
in participants an incentive to put forth maximum effort for the continued
success and growth of the Company and its Subsidiaries, to aid in retaining
individuals who put forth such efforts, and to assist in attracting the best
available individuals to the Company and its Subsidiaries in the future.

         2. DEFINITIONS. When used herein, the following terms shall have the
meaning set forth below:

            2.1 "BOARD" means the Board of Directors of FanZ Enterprises, Inc.

            2.2 "CHANGE IN CONTROL" means a change in control of the Company as
     a result of the occurrence of any of the following events:

                  (a) any person (as such term is used in Sections 13(d) and
         14(d) of the Exchange Act) other than an Exempt Person (an "Acquiring
         Person") is or becomes the beneficial owner, directly or indirectly, of
         Shares of the Company representing more than fifty percent (50%) of the
         combined voting power of the Company's then outstanding voting
         securities, other than either in connection with an issuance of Shares
         or series of related issuances of Shares approved by the Board (which
         Board must include at least a majority who were Continuing Directors
         and which transaction or series of related transactions must have been
         approved by a majority of the Continuing Directors) or as the result of
         the reduction in the number of issued and outstanding Shares pursuant
         to a transaction or series of related transactions approved by the
         Board;

                  (b) there shall cease to be a majority of the Board comprised
         of Continuing Directors; or

                  (c) (i) the stockholders of the Company approve a merger or
         consolidation of the Company with any other entity, other than a merger
         or consolidation which would result in the voting securities of the
         Company outstanding immediately prior thereto continuing to represent
         more than fifty percent (50%) of the combined voting power of the
         voting securities of the Company or such surviving entity outstanding
         immediately after such merger or consolidation, or (ii) the
         stockholders of the Company approve a plan of complete liquidation of
         the Company or an agreement for the sale or disposition by the Company
         of all or substantially all the Company's assets (other than to a more
         than fifty percent (50%) subsidiary or other controlled person of the
         Company).
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            2.3 "CODE" means the Internal Revenue Code of 1986, as amended, as
         in effect at the time of reference, or any successor revenue code which
         may hereafter be adopted in lieu thereof, and reference to any specific
         provisions of the Code shall refer to the corresponding provisions of
         the Code as it may hereafter be amended or replaced.

            2.4 "COMMITTEE" means the Compensation Committee of the Board or any
         other committee appointed by the Board which is invested by the Board
         with responsibility for the administration of the Plan.

            2.5 "COMPANY" means FanZ Enterprises, Inc.

            2.6 "CONTINUING DIRECTOR" means a director of the Company who is not
         an Acquiring Person or an affiliate or associate thereof or any of
         their representatives and who was either a director of the Company
         before any Person became an Acquiring Person or whose nomination or
         election to the Board was recommended or approved by a majority of the
         then Continuing Directors or by an Exempt Person.

            2.7 "EMPLOYEES" means officers (including officers who are members
         of the Board), and other key employees of the Company or any of its
         Subsidiaries.

            2.8 "ERISA" means the Employee Retirement Income Security Act of
         1974, as in effect at the time of reference, or any successor law which
         may hereafter be adopted in lieu thereof, and any reference to any
         specific provisions of ERISA shall refer to the corresponding
         provisions of ERISA as it may hereafter be amended or replaced.

            2.9 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as in
         effect at the time of reference, or any successor law which may
         hereafter be adopted in lieu thereof, and any reference to any specific
         provisions of the Exchange Act shall refer to the corresponding
         provisions of the Exchange Act as it may hereafter be amended or
         replaced.

            2.10 "EXEMPT PERSON" means the Company, any Subsidiary thereof, any
         employee benefit plan of the Company or any Subsidiary thereof, any
         entity holding Shares for or pursuant to the terms of any such plan,
         and any stockholder as of the close of business on the date the Plan is
         adopted by the Board or any affiliate of any such stockholder.

            2.11 "FAIR MARKET VALUE" means with respect to the Shares, the fair
         market value determined in good faith by the Committee, in its
         discretion, which determination may, but need not, be based on (i) the
         advice of an independent financial advisor (which may be the Company's
         regular outside auditors) or (ii) the last known price per Share paid
         by a purchaser in an arm's length transaction; provided, however, that
         if there shall be a public market for the Shares, Fair Market Value
         shall mean (i) the closing price of the Shares on the principal stock
         exchange on which Shares are then traded or admitted to trading, on the
         last business day prior to the date on which the value is to be
         determined, (ii) if no sale takes place on such day on any such
         exchange, the average of the last reported closing bid and asked prices
         on

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         such day as officially quoted on any such exchange, or (iii) if the
         Shares are not then listed or admitted to trading on any such exchange,
         the average of the last reported closing bid and asked prices on such
         day on the over-the-counter market. For purposes of (i) above, the
         National Association of Securities Dealers National Market System shall
         be deemed a principal stock exchange. If there shall be a public market
         for the Shares, and the foregoing references are unavailable or
         inapplicable, then the Fair Market Value shall be determined on the
         basis of the appropriate public market price indicator as determined by
         the Committee, in its sole discretion. Notwithstanding the foregoing,
         with respect to Options granted on, or as of, the date of the closing
         of the Company's initial public offering of Shares pursuant to a
         registration statement under the Securities Act of 1933, as amended,
         which has been filed with, and declared effective by, the Securities
         and Exchange Committee, Fair Market Value means the initial price at
         which Shares are sold in such offering.

            2.12 "INCENTIVE STOCK OPTION" means an Option intending to meet the
         requirements and containing the limitations and restrictions set forth
         in Section 422 of the Code and designated in the Option Agreement as an
         Incentive Stock Option.

            2.13 "NON-QUALIFIED STOCK OPTION" means an Option other than an
         Incentive Stock Option.

            2.14 "OPTION" means the right to purchase the number of Shares
         specified by the Committee, at a price and for a term fixed by the
         Committee, in accordance with the Plan, and subject to such other
         limitations and restrictions as the Plan and the Committee may impose.

            2.15 "OPTION AGREEMENT" means a written agreement in such form as
         may be, from time to time, hereafter approved by the Committee, which
         shall be duly executed by the Company and the Participant and which
         shall set forth the terms and conditions of an Option under the Plan.

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

            2.17 "PARTICIPANTS" means Employees and key consultants of the
         Company or any of its Subsidiaries.

            2.18 "PERSON" means any individual, partnership, corporation, trust,
         limited liability company, or other entity.

            2.19 "PLAN" means the 2002 Stock Option Plan of FanZ Enterprises,
         Inc.

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            2.20 "REGULATIONS T" means Part 220, chapter II, title 12 of the
         Code of Federal Regulations, issued by the Board of Governors of the
         Federal Reserve System pursuant to the Exchange Act as amended from
         time to time, or any successor regulation which may hereafter be
         adopted in lieu thereof.

            2.21 "RULE 16b-3" means Rule 16b-3 of the General Rules and
         Regulations of the Exchange Act, as in effect at the time of reference,
         or any successor rules or regulations which may hereafter be adopted in
         lieu thereof, and any reference to any specific provisions of Rule
         16b-3 shall refer to the corresponding provisions of Rule 16b-3 as it
         may hereafter be amended or replaced.

            2.22 "SHARES" means shares of the common stock, $.01 par value, of
         the Company or, if by reason of the adjustment provisions contained
         herein, any rights under an Option under the Plan pertain to any other
         security, such other security.

            2.23 "SUBSIDIARY" OR "SUBSIDIARIES" means any corporation or
         corporations other than the employer corporation in an unbroken chain
         of corporations beginning with the employer corporation if each of the
         corporations other than the last corporation in the unbroken chain owns
         stock possessing fifty percent (50%) or more of the total combined
         voting power of all classes of stock in one of the other corporations
         in such chain.

            2.24 "SUCCESSOR" means (i) the legal representative of the estate of
         a deceased Participant, (ii) the person or persons who shall acquire
         the right to exercise or receive an Option by bequest or inheritance or
         by reason of the death of the Participant or (iii) the beneficiary or
         beneficiaries designated by the Participant for any Option granted to
         the Participant that is outstanding at the time of his death.

            2.25 "TERM" means the period during which a particular Option may be
         exercised.

         3. SHARES SUBJECT TO THE PLAN. There will be reserved for use, upon the
exercise of Options to be granted from time to time under the Plan, an aggregate
number of Shares equal to 9% of the number of Shares outstanding after giving
effect to closing of the Company's initial public offering with gross proceeds
of at least $10,000,000, which Shares may be, in whole or in part, as the Board
shall from time to time determine, authorized but unissued Shares, or issued
Shares which shall have been reacquired by the Company. Any Shares subject to
issuance upon exercise of Options but which are not issued because of a
surrender, lapse, expiration, forfeiture or termination of any such Option prior
to issuance of the Shares shall once again be available for issuance in
satisfaction of Options.

         4. ADMINISTRATION OF THE PLAN. The Board shall be invested with the
responsibility for the administration of the Plan; provided, however, that the
Board may appoint a Committee; provided, further, however, that at such time, if
ever, that the Company becomes subject to the Exchange Act, the Board shall
appoint a Committee, which shall consist of not less than two (2) outside
directors as defined in Treasury Regulation Section 1.162-27 who shall also
qualify as disinterested directors within the meaning of Rule 16b-3, which shall
be invested with the

                                       4
<PAGE>

responsibility for the administration of the Plan; provided further, however,
that the failure to appoint a Committee satisfying the foregoing requirement
shall not affect the validity of any Options granted under the Plan. Subject to
the provisions of the Plan, the Committee shall have full authority, in its
discretion, to determine the Participants to whom Options shall be granted, the
number of Shares to be covered by each of the Options, and the terms of any such
Option; to amend or cancel Options (subject to Section 17 of the Plan); to
accelerate the vesting of Options; to require the cancellation or surrender of
any previously granted awards under this Plan or any other plans of the Company
as a condition to the granting of an Option; to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; and
generally to interpret and determine any and all matters whatsoever relating to
the administration of the Plan and the granting of Options hereunder. The Board
may from time to time appoint members to the Committee in substitution for or in
addition to members previously appointed and may fill vacancies, however caused,
in the Committee. The Committee shall select one of its members as its chairman
and shall hold its meetings at such times and places as it shall deem advisable.
A majority of its members shall constitute a quorum. Any action of the Committee
may be taken by a written instrument signed by all of the members, and any
action so taken shall be fully as effective as if it had been taken by a vote of
a majority of the members at a meeting duly called and held. The Committee shall
make such rules and regulations for the conduct of its business as it shall deem
advisable and shall appoint a Secretary who shall keep minutes of its meetings
and records of all action taken in writing without a meeting. No member of the
Committee shall be liable, in the absence of bad faith, for any act or omission
with respect to his or her service on the Committee.

         5. PARTICIPANTS TO WHOM OPTIONS MAY BE GRANTED. Options may be granted
in each calendar year or portion thereof while the Plan is in effect to such of
the Participants as the Committee, in its discretion, shall determine. In
determining the Participants to whom Options shall be granted and the number of
Shares to be issued or subject to purchase or issuance under such Options, the
Committee shall take into account the recommendations of the Company's
management as to the duties of the respective Participants, their present and
potential contributions to the success of the Company and its Subsidiaries, and
such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan; provided however, that no Incentive
Stock Option may be granted to a Participant who is not an Employee; and
provided further, however, that no Option may be granted to a member of the
Board who is not also an Employee. No Participant may receive Options to acquire
more than 50,000 Shares in any one calendar year.

         6. OPTION TERMS AND CONDITIONS.

            6.1 TYPES OF OPTIONS. Options granted under the Plan may be (i)
         Incentive Stock Options, (ii) Non-Qualified Stock Options, or (iii) a
         combination of the foregoing. The Option Agreement shall designate
         whether an Option is an Incentive Stock Option or a Non-Qualified Stock
         Option and separate Option Agreements shall be issued for each type of
         Option when a combination of an Incentive Stock Option and a
         Non-Qualified Stock Option are granted on the same date to the same
         Participant. Any Option which is designated as a Non-Qualified Stock
         Option shall not be treated by the Company or the Participant to whom
         the Option is granted as an Incentive Stock Option for federal income
         tax purposes.

                                       5
<PAGE>

            6.2 OPTION PRICE. Unless otherwise determined by the Committee, in
         its sole discretion, the option price per share of any Non-Qualified
         Stock Option granted under the Plan shall not be less than the Fair
         Market Value of the Shares covered by the Option on the date the Option
         is granted; provided that in no event will the option price per share
         be less than eighty-five percent (85%) of the Fair Market Value of the
         Shares covered by the Option on the date the Option is granted. The
         option price per share of any Incentive Stock Option granted under the
         Plan shall not be less than the Fair Market Value of the Shares covered
         by the Option on the date the Option is granted.

            Notwithstanding anything herein to the contrary, in the event an
         Incentive Stock Option is granted to an Employee who, at the time such
         Incentive Stock Option is granted, owns, as defined in Section 424 of
         the Code, stock possessing more than ten percent (10%) of the total
         combined voting power of all classes of stock of:

                  (i)   the Company; or

                  (ii)  if applicable, a Subsidiary; or

                  (iii) if applicable, a Parent,

         then the option price per share of any Incentive Stock Option granted
         to such Employee shall not be less than one hundred ten percent (110%)
         of the Fair Market Value of the Shares covered by the Option on the
         date the Option is granted.

            6.3 TERMS OF OPTIONS. Options granted hereunder shall be exercisable
         for a Term of not more than five (5) years from the date of grant
         thereof, but shall be subject to earlier termination as hereinafter
         provided. Each Option Agreement issued hereunder shall specify the term
         of the Option, which term shall be determined by the Committee in
         accordance with its discretionary authority hereunder.

            Notwithstanding anything herein to the contrary, in the event an
         Incentive Stock Option is granted to an Employee who, at the time such
         Incentive Stock Option is granted, owns, as defined in Section 424 of
         the Code, stock possessing more than ten percent (10%) of the total
         combined voting power of all classes of stock of:

                  (i)   the Company; or

                  (ii)  if applicable, a Subsidiary; or

                  (iii) if applicable, a Parent,

         then such Incentive Stock Option shall not be exercisable more than
         five (5) years from the date of grant thereof, but shall be subject to
         earlier termination as hereinafter provided.

                                       6
<PAGE>

            6.4 OTHER TERMS AND CONDITIONS OF OPTIONS. Each Option or each
         Option Agreement setting forth an Option shall contain such other terms
         and conditions (e.g., vesting conditions) not inconsistent herewith as
         shall be approved by the Committee.

         7. LIMIT ON FAIR MARKET VALUE OF INCENTIVE STOCK OPTIONS. No Employee
may be granted an Incentive Stock Option hereunder to the extent that the
aggregate fair market value (such fair market value being determined as of the
date of grant of the option in question) of the stock with respect to which
incentive stock options are first exercisable by any Employee during any
calendar year (under all such plans of the Employee's employer corporation, its
Parent, if any, and its Subsidiaries, if any) exceeds One Hundred Thousand
Dollars ($100,000). For purposes of the preceding sentence, options shall be
taken into account in the order in which they were granted. Any Option granted
under the Plan which is intended to be an Incentive Stock Option, but which
exceeds the limitation set forth in this Section 7, shall be a Non-Qualified
Stock Option.

         8. DATE OF GRANT. The date of grant of an Option granted hereunder
shall be the date on which the Committee acts in granting the Option or, if
later, such other date as the Committee shall specify.

         9. EXERCISE OF RIGHTS UNDER OPTIONS.

            9.1 NOTICE OF EXERCISE. A Participant entitled to exercise an Option
         shall do so by delivery of a written notice to that effect specifying
         the number of Shares with respect to which the Option is being
         exercised and any other relevant information the Committee may require.
         The notice shall be accompanied by payment in full of the purchase
         price of any Shares to be purchased, which payment may be made in cash
         or, with the Committee's approval, in Shares that have been held for at
         least six (6) months valued at their Fair Market Value on the date of
         exercise or, upon the approval of the Committee, by a combination of
         cash and Shares. No Shares shall be issued upon exercise of an Option
         until full payment has been made therefor. All notices or requests
         provided for herein shall be delivered to the Company's President, or
         such other person as the Committee may designate. No fractional Shares
         shall be issued.

            9.2 CASHLESS EXERCISE PROCEDURES. At such time that Shares are
         traded on the over-the-counter market or on any other established
         securities market, the Company, in its sole discretion, may establish
         procedures whereby a Participant, subject to the requirements of Rule
         16b-3, Regulation T, federal income tax laws, and other federal, state
         and local tax and securities laws, can exercise an Option or a portion
         thereof without making a direct payment of the option price to the
         Company; provided, however, that these cashless exercise procedures
         shall not apply to Incentive Stock Options which are outstanding on the
         date the Company establishes such procedures unless the application of
         such procedures to such Options is permitted pursuant to the Code and
         the regulations thereunder without affecting the Options' qualification
         under Code Section 422 as Incentive Stock Options. If the Company so
         elects to establish a cashless exercise program, the Company shall
         determine, in its sole discretion, and from time to time, such
         administrative procedures and policies as

                                       7
<PAGE>

         it deems appropriate and such procedures and policies shall be binding
         on any Participant wishing to utilize the cashless exercise program.

         10. RIGHTS OF OPTION HOLDER. Subject to the provisions in Sections 15
and 18 of this Plan, the holder of an Option shall not have any of the rights of
a stockholder with respect to the Shares subject to purchase or receipt under
the Option, except to the extent that the holder has exercised the Option for
those Shares in accordance with the terms of the Option Agreement applicable to
such Option and paid the full exercise price for the purchased Shares to the
Company.

         11. NONTRANSFERABILITY OF OPTIONS. Unless otherwise determined by the
Committee, and set forth in an Option Agreement, an Option shall not be
transferable other than: (a) by will or the laws of descent and distribution or
pursuant to any beneficiary designation in effect for said Option at the time of
the holder's death, and an Option subject to exercise may be exercised, during
the lifetime of the holder of the Option, only by the holder or in the event of
death, the holder's Successor, or in the event of disability, the holder's
personal representative, or (b) pursuant to a qualified domestic relations
order, as defined in the Code or ERISA or the rules thereunder.

         12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in all of the outstanding Shares by reason of stock dividends, stock splits,
reclassifications, recapitalizations, mergers, consolidations, combinations,
exchanges of Shares, separations, reorganizations or liquidations, or similar
events, or in the event of extraordinary cash or non-cash dividends being
declared with respect to the Shares, or similar transactions or events, the
number and class of Shares available under the Plan in the aggregate, the number
and class of Shares subject to Options theretofore granted, applicable purchase
prices and all other applicable provisions, shall, subject to the provisions of
the Plan, be equitably adjusted by the Committee (which adjustment may, but need
not, include payment to the holder of an Option, in cash or in securities, in an
amount equal to the difference between the price at which such Option may be
exercised and the then current fair market value of the Shares subject to such
Option) as equitably determined by the Committee in order to prevent the
diminution or enlargement of benefits thereunder. The foregoing adjustment and
the manner of application of the foregoing provisions shall be determined by the
Committee, in its sole discretion; provided, however, to the extent applicable,
any adjustment to an Incentive Stock Option shall be made in a manner consistent
with Section 424 of the Code. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an
Option.

                                       8
<PAGE>

         13. CHANGE IN CONTROL. Notwithstanding anything to the contrary in the
Plan or any Option Agreement, in the case of a Change in Control of the Company:

             (a) If the Change in Control of the Company is described in Section
         2.2(a) or 2.2(b) of the Plan, the Committee may, in its discretion,
         taking into account the purposes of this Plan, determine, on a case by
         case basis, that each Option granted under the Plan shall, subject to
         the following provisions, terminate ninety (90) days after the Board
         becomes aware of the occurrence of such Change in Control but, in the
         event of any such termination, an Option holder shall have the right,
         commencing at least five (5) days prior to such Change in Control and
         subject to any other limitation on the exercise of such Option in
         effect on the date of exercise to immediately exercise any Options in
         full, without regard to any vesting limitations, to the extent they
         shall not have been theretofore exercised.

             (b) If the Change in Control of the Company is described in Section
         2.2(c) of the Plan, then (i) the Committee shall use its best efforts
         to cause the acquiring or successor entity to either assume all
         outstanding Options granted under the Plan or to replace all
         outstanding Options granted under the Plan with comparable options
         which preserve the spread, exercise period and vesting periods of such
         Options; (ii) all outstanding Options granted under the Plan that are
         not so assumed or replaced with comparable options shall become
         exercisable in full immediately prior to, and conditioned upon, the
         closing of the transaction (a "Corporate Transaction") the approval of
         which resulted in a Change in Control described in Section 2.2(c) of
         the Plan and written notice of such acceleration shall be given to the
         holders of all non-assumed or non-replaced Options at least ten (10)
         days prior to the date of the closing of the Corporate Transaction; and
         (iii) all outstanding Options granted under the Plan shall
         automatically terminate upon the closing of the Corporate Transaction.

         14. FORMS OF OPTIONS. Nothing contained in the Plan nor any resolution
adopted or to be adopted by the Board or by the stockholders of the Company
shall constitute the granting of any Option. An Option shall be granted
hereunder only by action taken by the Committee in granting an Option. Whenever
the Committee shall designate a Participant for the receipt of an Option, the
Company's Secretary, or such other person as the Committee may designate, shall
forthwith send notice thereof to the Participant, in such form as the Committee
shall approve, stating the number of Shares subject to the Option, its Term, and
the other terms and conditions thereof. The notice shall be accompanied by a
written Option Agreement in such form as may from time to time hereafter be
approved by the Committee, which shall have been duly executed by or on behalf
of the Company. If the surrender of previously issued Options is made a
condition of the grant, the notice shall set forth the pertinent details of such
condition. Execution by the Participant to whom such Option is granted of said
Option Agreement in accordance with the provisions set forth in this Plan shall
be a condition precedent to the exercise or receipt of any Option.

         15. TAXES. The Company shall have the right to require a person
entitled to receive Shares pursuant to the receipt, vesting or exercise of an
Option under the Plan to pay the Company the amount of any taxes which the
Company is or will be required to withhold with respect to such Shares before
the Shares are issued in such person's name. Furthermore, the Company may elect
to

                                       9
<PAGE>

deduct such taxes from any other amounts then payable in cash or in Shares or
from any other amounts payable any time thereafter to the Participant. If the
Participant disposes of the Shares acquired pursuant to an Incentive Stock
Option in any transaction considered to be a disqualifying transaction under
Sections 421 and 422 of the Code, the Participant shall notify the Company of
such transfer and the Company shall have the right to deduct any taxes required
by law to be withheld from any amounts otherwise payable then or thereafter to
the Participant.

         16. TERMINATION OF THE PLAN. The Plan shall terminate ten (10) years
from the date hereof, and an Option shall not be granted under the Plan after
that date although the terms of any Options may be amended at any date prior to
the end of its Term in accordance with the Plan. Any Options outstanding at the
time of termination of the Plan shall continue in full force and effect
according to the terms and conditions of the Option and this Plan.

         17. AMENDMENT OF THE PLAN. The Plan may be amended at any time and from
time to time by the Board, but no amendment without the approval of the
stockholders of the Company shall be made if stockholder approval under Section
422 of the Code, Section 162(m) of the Code or Rule 16b-3 would be required.
Notwithstanding the discretionary authority granted to the Committee in Section
4 of the Plan, no amendment of the Plan or any Option granted under the Plan
shall impair any of the rights of any holder, without the holder's consent,
under any Option theretofore granted under the Plan.

         18. DELIVERY OF SHARES ON EXERCISE OR GRANT. Delivery of certificates
for Shares pursuant to the exercise of an Option may be postponed by the Company
for such period as may be required for it with reasonable diligence to comply
with any applicable requirements of any federal, state or local law or
regulation or any administrative or quasi-administrative requirement applicable
to the sale, issuance, distribution or delivery of such Shares. The Committee
may, in its sole discretion, require a Participant to furnish the Company with
appropriate representations and a written investment letter prior to the
exercise of an Option or the delivery of any Shares pursuant to an Option.

         19. FEES AND COSTS. The Company shall pay all original issue taxes on
the issuance or exercise of any Option granted under the Plan and all other fees
and expenses necessarily incurred by the Company in connection therewith.

         20. EFFECTIVENESS OF THE PLAN. The Plan shall become effective when
approved by the Board. The Plan shall thereafter be submitted to the Company's
stockholders for approval and unless the Plan is approved either (i) by the
affirmative votes of the holders of shares having a majority of the voting power
of all shares represented at a meeting duly held in accordance with Delaware law
within twelve (12) months after being approved by the Board or (ii) by a written
consent in accordance with Delaware law within twelve (12) months after being
approved by the Board, the Plan and all Options granted thereunder will be null
and void and of no force and effect.

         21. OTHER PROVISIONS. As used in the Plan, and in Options and other
documents prepared in implementation of the Plan, references to the masculine
pronoun shall be deemed to refer to the feminine or neuter, and references in
the singular or the plural shall refer to the plural or the singular,

                                       10
<PAGE>

as the identity of the person or persons or entity or entities being referred to
may require. The captions used in the Plan and in such Options and other
documents prepared in implementation of the Plan are for convenience only and
shall not affect the meaning of any provision hereof or thereof.

         22. DELAWARE LAW TO GOVERN. This Plan shall be governed by and
construed in accordance with the laws of the State of Delaware.

                                       11

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