Document:

2nd Amend to Note

    Exhibit
      10.34   

    ACTIS
      Global Ventures, Inc..

    1905
      Aston Drive, Suite 101

    Carlsbad,
      CA 92008

    

    April
      2,
      2007

    Sujon
      Limited

    14
      Hackwood,

    Robertsbridge,
      East Sussex,

    TN
      32
      5ER

    United
      Kingdom

    

    Re: ACTIS
      Global Ventures, Inc.(the
      “Company”) -Second Amendment of Note

    

    Ladies
      and Gentlemen:

    

    This
      letter sets forth the agreement of the parties hereto to amend the due date
      of
      the promissory note dated October 19, 2006. By execution hereof, for good and
      valuable consideration the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree that:

    

    
      	 	
              1.

            	
              Upon
                the signing of this amendment by Sujon Limited, ACTIS Global Ventures,
                Inc. (ACTIS) will make a $25,000 payment to be applied against the
                existing principal leaving a balance due of $175,000 plus interest
                from
                the date of the note, and will issue an additional 1,000,000 restricted
                shares of common stock.

            

    

     

    
      	 	
              2.

            	
              The
                due date of the promissory note is hereby amended, effective April
                2,
                2007, to be June 4, 2007.

            

    

     

    
      	 	
              3.

            	
              All
                other provisions of the promissory note shall remain in full force
                and
                effect.

            

    

     

    The
      parties shall do and perform, or cause to be done and performed, all such
      further acts and things, and shall execute and deliver all such other
      agreements, certificates, instruments and documents, as the other parties hereto
      may reasonably request in order to carry out the intent and accomplish the
      purposes of this letter agreement, including without limitation the issuance
      of
      an amended promissory note.

    

    Please
      signify your agreement with the foregoing by signing a copy of this letter
      where
      indicated and returning it to the undersigned.

    

    Sincerely,

    ACTIS
      Global Ventures, Inc.

    

    /s/
      RAY W. GRIMM, JR.

    By:
      Ray
      W. Grimm, Jr.

    Title:
      Chief Executive Officer

    ACCEPTED
      AND AGREED:

    Sujon
      Limited

    /s/ 
      C. SMITH            

    By:
      C.
      Smith, Authorized Signatory<Page>

Exhibit 4.2

                               AMENDED AND RESTATED

                                MICROISLET, INC.

                           2005 EQUITY INCENTIVE PLAN

1. PURPOSE OF THE PLAN. The purpose of this Plan is to encourage ownership in
the Company by key personnel whose long-term service is considered essential to
the Company's continued progress and, thereby, encourage recipients to act in
the stockholders' interest and share in the Company's success.

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

                  "Act" shall mean the Securities Act of 1933, as amended.

                  "Administrator" shall mean the Board, any Committees or such
delegates as shall be administering the Plan in accordance with Section 4 of the
Plan.

                  "Affiliate" shall mean any entity that is directly or
indirectly controlled by the Company or any entity in which the Company has a
significant ownership interest as determined by the Administrator.

                  "Applicable Laws" shall mean the requirements relating to the
administration of stock plans under federal and state laws, any stock exchange
or quotation system on which the Company has listed or submitted for quotation
the Common Stock to the extent provided under the terms of the Company's
agreement with such exchange or quotation system and, with respect to Awards
subject to the laws of any foreign jurisdiction where Awards are, or will be,
granted under the Plan, to the laws of such jurisdiction.

                  "Award" shall mean, individually or collectively, a grant
under the Plan of Options, Stock Awards, SARs, or Cash Awards.

                  "Awardee" shall mean a Service Provider who has been granted
an Award under the Plan.

                  "Award Agreement" shall mean an Option Agreement, Stock Award
Agreement, SAR Award Agreement, and/or Cash Award Agreement, which may be in
written or electronic format, in such form and with such terms as may be
specified by the Administrator, evidencing the terms and conditions of an
individual Award. Each Award Agreement is subject to the terms and conditions of
the Plan.

                  "Award Transfer Program" shall mean any program instituted by
the Administrator which would permit Participants the opportunity to transfer
any outstanding Awards to a financial institution or other person or entity
selected by the Administrator.

                  "Board" shall mean the Board of Directors of the Company.

                  "Cash Award" shall mean a bonus opportunity awarded under
Section 13 pursuant to which a Participant may become entitled to receive an
amount based on the satisfaction of such performance criteria as are specified
in the agreement or other documents evidencing the Award (the "Cash Award
Agreement").

                  "Change in Control" shall mean any of the following, unless
the Administrator provides otherwise:

                  (i) any merger or consolidation in which the Company shall not
         be the surviving entity (or survives only as a subsidiary of another
         entity whose stockholders did not own all or substantially all of the
         Common Stock in substantially the same proportions as immediately prior
         to such transaction);

                  (ii) the sale of all or substantially all of the Company's
         assets to any other person or entity (other than a wholly-owned
         subsidiary);

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<Page>

                  (iii) the acquisition of beneficial ownership of a controlling
         interest (including, without limitation, power to vote) in the
         outstanding shares of Common Stock by any person or entity (including a
         "group" as defined by or under Section 13(d)(3) of the Exchange Act);

                  (iv) the dissolution or liquidation of the Company;

                  (v) a contested election of Directors, as a result of which or
         in connection with which the persons who were Directors before such
         election or their nominees cease to constitute a majority of the Board;
         or

                  (vi) any other event specified by the Board or a Committee,
         regardless of whether at the time an Award is granted or thereafter.

Notwithstanding the foregoing, the term "Change in Control" shall not include
any under written public offering of Shares registered under the Act.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  "Committee" shall mean a committee of Directors appointed by
the Board in accordance with Section 4 of the Plan.

                  "Common Stock" shall mean the common stock of the Company.

                  "Company" shall mean MicroIslet, Inc., a Nevada corporation,
or its successor.

                  "Consultant" shall mean any person engaged by the Company or
any Affiliate to render services to such entity as an advisor or consultant.

                  "Conversion Award" has the meaning set forth in Section
4(b)(xii) of the Plan.

                  "Director" shall mean a member of the Board.

                  "Dividend Equivalent" shall mean a credit, made at the
discretion of the Administrator, to the account of a Participant in an amount
equal to the cash dividends paid on one Share for each Share represented by an
Award held by such Participant.

                  "Employee" shall mean an employee of the Company or any
Affiliate, including an Officer and/or Director. Within the limitations of
Applicable Law, the Administrator shall have the discretion to determine the
effect upon an Award and upon an individual's status as an Employee in the case
of (i) any individual who is classified by the Company or its Affiliate as
leased from or otherwise employed by a third party or as intermittent or
temporary, even if any such classification is changed retroactively as a result
of an audit, litigation or otherwise, (ii) any leave of absence approved by the
Company or an Affiliate, (iii) any transfer between locations of employment with
the Company or an Affiliate or between the Company and any Affiliate or between
any Affiliates, (iv) any change in the Awardee's status from an employee to a
Consultant or Director, and (v) at the request of the Company or an Affiliate an
employee becomes employed by any partnership, joint venture or corporation not
meeting the requirements of an Affiliate in which the Company or an Affiliate is
a party.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

                  "Exchange Program" shall mean a program under which (i)
outstanding Awards are surrendered or cancelled in exchange for Awards of the
same type (which may have lower exercise prices and different terms), Awards of
a different type, and/or cash, and/or (ii) the exercise price of an outstanding
Award is reduced. The terms and conditions of any Exchange Program will be
determined by the Administrator in its sole discretion.

                                       2

<Page>

                  "Fair Market Value" shall mean, unless the Administrator
determines otherwise, as of any date, the closing price for such Common Stock as
of such date (or if no sales were reported on such date, the closing price on
the last preceding day for which a sale was reported), as reported in such
source as the Administrator shall determine.

                  "Grant Date" shall mean the date upon which an Award is
granted to an Awardee pursuant to this Plan.

                  "Incentive Stock Option" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

                  "Nonstatutory Stock Option" shall mean an Option not intended
to qualify as an Incentive Stock Option.

                  "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

                  "Option" shall mean a right granted under Section 8 of the
Plan to purchase a certain number of Shares at such exercise price, at such
times, and on such other terms and conditions as are specified in the agreement
or other documents evidencing the Award (the "Option Agreement"). Both Options
intended to qualify as Incentive Stock Options and Nonstatutory Stock Options
may be granted under the Plan.

                  "Participant" shall mean the Awardee or any person (including
any estate) to whom an Award has been assigned or transferred as permitted
hereunder.

                  "Plan" shall mean this MicroIslet, Inc. 2005 Equity Incentive
Plan, as amended.

                  "Prior Plan" shall mean the Company's 2000 Stock Option Plan
authorizing up to 6,000,000 Shares for issuance pursuant to stock options.

                  "Qualifying Performance Criteria" shall have the meaning set
forth in Section 14(b) of the Plan.

                  "Related Corporation" shall mean any parent or subsidiary (as
defined in Sections 424(e) and (f) of the Code) of the Company.

                  "Service Provider" shall mean an Employee, Director, or
Consultant.

                  "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 15 of the Plan.

                  "Stock Award" shall mean an award or issuance of Shares or
Stock Units made under Section 11 of the Plan, the grant, issuance, retention,
vesting and/or transferability of which is subject during specified periods of
time to such conditions (including continued service or performance conditions)
and terms as are expressed in the agreement or other documents evidencing the
Award (the "Stock Award Agreement").

                  "Stock Appreciation Right" or "SAR" shall mean an Award,
granted alone or in connection with an Option, that pursuant to Section 12 of
the Plan is designated as a SAR. The terms of the SAR are expressed in the
agreement or other documents evidencing the Award (the "SAR Agreement").

                  "Stock Unit" shall mean a bookkeeping entry representing an
amount equivalent to the fair market value of one Share, payable in cash,
property or Shares. Stock Units represent an unfunded and unsecured obligation
of the Company, except as otherwise provided for by the Administrator.

                                        3

<Page>

                  "10% Stockholder" shall mean the owner of stock (as determined
under Section 424(d) of the Code) possessing more than 10% of the total combined
voting power of all classes of stock of the Company (or any Related
Corporation).

                  "Termination of Service" shall mean ceasing to be a Service
Provider. However, for Incentive Stock Option purposes, Termination of Service
will occur when the Awardee ceases to be an employee (as determined in
accordance with Section 3401(c) of the Code and the regulations promulgated
thereunder) of the Company or one of its Related Corporations. The Administrator
shall determine whether any corporate transaction, such as a sale or spin-off of
a division or business unit, or a joint venture, shall be deemed to result in a
Termination of Service.

                  "Total and Permanent Disability" shall have the meaning set
forth in Section 22(e)(3) of the Code.

3. STOCK SUBJECT TO THE PLAN.

         (a)      Aggregate Limits.
                  -----------------

                  (i) The number of Shares initially reserved for issuance under
         the Plan through Awards is a maximum of 7,471,339 Shares. Such reserve
         shall consist of (A) the number of Shares available for issuance, as of
         the effective date of the Plan, under the Prior Plan, plus (B) those
         Shares that are issuable upon exercise of options granted pursuant to
         the Prior Plan that expire or become unexercisable for any reason
         without having been exercised in full after the effective date of the
         Plan, plus (C) an additional increase of 2,000,000 Shares to be
         approved by the Company's stockholders on the effective date of the
         Plan. Such reserve shall be increased by an additional 1,000,000 shares
         upon approval of such increase by the Company's stockholders.
         Notwithstanding the foregoing, the maximum aggregate number of Shares
         that may be issued under the Plan through Incentive Stock Options is
         7,471,339. The limitations of this Section 3(a)(i) shall be subject to
         the adjustments provided for in Section 15 of the Plan.

                  (ii) Upon payment in Shares pursuant to the exercise of an
         Award, the number of Shares available for issuance under the Plan shall
         be reduced only by the number of Shares actually issued in such
         payment. If any outstanding Award expires or is terminated or canceled
         without having been exercised or settled in full, or if Shares acquired
         pursuant to an Award subject to forfeiture or repurchase are forfeited
         or repurchased by the Company, the Shares allocable to the terminated
         portion of such Award or such forfeited or repurchased Shares shall
         again be available to grant under the Plan. Notwithstanding the
         foregoing, the aggregate number of shares of Common Stock that may be
         issued under the Plan upon the exercise of Incentive Stock Options
         shall not be increased for restricted Shares that are forfeited or
         repurchased. Notwithstanding anything in the Plan, or any Award
         Agreement to the contrary, Shares attributable to Awards transferred
         under any Award Transfer Program shall not be again available for grant
         under the Plan. The Shares subject to the Plan may be either Shares
         reacquired by the Company, including Shares purchased in the open
         market, or authorized but unissued Shares.

         (b) Code Section 162(m) Limit. Subject to the provisions of Section 15
of the Plan, the aggregate number of Shares subject to Awards granted under this
Plan during any calendar year to any one Awardee shall not exceed 500,000,
except that in connection with his or her initial service, an Awardee may be
granted Awards covering up to an additional 2,000,000 Shares. Notwithstanding
anything to the contrary in the Plan, the limitations set forth in this Section
3(b) shall be subject to adjustment under Section 15 of the Plan only to the
extent that such adjustment will not affect the status of any Award intended to
qualify as "performance based compensation" under Code Section 162(m).

4. ADMINISTRATION OF THE PLAN.

         (a)      Procedure.
                  ----------

                  (i) MULTIPLE ADMINISTRATIVE BODIES. The Plan shall be
         administered by the Board, a Committee and/or their delegates.

                                        4

<Page>

                  (ii) SECTION 162. To the extent that the Administrator
         determines it to be desirable to qualify Awards granted hereunder as
         "performance-based compensation" within the meaning of Section 162(m)
         of the Code, Awards to "covered employees" within the meaning of
         Section 162(m) of the Code or Employees that the Committee determines
         may be "covered employees" in the future shall be made by a Committee
         of two or more "outside directors" within the meaning of Section 162(m)
         of the Code.

                  (iii) RULE 16b-3. To the extent desirable to qualify
         transactions hereunder as exempt under Rule 16b-3 promulgated under the
         Exchange Act ("Rule 16b-3"), Awards to Officers and Directors shall be
         made in such a manner to satisfy the requirement for exemption under
         Rule 16b-3.

                  (iv) OTHER ADMINISTRATION. The Board or a Committee may
         delegate to an authorized Officer or Officers of the Company the power
         to approve Awards to persons eligible to receive Awards under the Plan
         who are not (A) subject to Section 16 of the Exchange Act or (B) at the
         time of such approval, "covered employees" under Section 162(m) of the
         Code.

                  (v) DELEGATION OF AUTHORITY FOR THE DAY-TO-DAY ADMINISTRATION
         OF THE PLAN. Except to the extent prohibited by Applicable Law, the
         Administrator may delegate to one or more individuals the day-to-day
         administration of the Plan and any of the functions assigned to it in
         this Plan. Such delegation may be revoked at any time.

         (b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the Plan
and, in the case of a Committee or delegates acting as the Administrator,
subject to the specific duties delegated to such Committee or delegates, the
Administrator shall have the authority, in its discretion:

                  (i) to select the Service Providers of the Company or its
         Affiliates to whom Awards are to be granted hereunder;

                  (ii) to determine the number of shares of Common Stock to be
         covered by each Award granted hereunder;

                  (iii) to determine the type of Award to be granted to the
         selected Service Provider;

                  (iv) to approve the forms of Award Agreements for use under
         the Plan;

                  (v) to determine the terms and conditions, not inconsistent
         with the terms of the Plan, of any Award granted hereunder. Such terms
         and conditions include, but are not limited to, the exercise and/or
         purchase price, the time or times when an Award may be exercised (which
         may or may not be based on performance criteria), the vesting schedule,
         any vesting and/or exercisability, acceleration or waiver of forfeiture
         restrictions, the acceptable forms of consideration, the term, and any
         restriction or limitation regarding any Award or the Shares relating
         thereto, based in each case on such factors as the Administrator, in
         its sole discretion, shall determine and may be established at the time
         an Award is granted or thereafter;

                  (vi) to correct administrative errors;

                  (vii) to construe and interpret the terms of the Plan
         (including sub-plans and Plan addenda) and Awards granted pursuant to
         the Plan;

                  (viii) to adopt rules and procedures relating to the operation
         and administration of the Plan to accommodate the specific requirements
         of local laws and procedures. Without limiting the generality of the
         foregoing, the Administrator is specifically authorized (A) to adopt
         the rules and procedures regarding the conversion of local currency,
         withholding procedures and handling of stock certificates which vary
         with local requirements and (B) to adopt sub-plans and Plan addenda as
         the Administrator deems desirable, to accommodate foreign laws,
         regulations and practice;

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<Page>

                  (ix) to prescribe, amend and rescind rules and regulations
         relating to the Plan, including rules and regulations relating to
         sub-plans and Plan addenda;

                  (x) to modify or amend each Award, including, but not limited
         to, the acceleration of vesting and/or exercisability, provided,
         however, that any such amendment is subject to Section 16 of the Plan
         and may not materially impair any outstanding Award unless agreed to in
         writing by the Participant;

                  (xi) to allow Participants to satisfy withholding tax amounts
         by electing to have the Company withhold from the Shares to be issued
         pursuant to an Award that number of Shares having a Fair Market Value
         equal to the amount required to be withheld. The Fair Market Value of
         the Shares to be withheld shall be determined in such manner and on
         such date that the Administrator shall determine or, in the absence of
         provision otherwise, on the date that the amount of tax to be withheld
         is to be determined. All elections by a Participant to have Shares
         withheld for this purpose shall be made in such form and under such
         conditions as the Administrator may provide;

                  (xii) to authorize conversion or substitution under the Plan
         of any or all stock options, stock appreciation rights or other stock
         awards held by service providers of an entity acquired by the Company
         (the "Conversion Awards"). Any conversion or substitution shall be
         effective as of the close of the merger or acquisition. The Conversion
         Awards may be Nonstatutory Stock Options or Incentive Stock Options, as
         determined by the Administrator, with respect to options granted by the
         acquired entity. Unless otherwise determined by the Administrator at
         the time of conversion or substitution, all Conversion Awards shall
         have the same terms and conditions as Awards generally granted by the
         Company under the Plan;

                  (xiii) to authorize any person to execute on behalf of the
         Company any instrument required to effect the grant of an Award
         previously granted by the Administrator;

                  (xiv) to implement an Award Transfer Program;

                  (xv) to determine whether Awards will be settled in Shares,
         cash or in any combination thereof;

                  (xvi) to determine whether Awards will be adjusted for
         Dividend Equivalents;

                  (xvii) to establish a program whereby Service Providers
         designated by the Administrator can reduce compensation otherwise
         payable in cash in exchange for Awards under the Plan;

                  (xviii) to impose such restrictions, conditions or limitations
         as it determines appropriate as to the timing and manner of any resales
         by a Participant or other subsequent transfers by the Participant of
         any Shares issued as a result of or under an Award, including, without
         limitation, (A) restrictions under an insider trading policy and (B)
         restrictions as to the use of a specified brokerage firm for such
         resales or other transfers;

                  (xix) to provide, either at the time an Award is granted or by
         subsequent action, that an Award shall contain as a term thereof, a
         right, either in tandem with the other rights under the Award or as an
         alternative thereto, of the Participant to receive, without payment to
         the Company, a number of Shares, cash or a combination thereof, the
         amount of which is determined by reference to the value of the Award;

                  (xx) to institute an Exchange Program; and

                  (xxi) to make all other determinations deemed necessary or
         advisable for administering the Plan and any Award granted hereunder.

                                        6

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         (c) Effect of Administrator's Decision. All decisions, determinations
and interpretations by the Administrator regarding the Plan, any rules and
regulations under the Plan and the terms and conditions of any Award granted
hereunder, shall be final and binding on all Participants. The Administrator
shall consider such factors as it deems relevant, in its sole and absolute
discretion, to making such decisions, determinations and interpretations,
including, without limitation, the recommendations or advice of any officer or
other employee of the Company and such attorneys, consultants and accountants as
it may select.

5. ELIGIBILITY. Awards may be granted to Service Providers of the Company or any
of its Affiliates.

6. TERM OF PLAN. The Plan shall become effective on the effective date of its
approval by stockholders of the Company. It shall continue in effect for a term
of ten years from the date the Plan is approved by stockholders of the Company
unless terminated earlier under Section 16 of the Plan.

7. TERM OF AWARD. The term of each Award shall be determined by the
Administrator and stated in the Award Agreement. In the case of an Option, the
term shall be ten years from the Grant Date or such shorter term as may be
provided in the Award Agreement.

8. OPTIONS. The Administrator may grant an Option or provide for the grant of an
Option, either from time to time in the discretion of the Administrator or
automatically upon the occurrence of specified events, including, without
limitation, the achievement of performance goals, or for the satisfaction of an
event or condition within the control of the Awardee or within the control of
others.

         (a) OPTION AGREEMENT. Each Option Agreement shall contain provisions
regarding (i) the number of Shares that may be issued upon exercise of the
Option, (ii) the type of Option, (iii) the exercise price of the Shares and the
means of payment for the Shares, (iv) the term of the Option, (v) such terms and
conditions on the vesting and/or exercisability of an Option as may be
determined from time to time by the Administrator, (vi) restrictions on the
transfer of the Option and forfeiture provisions, and (vii) such further terms
and conditions, in each case not inconsistent with this Plan, as may be
determined from time to time by the Administrator.

         (b) EXERCISE PRICE. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                  (i) In the case of an Incentive Stock Option, the per Share
         exercise price shall be no less than 100% of the Fair Market Value per
         Share on the Grant Date. Notwithstanding the foregoing, if any Employee
         to whom an Incentive Stock Option is granted is a 10% Stockholder, then
         the exercise price shall not be less than 110% of the Fair Market Value
         of a share of Common Stock on the Grant Date.

                  (ii) In the case of a Nonstatutory Stock Option, the per Share
         exercise price shall be no less than 100% of the Fair Market Value per
         Share on the Grant Date. The per Share exercise price may also vary
         according to a predetermined formula; provided, that the exercise price
         never falls below 100% of the Fair Market Value per Share on the Grant
         Date. In the case of a Nonstatutory Stock Option intended to qualify as
         "performance-based compensation" within the meaning of Section 162(m)
         of the Code, the per Share exercise price shall be no less than 100% of
         the Fair Market Value per Share on the Grant Date.

                  (iii) Notwithstanding the foregoing, so long as the issuance
         and sale of securities under this Plan require qualification under the
         California Corporate Securities Law of 1968, the per Share exercise
         price of an Option shall be determined by the Administrator but shall
         not be less than 100% (or 110% in the case of a person who owns on the
         date of grant of such Option, securities of the Company possessing more
         than 10% of the total combined voting power of all classes of stock of
         the Company or any Related Corporation) of the Fair Market Value of a
         share of Common Stock on the Grant Date.

                                        7

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                  (iv) Notwithstanding the foregoing, at the Administrator's
         discretion, Conversion Awards may be granted in substitution and/or
         conversion of options of an acquired entity, with a per Share exercise
         price of less than 100% of the Fair Market Value per Share on the date
         of such substitution and/or conversion. The terms of the Conversion
         Awards shall be determined by the Administrator in accordance with the
         rules provided for in Code Section 424(a).

         (c) VESTING PERIOD AND EXERCISE DATES. Options granted under this Plan
shall vest and/or be exercisable at such time and in such installments during
the period prior to the expiration of the Option's term as determined by the
Administrator. The Administrator shall have the right to make the timing of the
ability to exercise any Option granted under this Plan subject to continued
service, the passage of time and/or such performance requirements as deemed
appropriate by the Administrator. At any time after the grant of an Option, the
Administrator may reduce or eliminate any restrictions surrounding any
Participant's right to exercise all or part of the Option. Notwithstanding the
foregoing, so long as the issuance and sale of securities under this Plan
require qualification under the California Corporate Securities Law of 1968, an
Option awarded to anyone other than an Officer, Director or Consultant of the
Company shall vest at a rate of at least 20% per year.

         (d) FORM OF CONSIDERATION. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment, either through the terms of the Option Agreement or at the time of
exercise of an Option. Acceptable forms of consideration may include:

                  (i) cash;

                  (ii) check or wire transfer;

                  (iii) subject to any conditions or limitations established by
         the Administrator, other Shares which (A) in the case of Shares
         acquired upon the exercise of an Option, have been owned by the
         Participant for more than six months (or such other period of time, as
         required by the applicable accounting requirements) on the date of
         surrender or attestation and (B) have a Fair Market Value on the date
         of surrender or attestation that does not exceed the aggregate exercise
         price of the Shares as to which said Option shall be exercised;

                  (iv) consideration received by the Company under a
         broker-assisted sale and remittance program acceptable to the
         Administrator to the extent that this procedure would not violate
         Section 402 of the Sarbanes-Oxley Act of 2002, as amended;

                  (v) such other consideration and method of payment for the
         issuance of Shares to the extent permitted by Applicable Laws; or

                  (vi) any combination of the foregoing methods of payment.

         (e) BUYOUT PROVISIONS. The Administrator may at any time offer to buy
out for a payment in Shares an Option previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the
Participant at the time that such offer is made.

9. INCENTIVE STOCK OPTION LIMITATIONS.

         (a) ELIGIBILITY. Only employees (as determined in accordance with
Section 3401(c) of the Code and the regulations promulgated thereunder) of the
Company or any of its Related Corporations may be granted Incentive Stock
Options.

                                        8

<Page>

         (b) $100,000 LIMITATION. Notwithstanding the designation "Incentive
Stock Option" in an Option Agreement, if the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Awardee during any calendar year (under all plans of the
Company and any of its Related Corporations) exceeds $100,000, then the portion
of such Options that exceeds $100,000 shall be treated as Nonstatutory Stock
Options. An Incentive Stock Option is considered to be first exercisable during
a calendar year if the Incentive Stock Option will become exercisable at any
time during the year, assuming that any condition on the Awardee's ability to
exercise the Incentive Stock Option related to the performance of services is
satisfied. If the Awardee's ability to exercise the Incentive Stock Option in
the year is subject to an acceleration provision, then the Incentive Stock
Option is considered first exercisable in the calendar year in which the
acceleration provision is triggered. For purposes of this Section 9(b),
Incentive Stock Options shall be taken into account in the order in which they
were granted. However, because an acceleration provision is not taken into
account prior to its triggering, an Incentive Stock Option that becomes
exercisable for the first time during a calendar year by operation of such
provision does not affect the application of the $100,000 limitation with
respect to any Incentive Stock Option (or portion thereof) exercised prior to
such acceleration. The Fair Market Value of the Shares shall be determined as of
the Grant Date.

         (c) LEAVE OF ABSENCE. For purposes of Incentive Stock Options, no leave
of absence may exceed three months, unless reemployment upon expiration of such
leave is provided by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company or a Related Corporation is not so
provided by statute or contract, an Awardee's employment with the Company shall
be deemed terminated on the first day immediately following such three month
period of leave for Incentive Stock Option purposes and any Incentive Stock
Option granted to the Awardee shall cease to be treated as an Incentive Stock
Option and shall terminate upon the expiration of the three month period
following the date the employment relationship is deemed terminated.

         (d) TRANSFERABILITY. The Option Agreement must provide that an
Incentive Stock Option cannot be transferable by the Awardee otherwise than by
will or the laws of descent and distribution, and, during the lifetime of such
Awardee, must not be exercisable by any other person. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may allow the Awardee to
transfer his or her Incentive Stock Option to a trust where under Section 671 of
the Code and other Applicable Law, the Awardee is considered the sole beneficial
owner of the Option while it is held in the trust. If the terms of an Incentive
Stock Option are amended to permit transferability, the Option will be treated
for tax purposes as a Nonstatutory Stock Option.

         (e) EXERCISE PRICE. The per Share exercise price of an Incentive Stock
Option shall be determined by the Administrator in accordance with Section
8(b)(i) of the Plan.

         (f) 10% STOCKHOLDER. If any Employee to whom an Incentive Stock Option
is granted is a 10% Stockholder, then the Option term shall not exceed five
years measured from the date of grant of such Option.

         (g) OTHER TERMS. Option Agreements evidencing Incentive Stock Options
shall contain such other terms and conditions as may be necessary to qualify, to
the extent determined desirable by the Administrator, under the applicable
provisions of Section 422 of the Code.

10. EXERCISE OF OPTION.

         (a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.

                  (i) Any Option granted hereunder shall be exercisable
         according to the terms of the Plan and at such times and under such
         conditions as determined by the Administrator and set forth in the
         respective Award Agreement.

                  (ii) An Option shall be deemed exercised when the Company
         receives (A) written or electronic notice of exercise (in accordance
         with the Award Agreement) from the person entitled to exercise the
         Option; (B) full payment for the Shares with respect to which the
         related Option is exercised; and (C) with respect to Nonstatutory Stock
         Options, payment of all applicable withholding taxes.

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                  (iii) Shares issued upon exercise of an Option shall be issued
         in the name of the Participant or, if requested by the Participant, in
         the name of the Participant and his or her spouse. Unless provided
         otherwise by the Administrator or pursuant to this Plan, until the
         Shares are issued (as evidenced by the appropriate entry on the books
         of the Company or of a duly authorized transfer agent of the Company),
         no right to vote or receive dividends or any other rights as a
         stockholder shall exist with respect to the Shares subject to an
         Option, notwithstanding the exercise of the Option.

                  (iv) The Company shall issue (or cause to be issued) such
         Shares as soon as administratively practicable after the Option is
         exercised. An Option may not be exercised for a fraction of a Share.

         (b) EFFECT OF TERMINATION OF SERVICE ON OPTIONS.

                  (i) GENERALLY. Unless otherwise provided for by the
         Administrator, if a Participant ceases to be a Service Provider, other
         than upon the Participant's death or Total and Permanent Disability,
         the Participant may exercise his or her Option within such period of
         time as is specified in the Award Agreement to the extent that the
         Option is vested on the date of termination (but in no event later than
         the expiration of the term of such Option as set forth in the Award
         Agreement). Notwithstanding the foregoing, so long as the issuance and
         sale of securities under this Plan require qualification under the
         California Corporate Securities Law of 1968, upon Participant's
         Termination of Service, other than due to death, Total and Permanent
         Disability, or cause, the Participant may exercise his or her Option
         (i) at any time on or prior to the date determined by the
         Administrator, which date shall be at least 30 days subsequent to the
         Participant's termination date (but in no event later than the
         expiration of the term of such Option), and (ii) only to the extent
         that the Participant was entitled to exercise such Option on the
         termination date. In the absence of a specified time in the Award
         Agreement, the vested portion of the Option will remain exercisable for
         three months following the Participant's termination. Unless otherwise
         provided by the Administrator, if on the date of termination the
         Participant is not vested as to his or her entire Option, the Shares
         covered by the unvested portion of the Option will revert to the Plan.
         If after termination the Participant does not exercise his or her
         Option within the time specified by the Administrator, the Option will
         terminate, and the Shares covered by such Option will revert to the
         Plan.

                  (ii) DISABILITY OF AWARDEE. Unless otherwise provided for by
         the Administrator, if a Participant ceases to be a Service Provider as
         a result of the Participant's Total and Permanent Disability, the
         Participant may exercise his or her Option within such period of time
         as is specified in the Award Agreement to the extent the Option is
         vested on the date of termination (but in no event later than the
         expiration of the term of such Option as set forth in the Award
         Agreement). Notwithstanding the foregoing, so long as the issuance and
         sale of securities under this Plan require qualification under the
         California Corporate Securities Law of 1968, in the event of
         Participant's Termination of Service due to his or her Total and
         Permanent Disability, the Participant may exercise his or her Option
         (i) at any time on or prior to the date determined by the
         Administrator, which date shall be at least six months subsequent to
         the termination date (but in no event later than the expiration date of
         the term of his or her Option), and (ii) only to the extent that the
         Participant was entitled to exercise such Option on the termination
         date. In the absence of a specified time in the Award Agreement, the
         Option will remain exercisable for twelve months following the
         Participant's termination. Unless otherwise provided by the
         Administrator, if at the time of disability the Participant is not
         vested as to his or her entire Option, the Shares covered by the
         unvested portion of the Option will immediately revert to the Plan on
         the date of the Participant's disability. If the Option is not so
         exercised within the time specified herein, the Option will terminate,
         and the Shares covered by such Option will revert to the Plan.

                  (iii) DEATH OF AWARDEE. Unless otherwise provided for by the
         Administrator, if a Participant dies while a Service Provider, the
         Option may be exercised following the Participant's death within such
         period of time as is specified in the Award Agreement to the extent
         that the Option is vested on the date of death (but in no event may the
         Option be exercised later than the expiration of the term of such
         Option as set forth in the Award Agreement), by the Participant's
         designated beneficiary, provided such beneficiary has been designated
         prior to Participant's death in a form acceptable to the Administrator.
         Notwithstanding the foregoing, so long as the issuance and sale of
         securities under this Plan require qualification under the California
         Corporate Securities Law of 1968, in the event that the Participant
         dies prior to a Termination of Service, the Participant's Option may be

                                       10

<Page>

         exercised by the Participant's designated beneficiary (i) at any time
         on or prior to the date determined by the Administrator, which date
         shall be at least six months subsequent to the date of death (but in no
         event later than the expiration date of the term of his or her Option),
         and (ii) only to the extent that the Participant was entitled to
         exercise the Option at the date of death. If no such beneficiary has
         been designated by the Participant, then such Option may be exercised
         by the personal representative of the Participant's estate or by the
         person(s) to whom the Option is transferred pursuant to the
         Participant's will or in accordance with the laws of descent and
         distribution. In the absence of a specified time in the Award
         Agreement, the Option will remain exercisable for twelve months
         following Participant's death. Unless otherwise provided by the
         Administrator, if at the time of death Participant is not vested as to
         his or her entire Option, the Shares covered by the unvested portion of
         the Option will immediately revert to the Plan on the date of the
         Participant's death. If the Option is not so exercised within the time
         specified herein, the Option will terminate, and the Shares covered by
         such Option will revert to the Plan.

11. STOCK AWARDS.

         (a) STOCK AWARD AGREEMENT. Each Stock Award Agreement shall contain
provisions regarding (i) the number of Shares subject to such Stock Award or a
formula for determining such number, (ii) the purchase price of the Shares, if
any, and the means of payment for the Shares, (iii) the performance criteria, if
any, and level of achievement versus these criteria that shall determine the
number of Shares granted, issued, retained and/or vested, (iv) such terms and
conditions on the grant, issuance, vesting and/or forfeiture of the Shares as
may be determined from time to time by the Administrator, (v) restrictions on
the transferability of the Stock Award and (vi) such further terms and
conditions in each case not inconsistent with this Plan as may be determined
from time to time by the Administrator.

         Notwithstanding the foregoing, so long as the issuance and sale of
securities under this Plan require qualification under the California Corporate
Securities Law of 1968, the purchase price for restricted Shares shall be
determined by the Administrator, but shall not be less than 85% (or 100% in the
case of a person who owns on the date of grant of such restricted stock,
securities of the Company possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Related Corporation) of the
Fair Market Value of a share of Common Stock on the date of grant of such
restricted stock.

         (b) RESTRICTIONS AND PERFORMANCE CRITERIA. The grant, issuance,
retention and/or vesting of each Stock Award may be subject to such performance
criteria and level of achievement versus these criteria as the Administrator
shall determine, which criteria may be based on financial performance, personal
performance evaluations and/or completion of service by the Awardee.
Notwithstanding the foregoing, so long as the issuance and sale of securities
under this Plan require qualification under the California Corporate Securities
Law of 1968, restricted stock awarded to anyone other than an Officer, Director
or Consultant of the Company shall vest at a rate of at least 20% per year.

         Notwithstanding anything to the contrary herein, the performance
criteria for any Stock Award that is intended to satisfy the requirements for
"performance-based compensation" under Section 162(m) of the Code shall be
established by the Administrator based on one or more Qualifying Performance
Criteria selected by the Administrator and specified in writing.

         (c) FORFEITURE. Unless otherwise provided for by the Administrator,
upon the Awardee's Termination of Service, the unvested Stock Award and the
Shares subject thereto shall be forfeited, provided that to the extent that the
Participant purchased any Shares pursuant to such Stock Award, the Company shall
have a right to repurchase the unvested portion of such Shares at the original
price paid by the Participant.

         (d) RIGHTS AS A STOCKHOLDER. Unless otherwise provided by the
Administrator, the Participant shall have the rights equivalent to those of a
stockholder and shall be a stockholder only after Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) to the Participant. Unless otherwise
provided by the Administrator, a Participant holding Stock Units shall be
entitled to receive dividend payments as if he or she was an actual stockholder.

                                       11

<Page>

12. STOCK APPRECIATION RIGHTS. Subject to the terms and conditions of the Plan,
a SAR may be granted to a Service Provider at any time and from time to time as
determined by the Administrator in its sole discretion.

         (a) NUMBER OF SARS. The Administrator shall have complete discretion to
determine the number of SARs granted to any Service Provider.

         (b) EXERCISE PRICE AND OTHER TERMS. The per SAR exercise price shall be
no less than 100% of the Fair Market Value per Share on the Grant Date. The
Administrator, subject to the provisions of the Plan, shall have complete
discretion to determine the other terms and conditions of SARs granted under the
Plan.

         (c) EXERCISE OF SARS. SARs shall be exercisable on such terms and
conditions as the Administrator, in its sole discretion, shall determine.

         (d) SAR AGREEMENT. Each SAR grant shall be evidenced by a SAR Agreement
that will specify the exercise price, the term of the SAR, the conditions of
exercise, and such other terms and conditions as the Administrator, in its sole
discretion, shall determine.

         (e) EXPIRATION OF SARS. A SAR granted under the Plan shall expire upon
the date determined by the Administrator, in its sole discretion, and set forth
in the SAR Agreement. Notwithstanding the foregoing, the rules of Section 10(b)
will also apply to SARs.

         (f) PAYMENT OF SAR AMOUNT. Upon exercise of a SAR, the Participant
shall be entitled to receive a payment from the Company in an amount equal to
the difference between the Fair Market Value of a Share on the date of exercise
over the exercise price of the SAR. This amount shall be paid in Shares of
equivalent value.

13. CASH AWARDS. Each Cash Award will confer upon the Participant the
opportunity to earn a future payment tied to the level of achievement with
respect to one or more performance criteria established for a performance
period.

         (a) CASH AWARD. Each Cash Award shall contain provisions regarding (i)
the performance goal(s) and maximum amount payable to the Participant as a Cash
Award, (ii) the performance criteria and level of achievement versus these
criteria which shall determine the amount of such payment, (iii) the period as
to which performance shall be measured for establishing the amount of any
payment, (iv) the timing of any payment earned by virtue of performance, (v)
restrictions on the alienation or transfer of the Cash Award prior to actual
payment, (vi) forfeiture provisions, and (vii) such further terms and
conditions, in each case not inconsistent with the Plan, as may be determined
from time to time by the Administrator. The maximum amount payable as a Cash
Award that is settled for cash may be a multiple of the target amount payable,
but the maximum amount payable pursuant to that portion of a Cash Award granted
under this Plan for any fiscal year to any Awardee that is intended to satisfy
the requirements for "performance based compensation" under Section 162(m) of
the Code shall not exceed $500,000.

         (b) PERFORMANCE CRITERIA. The Administrator shall establish the
performance criteria and level of achievement versus these criteria which shall
determine the target and the minimum and maximum amount payable under a Cash
Award, which criteria may be based on financial performance and/or personal
performance evaluations. The Administrator may specify the percentage of the
target Cash Award that is intended to satisfy the requirements for
"performance-based compensation" under Section 162(m) of the Code.
Notwithstanding anything to the contrary herein, the performance criteria for
any portion of a Cash Award that is intended to satisfy the requirements for
"performance-based compensation" under Section 162(m) of the Code shall be a
measure established by the Administrator based on one or more Qualifying
Performance Criteria selected by the Administrator and specified in writing.

         (c) TIMING AND FORM OF PAYMENT. The Administrator shall determine the
timing of payment of any Cash Award. The Administrator may specify the form of
payment of Cash Awards, which may be cash or other property, or may provide for
an Awardee to have the option for his or her Cash Award, or such portion thereof
as the Administrator may specify, to be paid in whole or in part in cash or
other property.

                                       12

<Page>

         (d) TERMINATION OF SERVICE. The Administrator shall have the discretion
to determine the effect of a Termination of Service on any Cash Award due to (i)
disability, (ii) retirement, (iii) death, (iv) participation in a voluntary
severance program, or (v) participation in a work force restructuring.

14. OTHER PROVISIONS APPLICABLE TO AWARDS.

         (a) NON-TRANSFERABILITY OF AWARDS. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by beneficiary designation,
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. The Administrator may make
an Award transferable to an Awardee's family member or any other person or
entity. If the Administrator makes an Award transferable, either at the time of
grant or thereafter, such Award shall contain such additional terms and
conditions as the Administrator deems appropriate, and any transferee shall be
deemed to be bound by such terms upon acceptance of such transfer.

         (b) QUALIFYING PERFORMANCE CRITERIA. For purposes of this Plan, the
term "Qualifying Performance Criteria" shall mean any one or more of the
following performance criteria, either individually, alternatively or in any
combination, applied to either the Company as a whole or to a business unit,
Affiliate or business segment, either individually, alternatively or in any
combination, and measured either annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established target, to previous
years' results or to a designated comparison group, in each case as specified by
the Committee in the Award: (i) cash flow; (ii) earnings (including gross
margin, earnings before interest and taxes, earnings before taxes, and net
earnings); (iii) earnings per share; (iv) growth in earnings or earnings per
share; (v) stock price; (vi) return on equity or average stockholders' equity;
(vii) total stockholder return; (viii) return on capital; (ix) return on assets
or net assets; (x) return on investment; (xi) revenue; (xii) income or net
income; (xiii) operating income or net operating income; (xiv) operating profit
or net operating profit; (xv) operating margin; (xvi) return on operating
revenue; (xvii) market share; (xviii) contract awards or backlog; (xix) overhead
or other expense reduction; (xx) growth in stockholder value relative to the
moving average of the S&P 500 Index or a peer group index; (xxi) credit rating;
(xxii) strategic plan development and implementation; (xxiii) improvement in
workforce diversity, (xxiv) EBITDA, and (xxv) any other similar criteria. The
Committee may appropriately adjust any evaluation of performance under a
Qualifying Performance Criteria to exclude any of the following events that
occurs during a performance period: (A) asset write-downs; (B) litigation or
claim judgments or settlements; (C) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results; (D)
accruals for reorganization and restructuring programs; and (E) any
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management's discussion and analysis of financial
condition and results of operations appearing in the Company's annual report to
stockholders for the applicable year.

         (c) CERTIFICATION. Prior to the payment of any compensation under an
Award intended to qualify as "performance-based compensation" under Section
162(m) of the Code, the Committee shall certify the extent to which any
Qualifying Performance Criteria and any other material terms under such Award
have been satisfied (other than in cases where such relate solely to the
increase in the value of the Common Stock).

         (d) DISCRETIONARY ADJUSTMENTS PURSUANT TO SECTION 162(M).
Notwithstanding satisfaction or completion of any Qualifying Performance
Criteria, to the extent specified at the time of grant of an Award to "covered
employees" within the meaning of Section 162(m) of the Code, the number of
Shares, Options or other benefits granted, issued, retained and/or vested under
an Award on account of satisfaction of such Qualifying Performance Criteria may
be reduced by the Committee on the basis of such further considerations as the
Committee in its sole discretion shall determine.

         (e) SECTION 409A. Notwithstanding anything in the Plan to the contrary,
it is the intent of the Company that all Awards granted under this Plan shall
not cause an imposition of the additional taxes provided for in Section
409A(a)(1)(B) of the Code.

                                       13

<Page>

15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
SALE.

         (a) CHANGES IN CAPITALIZATION.

                  (i) If any change in the outstanding Common Stock subject to
         the Plan or underlying any Award results from any stock split, reverse
         stock split, combination, consolidation, spin-off, recapitalization,
         exchange of Shares, or any capital adjustment or transaction similar to
         the foregoing or any distribution to holders of Common Stock other than
         regular cash dividends, then (A) the limitations set forth in Section
         3, (B) the number, kind and class of Shares covered by each outstanding
         Award, (C) the price per Share (but not the total price) subject to
         each outstanding Award, and (D) any other affected terms of outstanding
         Awards, shall be proportionally adjusted to prevent dilution or
         enlargement of rights under the Plan.

                  (ii) The Administrator shall make such adjustment in such
         manner as it may deem equitable and appropriate, subject to compliance
         with Applicable Laws. Any determination, substitution or adjustment
         made by the Administrator under this Section shall be conclusive and
         binding on all persons. Except as expressly provided herein, neither
         the Company's issuance of shares of stock of any class or securities
         convertible into shares of stock of any class, nor the conversion of
         any convertible securities of the Company, shall be treated as a
         transaction requiring any substitution or adjustment under this
         Section.

         (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Option to be
fully vested and exercisable until ten days prior to such transaction. In
addition, the Administrator may provide that any restrictions on any Award shall
lapse prior to the transaction, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Award will terminate immediately prior to the
consummation of such proposed transaction.

         (c) CHANGE IN CONTROL. In the event there is a Change in Control of the
Company, as determined by the Board or a Committee, the Board or Committee, or
board of directors of any surviving entity or acquiring entity may, in its
discretion, (i) provide for the assumption, continuation or substitution
(including an award to acquire substantially the same type of consideration paid
to the shareholder in the transaction in which the Change in Control occurs) of,
or adjustment to, all or any part of the Awards; (ii) accelerate the vesting of
all or any part of the Options and SARs and terminate any restrictions on all or
any part of the Stock Awards or Cash Awards; (iii) provide for the cancellation
of all or any part of the Awards for a cash payment to the Participants; and
(iv) provide for the cancellation of all or any part of the Awards as of the
closing of the Change in Control; provided, that the Participants are notified
that they must exercise or redeem their Awards (including, at the discretion of
the Board or Committee, any unvested portion of such Award) at or prior to the
closing of the Change in Control.

16. AMENDMENT AND TERMINATION OF THE PLAN.

         (a) AMENDMENT AND TERMINATION. The Administrator may amend, alter or
discontinue the Plan or any Award Agreement, but any such amendment shall be
subject to approval of the stockholders of the Company in the manner and to the
extent required by Applicable Law.

         (b) EFFECT OF AMENDMENT OR TERMINATION. No amendment, suspension or
termination of the Plan shall impair the rights of any Award, unless mutually
agreed otherwise between the Participant and the Administrator, which agreement
must be in writing and signed by the Participant and the Company. Termination of
the Plan shall not affect the Administrator's ability to exercise the powers
granted to it hereunder with respect to Awards granted under the Plan prior to
the date of such termination.

                                       14

<Page>

         (c) EFFECT OF THE PLAN ON OTHER ARRANGEMENTS. Neither the adoption of
the Plan by the Board or a Committee nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or any Committee to adopt such other
incentive arrangements as it or they may deem desirable, including, without
limitation, the granting of restricted stock or stock options otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

17. DESIGNATION OF BENEFICIARY.

         (a) An Awardee may file a written designation of a beneficiary who is
to receive the Awardee's rights pursuant to Awardee's Award or the Awardee may
include his or her Awards in an omnibus beneficiary designation for all benefits
under the Plan. To the extent that Awardee has completed a designation of
beneficiary such beneficiary designation shall remain in effect with respect to
any Award hereunder until changed by the Awardee to the extent enforceable under
Applicable Law.

         (b) Such designation of beneficiary may be changed by the Awardee at
any time by written notice. In the event of the death of an Awardee and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such Awardee's death, the Company shall allow the executor or
administrator of the estate of the Awardee to exercise the Award, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may allow the spouse or one or more dependents
or relatives of the Awardee to exercise the Award to the extent permissible
under Applicable Law.

18. NO RIGHT TO AWARDS OR TO SERVICE. No person shall have any claim or right to
be granted an Award and the grant of any Award shall not be construed as giving
an Awardee the right to continue in the service of the Company or its
Affiliates. Further, the Company and its Affiliates expressly reserve the right,
at any time, to dismiss any Service Provider or Awardee at any time without
liability or any claim under the Plan, except as provided herein or in any Award
Agreement entered into hereunder.

19. LEGAL COMPLIANCE. Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares shall comply with Applicable Laws and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
Notwithstanding anything in the Plan to the contrary, it is the intent of the
Company that the Plan shall be administered so that the additional taxes
provided for in Section 409A(a)(1)(B) of the Code are not imposed.

20. INABILITY TO OBTAIN AUTHORITY. To the extent the Company is unable to or the
Administrator deems that it is not feasible to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
the Company shall be relieved of any liability with respect to the failure to
issue or sell such Shares as to which such requisite authority shall not have
been obtained.

21. RESERVATION OF SHARES. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

22. NOTICE. Any written notice to the Company required by any provisions of this
Plan shall be addressed to the Secretary of the Company and shall be effective
when received.

23. GOVERNING LAW; INTERPRETATION OF PLAN AND AWARDS.

         (a) This Plan and all determinations made and actions taken pursuant
hereto shall be governed by the substantive laws, but not the choice of law
rules, of the state of Nevada.

                                       15

<Page>

         (b) In the event that any provision of the Plan or any Award granted
under the Plan is declared to be illegal, invalid or otherwise unenforceable by
a court of competent jurisdiction, such provision shall be reformed, if
possible, to the extent necessary to render it legal, valid and enforceable, or
otherwise deleted, and the remainder of the terms of the Plan and/or Award shall
not be affected except to the extent necessary to reform or delete such illegal,
invalid or unenforceable provision.

         (c) The headings preceding the text of the sections hereof are inserted
solely for convenience of reference, and shall not constitute a part of the
Plan, nor shall they affect its meaning, construction or effect.

         (d) The terms of the Plan and any Award shall inure to the benefit of
and be binding upon the parties hereto and their respective permitted heirs,
beneficiaries, successors and assigns.

         (e) All questions arising under the Plan or under any Award shall be
decided by the Administrator in its total and absolute discretion. In the event
the Participant believes that a decision by the Administrator with respect to
such person was arbitrary or capricious, the Participant may request arbitration
with respect to such decision. The review by the arbitrator shall be limited to
determining whether the Administrator's decision was arbitrary or capricious.
This arbitration shall be the sole and exclusive review permitted of the
Administrator's decision, and the Awardee shall as a condition to the receipt of
an Award be deemed to explicitly waive any right to judicial review.

24. LIMITATION ON LIABILITY. The Company and any Affiliate which is in existence
or hereafter comes into existence shall not be liable to a Participant, an
Employee, an Awardee or any other persons as to:

         (a) THE NON-ISSUANCE OF SHARES. The non-issuance or sale of Shares as
to which the Company has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and

         (b) TAX CONSEQUENCES. Any tax consequence expected, but not realized,
by any Participant, Employee, Awardee or other person due to the receipt,
exercise or settlement of any Option or other Award granted hereunder.

25. UNFUNDED PLAN. Insofar as it provides for Awards, the Plan shall be
unfunded. Although bookkeeping accounts may be established with respect to
Awardees who are granted Stock Awards under this Plan, any such accounts will be
used merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets which may at any time be represented by Awards, nor shall
this Plan be construed as providing for such segregation, nor shall the Company
nor the Administrator be deemed to be a trustee of stock or cash to be awarded
under the Plan. Any liability of the Company to any Participant with respect to
an Award shall be based solely upon any contractual obligations which may be
created by the Plan; no such obligation of the Company shall be deemed to be
secured by any pledge or other encumbrance on any property of the Company.
Neither the Company nor the Administrator shall be required to give any security
or bond for the performance of any obligation which may be created by this Plan.

                  IN WITNESS WHEREOF, the Company, by its duly authorized
officer, has executed this Plan, effective as of _____________, 2006.

Date:  ______________, 2006              MICROISLET, INC.,
                                         a Nevada corporation

                                         By:  __________________________________

                                         Its:  _________________________________

                                       16

<Page>

                                  PLAN HISTORY

DATE                       ACTION

June 16, 2005              Board adopts Plan with an initial reserve of
                           2,000,000 newly reserved shares and up to 5,471,339
                           recycled shares, for a total of 7,471,339 shares

November 17, 2005          Stockholders approve the Plan

January 18, 2006           Compensation Committee approves standard form of
                           agreements under the Plan

April 16, 2006             Registration Statement on Form S-8, covering the
                           Plan, becomes effective

October 3, 2006            Board adopts Amendment No. 1 to the Plan to
                           increase the reserve under the Plan by 1,000,000,
                           subject to shareholder approval, and to eliminate the
                           Administrator's discretion on whether to implement
                           adjustments to outstanding awards in the event of a
                           capitalization or stock adjustment in the Company's
                           common stock (thereby avoiding future accounting
                           charges)

November 14, 2006          Stockholders approve amendment No. 1 to the Plan

                                       17

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