Document:

exv4w1

 

Exhibit 4.1

AIRBEE WIRELESS, INC.

2002 STOCK OPTION PLAN

1. Purpose.

     This 2002 Stock Option Plan is intended to provide incentives: (a) to the
officers and other employees of Airbee Wireless, Inc. (the “Company”) by
providing such employees with opportunities to purchase stock in the Company
pursuant to options granted hereunder that qualify as “incentive stock options”
under Section 422(b) of the Internal Revenue Code of 1986, as amended; (b) to
the officers and other employees of the Company by providing such persons with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which do not qualify as “incentive stock options;” and (c) to
consultants and certain other persons rendering services to the Company by
providing such persons with opportunities to purchase stock in the Company
pursuant to options granted hereunder which do not qualify as “incentive stock
options.”

2. Definitions.

(a) “Agreements” shall have the meaning ascribed to the term as
set forth in Section 6 hereof.

(b) “Board of Directors” means the Board of Directors of the Company.

(c) “Common Stock” means the common stock, par value 0.001 per
share, of the Company.

(d) “Company” means Airbee Wireless, Inc., a Delaware corporation.

(e) “Employee” means every individual performing services
for the Company if the
relationship between him/her and the person for whom he/she performs such
services is the legal relationship of employer and employee as determined
in accordance with Section 3401(c) of Internal Revenue Code and Treasury
Regulations promulgated thereunder. A member of the Board of Directors
in his/her sole capacity as such is not an Employee.

(f) “Incentive Stock Option” means a right granted pursuant to this Plan
to purchase Common Stock that satisfies the requirements of Section 422
of the Internal Revenue Code.

(g) “Internal Revenue Code” means the Internal Revenue Code of 1986, as
amended.

(h) “Nonqualified Stock Option” means a right granted pursuant to this
Plan to purchase Common Stock that does not satisfy the requirements of
Section 422 of the Internal Revenue Code.

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(i) “Option” means a right granted pursuant to this Plan to purchase
Common Stock which may be either an Incentive Stock Option or a
Nonqualified Stock Option as determined by the Board of Directors.

(j) “Optionee” means an individual who has received an Option under the
Plan.

(k) “Plan” means this stock option plan authorizing the granting of stock
Options.

(l) “Plan Administrators” shall have the meaning ascribed to the term as
set forth in Section 5 hereof.

(m) “Reserved Shares” shall have the meaning ascribed to the term as set
forth in Section 3 hereof.

	 	(n)	 	“Fair market value” of a share of Common Stock as of any
date shall be determined for purposes of this Plan as follows: (i)
if the Common Stock is listed on a securities exchange or quoted
through the Automated Quotation National Market System of the
National Association of Securities Dealers, Inc. (NASDAQ), the fair
market value shall equal the mean between the high and low sales
prices on such exchange or through such market system, as the case
may be, on such day or in such absence of reported sales on such
day, the mean between the closing reported bid and asked prices on
such exchange or through such market system, as the case may be, on
such day, (ii) if the Common Stock is not listed or quoted as
described in the preceding clause but is quoted through NASDAQ (but
not through the National Market System), the fair market value shall
equal the mean between the closing bid and asked prices as quoted by
the National Association of Securities Dealers, Inc., through NASDAQ
for such day, and (iii) if the Common Stock is not listed or quoted
on a securities exchange or through NASDAQ, then the fair market
value shall be determined by such other method as the Plan
Administrators determine reasonable and consistent with applicable
requirements of the Internal Revenue Code and the regulations issued
thereunder applicable to incentive options; provided, however, that
if pursuant to clause (i) or (ii) fair market value is to be
determined based upon the mean of bid and asked prices and the Plan
Administrators determine that such mean does not properly reflect
the fair market value, fair market value shall be determined by the
Plan Administrators as provided in clause (iii).

3. Shares Subject to the Plan.

     Subject to adjustments pursuant to Section 8 of the Plan, no more than 30
million shares in the aggregate of the Company’s Common Stock (the “Reserved
Shares”) may be issued pursuant to the Plan to eligible participants. The
number of the Reserved Shares shall be reduced by the number of Options granted
under the Plan. The Reserved Shares may be made available from authorized but
unissued Common Stock of the Company, from Common Stock of the

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Company held as treasury stock, from any shares which may become available
due to the expiration, cancellation or other termination of any Option
previously granted by the Company, or from any combination of the foregoing.

4. Eligibility.

     The individuals eligible to receive Options under this Plan shall be such
valued Employees of the Company, and such consultants and certain other persons
rendering services to the Company, as the Board of Directors may from time to
time determine and select. Employees shall be eligible to receive both
Incentive Stock Options and Nonqualified Stock Options. Consultants and
certain other persons rendering services to the Company shall be eligible to
receive Nonqualified Stock Options.

     An Optionee may hold more than one Option. No Employee of the Company is
eligible to receive any Incentive Stock Options if such Employee, at the time
the option is granted, owns, beneficially or of record, in excess of 10% of the
outstanding voting stock of the Company or a subsidiary thereof; provided,
however, that such Employee will be eligible to receive an Incentive Stock
Option if at the time such Option is granted the Option price is at least 110%
of the fair market value (determined with regard to Section 422(c)(7) of the
Internal Revenue Code) of the stock subject to the Option and such Option by
its terms is not exercisable after the expiration of five (5) years from the
date such Option is granted.

     Pursuant to Section 422(d) of the Internal Revenue Code, no Option granted
pursuant to this Plan shall be treated as an Incentive Stock Option to the
extent that the aggregate fair market value (determined at the time the Option
was granted) of Common Stock with respect to which Options (that otherwise
qualify as Incentive Stock Options) are exercisable for the first time by an
Employee during any calendar year (under all plans of the Company and its
subsidiaries) exceeds $100,000.

5. Administration of the Plan.

(a) The Plan shall be administered by those members of the Board of
Directors, or by a committee appointed by the Board of Directors, (in
either event, the “Plan Administrators”) who are disinterested persons
within the meaning of Rule 16b-3(c)(2)(i) of the Securities Exchange Act
of 1934, as amended (“Disinterested Persons”).

(b) The Plan Administrators shall have the power, subject to, and within
the limits of, the express provisions of the Plan:

(i) To determine from time to time which eligible persons shall be
granted Options under the Plan, and the time when any
Option shall be granted to them;

(ii) To determine the number of Options to be granted to any
person;

(iii) To grant Incentive Stock Options, Nonqualified Stock Options,
or both, under the Plan to such persons;

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(iv) To determine the duration and purposes of leaves of absence
which may be granted to Optionees without constituting a
termination of their employment for purposes of the Plan;

(v) To prescribe the terms and provisions of each Option granted
under the Plan (which need not be identical);

(vi) To determine the maximum period during which Options may be
exercised;

(vii) To construe and interpret the Plan and Options granted under
it, and to establish, amend, and revoke rules and regulations for
its administration; and

(viii) Generally, to exercise such powers and to perform such acts
as are deemed necessary or expedient to promote the best interests
of the Company with respect to the Plan.

(c) Notwithstanding the foregoing, neither the Board of Directors, any
committee thereof nor any person designated pursuant to paragraph (d)
below may take any action which would cause any Plan Administrator to
cease to be a Disinterested Person with regard to this Plan or any other
stock option or other equity plan of the Company.

(d) The Plan Administrators, in the exercise of these powers, may correct
any defect or supply any omission, or reconcile any inconsistency in the
Plan, or in any Option, in the manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective. All
determinations of the Plan Administrators shall be made by majority vote.
Subject to any applicable provisions of the Company’s By-laws, all
decisions made by the Plan Administrators pursuant to the provisions of
the Plan and related orders or resolutions of the Plan Administrators
shall be final, conclusive and binding on all persons, including the
Company, stockholders of the Company, Employees and Optionees.

(e) The Plan Administrators may designate the Secretary of the Company or
other employees of the Company or competent professional advisors, to
assist in the administration of this Plan and may grant authority to such
persons to execute agreements or other documents on behalf of the Plan
Administrators.

(f) The Plan Administrators may employ such legal counsel, consultants
and agents as they may deem desirable for the administration of this Plan
and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or
agent. No present or former Plan Administrator shall be liable for any
action or determination made in good faith with respect to this Plan or
any Option granted hereunder. To the maximum extent permitted by
applicable law and the Company’s Certificate of Incorporation and
By-laws, each present or former Plan Administrator shall be indemnified
and held harmless by the Company against any cost

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or expenses (including counsel fees) or liability (including any sum paid
in settlement of a claim with the approval of the Company) arising out of
any act or omission to act in connection with this Plan unless arising
out of such person’s own fraud or bad faith. Such indemnification shall
be in addition to any rights of indemnification the person may have as a
director, officer or employee or under the Certificate of Incorporation
of the Company, the By-laws of the Company or otherwise. Expenses
incurred by the Plan Administrators in the engagement of such counsel,
consultant or agent shall be paid by the Company.

6. Option Terms and Conditions.

     The Options granted under the Plan shall be evidenced by written Option
Agreements (the “Agreements”) consistent with the terms of the Plan which shall
be executed by the Company and the Optionee. The Agreements, in such form as
the Plan Administrators shall from time to time approve, shall, incorporate the
following terms and conditions:

(a) Time of Exercise. Options shall be exercisable in accordance
with the terms of the Agreements as approved by the Plan Administrators
from time to time. Incentive Stock Options may be exercised only if, at
all times during the period that begins on the date of the granting of
the Incentive Stock Option and that ends on the day three (3) months
before the date of such exercise, the Optionee was an Employee of the
Company; provided, however, that if the Optionee is “disabled” within the
meaning of Section 22(e) of the Internal Revenue Code, then the end of
the preceding post-employment exercise period shall be extended to one
(1) year.

(b) Purchase Price. Except as otherwise provided in Section 4
hereof, the purchase price per share of Common Stock deliverable upon the
exercise of an Incentive Stock Option shall not be less than the fair
market value of the Common Stock on the date the Option is granted. The
purchase price per share of Common Stock deliverable upon the exercise of
a Nonqualified Stock Option shall be determined by the Plan
Administrators in their sole discretion.

(c) Method of Exercise. In order to exercise an Option in whole
or in part, the Optionee shall give written notice to the Company at its
principal place of business of such exercise, stating the number of
 shares with respect to which the Option is being exercised. Such notice
shall be accompanied by full payment of the purchase price thereof in
cash. The exercise date of the Option shall be the date the Company
receives such notice with any necessary accompaniments in satisfactory
order.

(d) Method of Payment. The purchase price shall be paid
for (i) in cash or by certified
check or bank draft or money order payable to the order of the Company or
(ii) with the consent of the Plan Administrators, and to the extent
permitted by them (not later than the time of grant, in the case of an
Incentive Stock Option), through delivery of shares of Common Stock
having a fair market value on the date of exercise equal to the purchase
price ( but only if such shares have been held by the Option holder for a
period of time sufficient to prevent a pyramid exercise that would create a charge to
the Company’s

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 earnings) or (iii) any combination of the foregoing methods
of payment with the consent of the Plan Administrators or (iv) each
Optionee shall also be entitled to exercise an option in a “cashless
exercise” by delivering the number of options to be exercised (with no
payment of the exercise price) to the Company and receiving in return
options shares equal to the number of shares by (i) multiplying the then
current “fair market value” of the Company’s outstanding public shares of
Common Stock by the number of options to be exercised, (ii) then
deducting the aggregate exercise price associated with the options being
exercised, and (iii) dividing the remaining number by the current “fair
market value.” For purposes of the option, the “fair market value” of a
share of Common Stock as of a certain date shall be the closing sale
price of the Common Stock on such exchange as the Common Stock is then
traded, on the trading date immediately preceding the date “fair market
value” is being determined. If the Common Stock is not then traded on a
public exchange, then the “fair market value” shall be established by the
Plan Administrators.

(e) Transferability. An Option shall not be transferable by the
Optionee other than at death and an Option granted to such Optionee is
exercisable, during his lifetime, only by such Optionee.

     The Agreements may also contain such other terms, provisions, and
conditions consistent with the Plan and applicable provisions of the Internal
Revenue Code as the Plan Administrators may determine are necessary or proper.

7. Rights of Stockholders and Optionee.

     An Optionee shall not be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such Option, unless
and until: (a) the Option shall have been exercised pursuant to the terms
thereof; (b) the Company shall have issued and delivered the shares to the
Optionee; and (c) the Optionee’s name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full
voting and other ownership rights with respect to such shares.

	8.	 	Adjustments in the Event of Changes in the Capital Structure,
Reorganization Anti-Dilution or Accounting Changes.

(a) Changes in Capital Structure. In the event of a change in the
corporate structure or shares of the Company, the Plan Administrators
(subject to any required action by the stockholders) shall make such
equitable adjustments designed to protect against dilution as they may
deem appropriate in the number and kind of shares authorized by the Plan
and, with respect to outstanding Options in the number and kind of shares
covered thereby and in the exercise price of such Options on the dates
granted. For the purpose of this Section, a change in the corporate
structure or shares of the Company shall include, but is not limited to,
changes resulting from a recapitalization, stock split, consolidation,
rights offering, stock dividend, reorganization, or liquidation.

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(b) Reorganization-Continuation of the Plan. Upon the effective
date of the dissolution or liquidation of the Company, or a
reorganization, merger or consolidation of the Company with one or more
corporations in which the Company is not the surviving corporation, or of
a transfer of substantially all of the Company’s property or more than
80% of the then outstanding shares of the Company to another corporation
not controlled by the Company’s stockholders, the Plan and any Option
previously granted under the Plan shall terminate unless provision be
made in writing in connection with such transaction for the continuation
of the Plan and for the assumption of the Options previously granted, or
for the substitution of new Options covering the shares of a successor
employer corporation, or a parent or subsidiary thereof, with appropriate
adjustments (in accordance with the applicable provisions of the Internal
Revenue Code) as to the number and kind of shares and price per share, in
which event the Plan and the Options previously granted or new Options
substituted therefor shall continue in the manner and under the terms as
provided.

(c) Reorganization-Termination of the Plan. In the event of a
dissolution, liquidation, reorganization, merger, consolidation, transfer
of assets or transfer of shares, as provided in Section 8(b) above, and
if provision is not made in such transaction for the continuance of the
Plan and for the assumption of Options previously granted or the
substitution of new Options covering the shares of a successor employer
corporation or a parent or subsidiary thereof, then an Optionee under the
Plan shall be entitled to written notice prior to the effective date of
any such transactions stating that rights under his Option must be
exercised within thirty (30) days of the date of such notice or they will
be terminated.

9. General Restrictions.

     Each Option shall be subject to the requirement that, if at any time the
Plan Administrators shall determine, in their discretion, that the listing or
qualification of the shares or other securities subject to such Option upon any
securities exchange, or under any state or federal law or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with the granting thereof or the issue or
purchase of shares or payments of any amount thereunder, such Option may not be
exercised in whole or in part and no amounts may be received thereunder unless
such listing, qualification, consent or approval shall have been effected or
obtained free of any conditions unacceptable to the Plan Administrators.

10. Employment.

     Nothing in this Plan shall be deemed to grant any right of continued
employment to a participating employee or to limit or waive any rights of the
Company to terminate such employment at any time, with or without cause.

11. Amendment.

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     Subject to the provisions of Sections 5(c) and 5(d) hereof, the Board of
Directors of the Company shall have the power to amend or revise the terms of
this Plan or any part thereof without further action of the stockholders;
provided, however, that no such amendment shall impair any Option or deprive
any Optionee of shares that may have been granted to him under the Plan without
his consent; and provided, further, that no such amendment shall, without
stockholder approval:

(a) increase the aggregate number of the Reserved Shares for the purpose
of the Plan;

(b) change the class of individuals eligible to receive Options under the
Plan;

(c) extend the maximum period during which any Option may be granted or
exercised;

(d) reduce the Option price per share under any Option below fair market
value; or

(e) extend the term of the Plan.

12. Effective Date and Termination of Plan.

(a) The effective date of the Plan shall be August 16, 2002; provided,
however, in the event that the Plan is not approved by the voting
stockholders of the Company on or before August 16, 2002, the Plan and
all Options granted and to be granted hereunder shall be null and void
and the Company shall have no obligation of any nature whatsoever to any
employee or other person arising out of the Plan or any options granted
or to be granted hereunder.

(b) The Board of Directors of the Company may terminate the Plan at any
time with respect to any shares that are not subject to Options. Unless
terminated earlier by the Board of Directors, the Plan shall terminate on
August 16, 2012, and no Options shall be granted under this Plan after it
has been terminated. Termination of this Plan shall not affect the right
and obligation of any Optionee with respect to Options granted prior to
termination.

13. Withholding Taxes.

     Whenever under the Plan, shares are to be issued in satisfaction of
Options granted hereunder, the Company shall have the right to require the
recipient to make arrangements to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any, prior to
or following the delivery of any certificate or certificates for such shares.

14. Qualification.

     This Plan is adopted pursuant to, and is intended to comply with, the
applicable provisions of the Internal Revenue Code and the regulations
thereunder. Incentive Stock Options

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granted pursuant to this Plan are intended to be “incentive stock options”
as that term is defined in Section 422 of the Internal Revenue Code and the
regulations thereunder. In the event this Plan or any Incentive Stock Option
granted pursuant to this Plan is in any way inconsistent with the applicable
legal requirements of the Internal Revenue Code or any regulation thereunder,
this Plan and any Incentive Stock Option granted pursuant to this Plan shall be
deemed automatically amended as of the date hereof to conform to such legal
requirements, if such conformity can be achieved by amendment.

15. Notice to Company of Disqualifying Disposition.

     Each Employee who receives an Incentive Stock Option must agree to notify
the Company in writing immediately after the Employee makes a disqualifying
disposition of any Common Stock acquired pursuant to the exercise of an
Incentive Stock Option. For purposes of this Plan, a “disqualifying
disposition” is any disposition (including any sale) of such Common Stock
before the later of (i) two years after the date the Employee was granted the
Incentive Stock Option, or (ii) one year after the date the Employee acquired
Common Stock by exercising the Incentive Stock Option.

9<PAGE>
                                                                     Exhibit 4.2

                                 PROMISSORY NOTE

1. NAMES

Borrower:

     Airbee Wireless, Inc., a Delaware corporation doing business as Airbee
     9400 Key West Avenue
     Rockville, Maryland 20850

Lender:

2. PROMISE TO PAY

For value received, Borrower promises to pay Lender $________ and interest at
the yearly rate of __% on the unpaid balance as specified below. Borrower may
pay the note at any time in increments of not less than $10,000 and can be in
the form of cash or stock or combinations of both. If payment is made in stock,
it means Airbee Wireless, Inc. common stock; the value of which is the five day
average closing bid price on the days preceding payment.

3. PAYMENT DATE

Borrower will pay the entire amount of principal and interest on or before
December 31, 2004.

4. PREPAYMENT

Borrower may prepay all or any part of the principal without penalty. If paid in
stock, the number of shares is to be determined on the settlement date by the
average closing bid price of the stock for the five days preceding the
settlement date.

5. SECURITY

This note is secured by the stock of Airbee Wireless, Inc.

6. COLLECTION COSTS

If Lender prevails in a lawsuit to collect on this note, Borrower will pay
Lender's costs and lawyer's fees in an amount the court finds to be reasonable.

                                     Page 1
<PAGE>

7. ENTIRE AGREEMENT

This is the entire agreement between the parties. It replaces and supersedes any
and all oral agreements between the parties, as well as any prior writings.

8. SUCCESSORS AND ASSIGNEES

This agreement binds and benefits the heirs, successors and assignees of the
parties.

9. NOTICES

All notices must be in writing. A notice may be delivered to a party at the
address that follows a party's signature or to a new address that a party
designates in writing. A notice may be delivered:

      o  in person

      o  by certified mail, or

      o  by overnight courier.

10. GOVERNING LAW

This agreement will be governed by and construed in accordance with the laws of
the state of Maryland.

11. MODIFICATION

This agreement may be modified only by a writing signed by the party against
whom such modification is sought to be enforced.

12. WAIVER

If one party waives any term or provision of this agreement at any time, that
waiver will be effective only for the specific instance and specific purpose for
which the waiver was given. If either party fails to exercise or delays
exercising any of its rights or remedies under this agreement, that party
retains the right to enforce that term or provision at a later time.

13. SEVERABILITY

If any court determines that any provision of this agreement is invalid or
unenforceable, any invalidity or unenforceability will affect only that
provision and will not make any other provision of this agreement invalid or
unenforceable and such provision shall be modified, amended or limited only to
the extent necessary to render it valid and enforceable.

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<PAGE>

14. DISPUTES

If a dispute arises, the parties will try in good faith to settle it through
mediation conducted by a mediator to be mutually selected. The parties will
share the costs of the mediator equally. Each party will cooperate fully and
fairly with the mediator and will attempt to reach a mutually satisfactory
compromise to the dispute. If the dispute is not resolved within 30 days after
it is referred to the mediator, it will be arbitrated by an arbitrator to be
mutually selected. Judgment on the arbitration award may be entered in any court
that has jurisdiction over the matter. Costs of arbitration, including lawyers'
fees, will be allocated by the arbitrator.

BORROWER

Airbee Wireless, Inc.,
a Delaware corporation doing business as Airbee
9400 Key West Avenue
Rockville, Maryland 20850

Dated: _______________________________________________________

By:    _______________________________________________________
                        E. Eugene Sharer
                           Secretary

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