Document:

Date: February 21, 2007

To: STEM CELL INNOVATIONS, INC.
1812 FRONT STREET
SCOTCH PLAINS NJ 07076
908-663-2150

By fax and email

Attention: Mark Germain

Re: Equity investment and license agreement
    ---------------------------------------

This letter will confirm our understanding concerning (a) the proposed exchange
of shares of common stock of Stem Cell Innovations, Inc. ("Stem Cell") for
shares of common stock and warrants to purchase common stock of PluriStem Life
Systems, Inc. ("PluriStem") and (b) the license by Stem Cell of certain rights
of PluriStem Ltd. ("PluriStem Ltd.") in exchange for shares of common stock of
Stem Cell (collectively, the "Transaction"). It is contemplated that more
complete terms of the Transaction shall be set forth in certain definitive
agreements (the "Definitive Agreements"), including without limitation a stock
purchase agreement, a license agreement, and a warrant certificate, each
containing terms customary for transactions of this type, with a target date for
execution of the Definitive Agreements and closing of the Transaction (the
"Closing Date") No later then April 10, 2007. It is understood that, although
this letter does not contain all of the terms to be set forth in the Definitive
Agreements, this letter is intended to be binding on the parties hereto, and
that the parties shall negotiate in good faith the terms of and otherwise use
reasonable efforts to execute and deliver such Definitive Agreements. The terms
of our understanding are as follows:

1. PluriStem shall issue to Stem Cell 66,000,000 shares of PluriStem common
stock (the "PluriStem Shares") and a five year non-callable warrant (the
"PluriStem Warrant") to buy 66,000,000 shares of PluriStem common stock (the
"Underlying PluriStem Shares") at an exercise price of $.03 per share. In
exchange, Stem Cell shall issue to PluriStem 27,000,000 shares of Stem Cell
common stock (the "Stem Cell Exchange Shares"). Such exchange will be solely an
exchange of securities and no cash will transfer.

2. Stem Cell will license from PluriStem Ltd. certain rights (the "Licensed
Rights"), in exchange for an upfront license fee of 23,000,000 shares of Stem
Cell common stock (the "Stem Cell License Shares" and together with the Stem
Cell Exchange Shares, the "Stem Cell Shares") and the milestone payments,
royalties and other payments listed below.

If needed Stem Cell will reimburse PluriStem Ltd. for its reasonable out of
pocket expenses related to the training of Stem Cell personnel in the use of PLX
I product to be used in the Territory (as defined below). Such expenses will
include the cost of equipment (i.e. bioreactors), the salaries of employees for
their time expended based on an annual FTE rate of $100,000, travel expenses,
and other costs if any.

3. The Licensed Rights are as follows:

(a) Exclusive Marketing rights to the PLX I technology for therapeutic
applications in Asia (the final list of countries will be set forth in the
Definitive Agreements but shall not include Japan) (the "Territory") . For
clarity, the PLX I technology as used in this paragraph means the use of
mesenchymal cells derived from placenta ("MSCs") and grown in PluriStem Ltd's
3-D microenvironment (including improvements to the microenvironment) for
therapeutic indications including bone marrow transplant, stroke and others, but
<PAGE>
                                     - 2 -

not any applications where the cells grown in the 3-D environment are derivative
of or downstream of the MSCs. In addition, if Stem Cell, in its sole judgement,
determines that it is necessary to manufacture the product in the Territory,
Pluristem shall use its best efforts to obtain approval of the Chief Scientist
of Israel to transfer such rights. If the Company desires to have the product
manufactured outside the Territory for sale in the Territory, Pluristem shall
manufacture the product for the Company at a price to be determined in good
faith in the definitive agreement.

(b) Rights to use the PLX I technology in Stem Cell's in-vitro screening
applications, if any, worldwide. For clarity, the PLXI technology as used in
this subparagraph means the use of both MSCs and cells that are derivative of or
downstream of MSCs grown in PluriStem Ltd.'s 3-D microenvironment (including
improvements); and

(c) Rights to use the 3-D microenvironment technology (including improvements)
in conjunction with Stem Cell's PluriCells and cells derived by Stem Cell from
its PluriCell technology, including downstream cells, worldwide for in vitro and
in vivo uses. For clarity, any cells derived by Stem Cell utilizing the 3-D
microenvironment technology (including improvements) will not be used for any
hematopoietic applications.

4. With respect to the rights granted in 3(a) above, Stem Cell (directly or
through an affiliate or sublicense) will have diligence obligations to move at
least one therapeutic application forward to the extent to be agreed in the
license agreement and not later than 18 months after comparable steps are taken
by PluriStem outside of the Territory and will discuss with PluriStem commencing
at least one additional clinical trial for another indication not later than 24
months after a similar is taken by PluriStem outside of Asia. PluriStem Ltd. and
Stem Cell will each make available to the other all relevant pre-clinical and
clinical data, and otherwise cooperate in the clinical and regulatory process.
Pluristem Ltd. will have the free exclusive right to use the data and results of
Stem Cell's therapeutic applications in Asia using PLX I technology in the rest
of the world, and likewise Stem Cell will have the free exclusive right to use
the data and results of PluriStem Ltd's therapeutic applications granted in 3(a)
outside of Asia for use in Asia. In the event Stem Cell does not timely meet its
diligence obligations as a result of inaction (rather than scientific, clinical,
regulatory or similar issues), PluriStem Ltd may elect to reclaim the rights to
those applications with respect to which the diligence requirements have not
been met.

5. With respect to the rights granted in 3(a) above, PluriStem Ltd will be
entitled to receive the following milestone payments and royalties per IND:

(a) Upon the first treatment of a subject in a Phase I trial in the Territory: $
50,000

(b) Upon the first treatment of a subject in a Phase II trial in the Territory:
$ 150,000

(c) Upon the first treatment of a subject in a Phase III trial in the Territory:
$ 500,000

(d) Upon the first filing of a New Drug Application (NDA) (or equivalent): $
1,000,000

(e) Upon the first approval for an NDA indication in the Territory: $ 3,000,000

(f ) Upon each additional approval for a new NDA indication in the Territory $
1,500,000 Each of the clinical milestones set forth above will be payable only
once per product upon the initial achievement of such milestone (i.e. if a
clinical trial is repeated the milestone would be due only with respect to the
first time the trial is conducted). In the event a development milestone is
skipped due to more rapid advancement than anticipated by the above schedule,
the skipped milestone payment will be due in conjunction with the payment that
is due at the next applicable milestone event.
<PAGE>
                                     - 3 -

(g) With respect to net sales by Stem Cell or an affiliate in the territory
royalties of:

  4% with respect to annual net sales of between $1 and $250 MM;
  5% with respect to annual net sales of between $250 MM and $500 MM;
  6% with respect to annual net sales of between $500 MM and $1B; and
  8% with respect to annual sales in excess of $1B.

6. With respect to the rights granted in 3(b) above, PluriStem Ltd. will be
entitled to receive royalties on sales by Stem Cell or its affiliates of 4%, and
with respect to the rights granted in 3(c) above royalties on sales by Stem Cell
or its affiliates of 2%.

7. All royalties will be subject to reduction in the event third party
technology is incorporated in a product that requires the payment of a royalty
or similar payment. The reduction will equal 50% of the third party payment but
the royalty will not be reduced below 50% of its stated rate.

8. Stem Cell will have the right to sublicense its rights. In the event of a
sublicense to a non-affiliate PluriStem Ltd. will receive 40% of any upfront
license fee, whether in cash or other form of consideration, received by Stem
Cell from the sublicensee with respect to the rights, including any equity
received by Stem Cell as a founder of a non-affiliated partially owned
subsidiary (it being understood that Stem Cell anticipates transferring rights
to other technology to such a subsidiary and agreed that the allocable value
between the two technologies will be deemed to be equal)and, in lieu of the
royalties and milestones set forth above, if the sublicense is entered into
before the first subject is treated for an indication, 40% of the royalties and
milestones received by Stem Cell from the sublicensee, and if after the first
subject is treated 30% of the royalties and milestones received by Stem Cell
from the sublicensee.

9. Stem Cell and PluriStem Ltd. acknowledge that a further collaboration
exploring the combination of Stem Cell's PluriCells (and cells derivative
thereof) with PluriStem's PLXI technology, including the MSCs and cells
derivative thereof, may be in the interest of both companies, and without any
binding effect, agree discuss the scope and terms of such a collaboration in
reasonable due course.

10. PluriStem and Pluristem Ltd represents and warrants to Stem Cell as of the
date hereof, and PluriStem and Pluristem Ltd shall represent and warrant in the
Definitive Agreements as of the Closing Date, as follows:

(a) PluriStem is a corporation duly organized, validly existing, and in good
standing under the laws of Nevada, with all requisite corporate power and
authority to own, lease, license, and use its properties and assets and to carry
on the business in which it is now engaged and the business in which it
contemplates engaging.
PluriStem Ltd. is a corporation duly organized, validly existing, and in good
standing under the laws of Israel, with all requisite corporate power and
authority to own, lease, license, and use its properties and assets and to carry
on the business in which it is now engaged and the business in which it
contemplates engaging.

(b) PluriStem and Pluristem Ltd. has all requisite right, power and authority to
execute and deliver this letter agreement and the Definitive Agreements, to
grant the license for the Licensed Rights, and to perform its obligations
hereunder and under the Definitive Agreements, to do so will not violate or
conflict with any material term or provision of any agreement, instrument,
statute, rule, regulation, order, or decree to which PluriStem and Pluristem Ltd
is a party or by which PluriStem and Pluristem Ltd is bound, and PluriStem and
Pluristem Ltd is not aware of any adverse claims with respect to the Licensed
<PAGE>
                                     - 4 -

Rights. All necessary corporate proceedings of PluriStem and Pluristem Ltd have
been duly taken to authorize the execution, delivery, and performance of this
letter agreement and the Definitive Agreements by PluriStem and Pluristem Ltd
and this letter agreement has been, and on the Closing Date the Definitive
Agreements will be, duly executed and delivered by PluriStem and Pluristem Ltd.
This letter agreement constitutes, and on the Closing Date the Definitive
Agreements will constitute, the legal, valid, and binding obligation of
PluriStem and Pluristem Ltd enforceable as to PluriStem and Pluristem Ltd in
accordance with their respective terms.

(c) The PluriStem Shares have been reserved for issuance and, when issued and
delivered on the Closing Date, will be validly authorized, validly issued, fully
paid, and nonassessable. Stem Cell will receive good title to the PluriStem
Shares, free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts, other than (i) those
imposed by Stem Cell or other person receiving the same, (ii) restrictions on
transfer under applicable securities laws, and (iii) as provided herein.

(d) All Underlying PluriStem Shares have been reserved for issuance and, when
issued and delivered on exercise of the PluriStem Warrants and payment therefor
in accordance with the PluriStem Warrants, will be validly authorized, validly
issued, fully paid, and nonassessable. Each person receiving Underlying
PluriStem Shares upon exercise of the PluriStem Warrants in accordance with
their terms will receive will receive good title to such shares, free and clear
of all liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts, other than (i) those imposed by Stem Cell or
other person receiving the same, (ii) restrictions on transfer under applicable
securities laws, and (iii) as provided in the warrant certificate.

(e) PluriStem is acquiring the Stem Cell Shares for its own account (and not for
the account of others) for investment and not with a view to the distribution
thereof. PluriStem understands that it may not sell or otherwise dispose of the
Stem Cell Shares in the absence of either a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") or an exemption from
the registration provisions of the Securities Act, and the certificate or
certificates representing the Stem Cell Shares may contain a legend to the
foregoing effect.

11. Stem Cell represents and warrants to PluriStem and Pluristem Ltd as of the
date hereof, and Stem Cell shall represent and warrant in the Definitive
Agreements as of the Closing Date, as follows:

(a) Stem Cell is a corporation duly organized, validly existing, and in good
standing under the laws of Delaware, with all requisite corporate power and
authority to own, lease, license, and use its properties and assets and to carry
on the business in which it is now engaged and the business in which it
contemplates engaging.

(b) Stem Cell has all requisite power and authority to execute, deliver, and
perform this letter agreement and the Definitive Agreements and to grant the
license. All necessary corporate proceedings of Stem Cell have been duly taken
to authorize the execution, delivery, and performance of this letter agreement
and the Definitive Agreements by Stem Cell and this letter agreement has been,
and on the Closing Date the Definitive Agreements will be, duly executed and
delivered by Stem Cell. This letter agreement constitutes, and on the Closing
Date the Definitive Agreements will constitute, the legal, valid, and binding
obligation of Stem Cell enforceable as to Stem Cell in accordance with their
respective terms.

(c) The Stem Cell Shares have been reserved for issuance and, when issued and
delivered on the Closing Date, will be validly authorized, validly issued, fully
paid, and nonassessable. PluriStem and Pluristem Ltd will receive good title to
the Stem Cell Shares, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, and voting trusts, other than
<PAGE>
                                     - 5 -

(i) those imposed by PluriStem or other person receiving the same, (ii)
restrictions on transfer under applicable securities laws, and (iii) as provided
herein.

(d) Stem Cell is acquiring the PluriStem Shares, PluriStem Warrants and, upon
exercise of the PluriStem Warrants in accordance with their terms, the
Underlying PluriStem Shares (the "PluriStem Securities"), for its own account
(and not for the account of others) for investment and not with a view to the
distribution thereof. Stem Cell understands that it may not sell or otherwise
dispose of the PluriStem Securities in the absence of either a registration
statement under the Securities Act or an exemption from the registration
provisions of the Securities Act, and the certificate or certificates
representing the PluriStem Securities may contain a legend to the foregoing
effect.

12. PluriStem will indemnify and hold harmless Stem Cell and its directors,
officers, agents and employees from and against all claims, suits, and damages
whatsoever arising from or in connection with the breach or alleged breach by
PluriStem of any covenant, representation or warranty under this letter
agreement or any of the Definitive Agreements or the use by Stem Cell of the
Licensed Rights.
Stem Cell will indemnify and hold harmless PluriStem , Pluristem Ltd and its
directors, officers, agents and employees from and against all claims, suits,
and damages whatsoever arising from or in connection with the breach or alleged
breach by Stem Cell of any covenant, representation or warranty under this
letter agreement or any of the Definitive Agreements.

13. Each party will co-ordinate with the other as to press releases and
disclosure of the terms of this agreement.

Following your signature, the parties will cause their respective officers,
employees, attorneys, agents, accountants, and other representatives working on
the Transaction to cooperate with each other with respect to the Transaction
until the Transaction is consummated.

Each party shall insure that all confidential information which such party or
any of its respective officers, directors, employees, attorneys, agents,
investment bankers, or accountants may now possess or may hereafter create or
obtain relating to the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of the other party, any
affiliate of the other party, or any customer or supplier of such other party or
any such affiliate shall not be published, disclosed, or made accessible by any
of them to any other person or entity at any time or used by any of them, in
each case without the prior written consent of the other party; provided,
however, that the restrictions of this sentence shall not apply (a) as may
otherwise be required by law, (b) as may be necessary or appropriate in
connection with the enforcement of this Agreement, or (c) to the extent such
information shall have otherwise become publicly available. Each party shall,
and shall cause all of such other persons and entities who received confidential
data from it to, deliver to the other party all tangible evidence of such
confidential information to which the restrictions of the foregoing sentence
apply at such time as negotiations with respect to the Transaction are
terminated before the parties enter into any formal agreement as contemplated by
this letter of intent.

This letter may not be assigned by either of the parties hereto. Neither party
shall be responsible for any of the other's expenses in connection with the
negotiations, documents, or transactions contemplated hereby.

This letter may be signed in two or more counterparts, any one of which need not
contain the signature of more than one party, but all such counterparts taken
together will constitute one and the same agreement.
<PAGE>
                                     - 6 -

This letter shall be governed by and construed in accordance with the laws of
the State of Delaware, without giving effect to conflict of laws.

                                             PluriStem Ltd

                                             By: /s/ ZAMI ABERMAN
                                                 -------------------------------
                                                 Zami Aberman, Chairman

                                             PluriStem Life Systems, Inc.

                                             By: /s/ ZAMI ABERMAN
                                                 -------------------------------
                                                 Zami Aberman, Chairman

Terms accepted and agreed this 21st day of February, 2007.

Stem Cell Innovations, Inc.

By: /s/ DR. JAMES H. KELLY
    ---------------------------------
    Name:  Dr. James H. Kelly
    Title: Chief Executive Officerx

     

    EXHIBIT
      4.0

    

    SUB
      SURFACE WASTE MANAGEMENT OF DELAWARE, INC.

    

    2007-II
      EMPLOYEE STOCK INCENTIVE PLAN

    

    As
      Adopted February 23, 2007

    

    

    
      	1.	
              PURPOSE.

            

    

    

    The
      purpose of this Plan is to provide incentives to attract, retain and motivate
      eligible persons whose present and potential contributions are important to
      the
      success of the Company, its Parent and Subsidiaries, by offering them an
      opportunity to participate in the Company’s future performance through awards of
      Options, Restricted Stock and Stock Bonuses. Capitalized terms not defined
      in
      the text are defined in Section 2.

    

    
      	2.	
              DEFINITIONS.

            

    

    

    As
      used
      in this Plan, the following terms will have the following meanings:

    

    “AWARD”
means
      any award under this Plan, including any Option, Restricted Stock or Stock
      Bonus.

    

    “AWARD
      AGREEMENT”
means,
      with respect to each Award, the signed written agreement between the Company
      and
      the Participant setting forth the terms and conditions of the
      Award.

    

    “BOARD”
means
      the Board of Directors of the Company.

    

    “CAUSE”
means
      any cause, as defined by applicable law, for the termination of a Participant’s
      employment with the Company or a Parent or Subsidiary of the
      Company.

    

    “CODE”
means
      the Internal Revenue Code of 1986, as amended.

    

    “COMPANY”
means
      Sub Surface Waste Management of Delaware, Inc., a Delaware corporation, or
      any
      successor corporation.

    

    “DISABILITY”
means
      a
      disability, whether temporary or permanent, partial or total, as determined
      by
      the Board.

    

    “EXCHANGE
      ACT”
means
      the Securities Exchange Act of 1934, as amended.

    

    “EXERCISE
      PRICE”
means
      the price at which a holder of an Option may purchase the Shares issuable upon
      exercise of the Option.

    

    “FAIR
      MARKET VALUE”
means,
      as of any date, the value of a share of the Company’s Common Stock determined as
      follows:

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              (a)

            	
              if
                such Common Stock is publicly traded and is then listed on a national
                securities exchange, its closing price on the date of determination
                on the
                principal national securities exchange on which the Common Stock
                is listed
                or admitted to trading as reported in The Wall Street
                Journal;

            

    

    

    
      	 	
              (b)

            	
              if
                such Common Stock is quoted on the NASDAQ National Market, its closing
                price on the NASDAQ National Market on the date of determination
                as
                reported in The Wall Street
                Journal;

            

    

    

    
      	 	
              (c)

            	
              if
                such Common Stock is publicly traded but is not listed or admitted
                to
                trading on a national securities exchange, the average of the closing
                bid
                and asked prices on the date of determination as reported by Bloomberg,
                L.P.;

            

    

    

    
      	 	
              (d)

            	
              in
                the case of an Award made on the Effective Date, the price per share
                at
                which shares of the Company’s Common Stock are initially offered for sale
                to the public by the Company’s underwriters in the initial public offering
                of the Company’s Common Stock pursuant to a registration statement filed
                with the SEC under the Securities Act;
                or

            

    

    

    
      	 	
              (e)

            	
              if
                none of the foregoing is applicable, by the Board in good
                faith.

            

    

    

    “INSIDER”
means
      an officer or director of the Company or any other person whose transactions
      in
      the Company’s Common Stock are subject to Section 16 of the Exchange
      Act.

    

    “OPTION”
means
      an award of an option to purchase Shares pursuant to Section 6.

    

    “PARENT”
means
      any corporation (other than the Company) in an unbroken chain of corporations
      ending with the Company if each of such corporations other than the Company
      owns
      stock possessing 50% or more of the total combined voting power of all classes
      of stock in one of the other corporations in such chain.

    

    “PARTICIPANT”
means
      a
      person who receives an Award under this Plan.

    

    “PERFORMANCE
      FACTORS”
means
      the factors selected by the Board, in its sole and absolute discretion, from
      among the following measures to determine whether the performance goals
      applicable to Awards have been satisfied:

    

    
      	 	 	
              (a)

            	
              Net
                revenue and/or net revenue growth;

            

    

    

    
      	 	 	
              (b)

            	
              Earnings
                before income taxes and amortization and/or earnings before income
                taxes
                and amortization growth;

            

    

    

    
      	 	 	
              (c)

            	
              Operating
                income and/or operating income
                growth;

            

    

    

    
      	 	 	
              (d)

            	
              Net
                income and/or net income growth;

            

    

    

    
      	 	 	
              (e)

            	
              Earnings
                per share and/or earnings per share
                growth;

            

    

    

    
      	 	 	
              (f)

            	
              Total
                stockholder return and/or total stockholder return
                growth;

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	 	
              (g)

            	
              Return
                on equity;

            

    

    

    
      	 	 	
              (h)

            	
              Operating
                cash flow return on income;

            

    

    

    
      	 	 	
              (i)

            	
              Adjusted
                operating cash flow return on
                income;

            

    

    

    
      	 	 	
              (j)

            	
              Economic
                value added; and

            

    

    

    
      	 	 	
              (k)

            	
              Individual
                confidential business objectives.

            

    

    

    “PERFORMANCE
      PERIOD”
means
      the period of service determined by the Board, not to exceed five years, during
      which years of service or performance is to be measured for Restricted Stock
      Awards or Stock Bonuses.

    

    “PLAN”
means
      this Sub Surface Waste Management of Delaware, Inc. 2007-I Employee Stock
      Incentive Plan, as amended from time to time.

    

    “RESTRICTED
      STOCK AWARD”
means
      an award of Shares pursuant to Section 7.

    

    “SEC”
means
      the Securities and Exchange Commission.

    

    “SECURITIES
      ACT”
means
      the Securities Act of 1933, as amended.

    

    “SHARES”
means
      shares of the Company’s Common Stock reserved for issuance under this Plan, as
      adjusted pursuant to Sections 3 and 19, and any successor security.

    

    “STOCK
      BONUS”
means
      an award of Shares, or cash in lieu of Shares, pursuant to Section
      8.

    

    “SUBSIDIARY”
means
      any corporation (other than the Company) in an unbroken chain of corporations
      beginning with the Company if each of the corporations other than the last
      corporation in the unbroken chain owns stock possessing 50% or more of the
      total
      combined voting power of all classes of stock in one of the other corporations
      in such chain.

    

    “TERMINATION”
or
      “TERMINATED”
means,
      for purposes of this Plan with respect to a Participant, that the Participant
      has for any reason ceased to provide services as an employee, officer, director,
      consultant, independent contractor, or advisor to the Company or a Parent or
      Subsidiary of the Company. An employee will not be deemed to have ceased to
      provide services in the case of (i) sick leave, (ii) military leave, or (iii)
      any other leave of absence approved by the Company, provided that such leave
      is
      for a period of not more than 90 days, unless reemployment upon the expiration
      of such leave is guaranteed by contract or statute or unless provided otherwise
      pursuant to a formal policy adopted from time to time by the Company and issued
      and promulgated to employees in writing. In the case of any employee on an
      approved leave of absence, the Board may make such provisions respecting
      suspension of vesting of the Award while on leave from the employ of the Company
      or a Subsidiary as it may deem appropriate, except that in no event may an
      Option be exercised after the expiration of the term set forth in the Option
      agreement. The Board will have sole discretion to determine whether a
      Participant has ceased to provide services and the effective date on which
      the
      Participant ceased to provide services (the “TERMINATION DATE”). 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “UNVESTED
      SHARES”
means
      “Unvested Shares” as defined in the Award Agreement.

    

    “VESTED
      SHARES”
means
      “Vested Shares” as defined in the Award Agreement.

    

    
      	3.	
              SHARES
                SUBJECT TO THE PLAN.

            

    

    

    3.1 Number
      of Shares Available.
      Subject
      to Sections 3.2 and 19, the total aggregate number of Shares reserved and
      available for grant and issuance pursuant to this Plan will be 20,000,000 plus
      Shares that are subject to: (a) issuance upon exercise of an Option but cease
      to
      be subject to such Option for any reason other than exercise of such Option;
      (b)
      an Award granted hereunder but forfeited or repurchased by the Company at the
      original issue price; and (c) an Award that otherwise terminates without Shares
      being issued. At all times the Company shall reserve and keep available a
      sufficient number of Shares as shall be required to satisfy the requirements
      of
      all outstanding Options granted under this Plan and all other outstanding but
      unvested Awards granted under this Plan.

    

    3.2 Adjustment
      of Shares.
      In the
      event that the number of outstanding shares is changed by a stock dividend,
      recapitalization, stock split, reverse stock split, subdivision, combination,
      reclassification or similar change in the capital structure of the Company
      without consideration, then (a) the number of Shares reserved for issuance
      under
      this Plan, (b) the Exercise Prices of and number of Shares subject to
      outstanding Options, and (c) the number of Shares subject to other outstanding
      Awards will be proportionately adjusted, subject to any required action by
      the
      Board or the stockholders of the Company and compliance with applicable
      securities laws; provided, however, that fractions of a Share will not be issued
      but will either be replaced by a cash payment equal to the Fair Market Value
      of
      such fraction of a Share or will be rounded up to the nearest whole Share,
      as
      determined by the Board.

    

    
      	4.	
              ELIGIBILITY.

            

    

    

    ISOs
      (as
      defined in Section 6 below) may be granted only to employees (including officers
      and directors who are also employees) of the Company or of a Parent or
      Subsidiary of the Company. All other Awards may be granted to employees,
      officers, directors, consultants, independent contractors and advisors of the
      Company or any Parent or Subsidiary of the Company; provided such consultants,
      contractors and advisors render bona fide services not in connection with the
      offer and sale of securities in a capital-raising transaction. 

    

    
      	5.	
              ADMINISTRATION.

            

    

    

    5.1 Board
      Authority.
      This
      Plan will be administered by the Board. Subject to the general purposes, terms
      and conditions of this Plan, the Board will have full power to implement and
      carry out this Plan. Without limitation, the Board will have the authority
      to:

    

    
      	 	
              (a)

            	 	
              construe
                and interpret this Plan, any Award Agreement and any other agreement
                or
                document executed pursuant to this
                Plan;

            

    

    

    
      	 	
              (b)

            	
              prescribe,
                amend and rescind rules and regulations relating to this Plan or
                any
                Award;

            

    

    

    
      	 	
              (c)

            	
              select
                persons to receive Awards;

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	 	
              (d)

            	
              determine
                the form and terms of Awards;

            

    

    

    
      	 	
              (e)

            	
              determine
                the number of Shares or other consideration subject to
                Awards;

            

    

    

    
      	 	
              (f)

            	
              determine
                whether Awards will be granted singly, in combination with, in tandem
                with, in replacement of, or as alternatives to, other Awards under
                this
                Plan or any other incentive or compensation plan of the Company or
                any
                Parent or Subsidiary of the
                Company;

            

    

    

    
      	 	
              (g)

            	
              grant
                waivers of Plan or Award
                conditions;

            

    

    

    
      	 	
              (h)

            	
              determine
                the vesting, ability to exercise and payment of
                Awards;

            

    

    

    
      	 	
              (i)

            	
              correct
                any defect, supply any omission or reconcile any inconsistency in
                this
                Plan, any Award or any Award
                Agreement;

            

    

    

    
      	 	
              (j)

            	
              determine
                whether an Award has been earned;
                and

            

    

    

    
      	 	
              (k)

            	
              make
                all other determinations necessary or advisable for the administration
                of
                this Plan.

            

    

    

    5.2 Board
      Discretion.
      Any
      determination made by the Board with respect to any Award will be made at the
      time of grant of the Award or, unless in contravention of any express term
      of
      this Plan or Award, at any later time, and such determination will be final
      and
      binding on the Company and on all persons having an interest in any Award under
      this Plan. The Board may delegate to one or more officers of the Company the
      authority to grant an Award under this Plan to Participants who are not Insiders
      of the Company.

    

    
      	6.	
              OPTIONS.

            

    

    

     The
      Board
      may grant Options to eligible persons and will determine whether such Options
      will be Incentive Stock Options within the meaning of the Code (“ISO”) or
      Nonqualified Stock Options (“NQSOS”), the number of Shares subject to the
      Option, the Exercise Price of the Option, the period during which the Option
      may
      be exercised, and all other terms and conditions of the Option, subject to
      the
      following:

    

    6.1 Form
      of Option Grant.
      Each
      Option granted under this Plan will be evidenced by an Award Agreement that
      will
      expressly identify the Option as an ISO or an NQSO (hereinafter referred to
      as
      the “STOCK OPTION AGREEMENT”), and will be in such form and contain such
      provisions (which need not be the same for each Participant) as the Board may
      from time to time approve, and which will comply with and be subject to the
      terms and conditions of this Plan.

    

    6.2 Date
      of Grant.
      The
      date of grant of an Option will be the date on which the Board makes the
      determination to grant such Option, unless otherwise specified by the Board.
      The
      Stock Option Agreement and a copy of this Plan will be delivered to the
      Participant within a reasonable time after the granting of the
      Option.

    

    6.3 Exercise
      Period.
      Options
      may be exercisable within the times or upon the events determined by the Board
      as set forth in the Stock Option Agreement governing such Option; provided,
      however, that no Option will be exercisable after the expiration of ten (10)
      years from the date the Option is granted; and provided further that no ISO
      granted to a person who directly or by attribution owns more than ten percent
      (10%) of the total combined voting power of all classes of stock of the Company
      or of any Parent or Subsidiary of the Company (“TEN PERCENT STOCKHOLDER”) will
      be exercisable after the expiration of five (5) years from the date the ISO
      is
      granted. The Board also may provide for Options to become exercisable at one
      time or from time to time, periodically or otherwise, in such number of Shares
      or percentage of Shares as the Board determines.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.4 Exercise
      Price.
      The
      Exercise Price of an Option will be determined by the Board when the Option
      is
      granted and may be not less than 85% of the Fair Market Value of the Shares
      on
      the date of grant; provided that: (a) the Exercise Price of an ISO will be
      not
      less than 100% of the Fair Market Value of the Shares on the date of grant;
      and
      (b) the Exercise Price of any ISO granted to a Ten Percent Stockholder will
      not
      be less than 110% of the Fair Market Value of the Shares on the date of grant.
      Payment for the Shares purchased may be made in accordance with Section 9 of
      this Plan.

    

    6.5 Method
      of Exercise.
      Options
      may be exercised only by delivery to the Company of a written stock option
      exercise agreement (the “EXERCISE AGREEMENT”) in a form approved by the Board,
      (which need not be the same for each Participant), stating the number of Shares
      being purchased, the restrictions imposed on the Shares purchased under such
      Exercise Agreement, if any, and such representations and agreements regarding
      Participant’s investment intent and access to information and other matters, if
      any, as may be required or desirable by the Company to comply with applicable
      securities laws, together with payment in full of the Exercise Price for the
      number of Shares being purchased.

    

    6.6 Termination.
      Notwithstanding the exercise periods set forth in the Stock Option Agreement,
      exercise of an Option will always be subject to the following:

    

    (a) If
      the
      Participant’s service is Terminated for any reason except death or Disability,
      then the Participant may exercise such Participant’s Options only to the extent
      that such Options would have been exercisable upon the Termination Date no
      later
      than three (3) months after the Termination Date (or such shorter or longer
      time
      period not exceeding five (5) years as may be determined by the Board, with
      any
      exercise beyond three (3) months after the Termination Date deemed to be an
      NQSO), but in any event, no later than the expiration date of the
      Options.

    

    (b) If
      the
      Participant’s service is Terminated because of Participant’s death or Disability
      (or the Participant dies within three (3) months after a Termination other
      than
      for Cause or because of Participant’s Disability), then Participant’s Options
      may be exercised only to the extent that such Options would have been
      exercisable by Participant on the Termination Date and must be exercised by
      Participant (or Participant’s legal representative or authorized assignee) no
      later than twelve (12) months after the Termination Date (or such shorter or
      longer time period not exceeding five (5) years as may be determined by the
      Board, with any such exercise beyond (i) three (3) months after the Termination
      Date when the Termination is for any reason other than the Participant’s death
      or Disability, or (ii) twelve (12) months after the Termination Date when the
      Termination is for Participant’s death or Disability, deemed to be an NQSO), but
      in any event no later than the expiration date of the Options.

    

    (c) Notwithstanding
      the provisions in paragraph 6.6(a) above, if a Participant’s service is
      Terminated for Cause, neither the Participant, the Participant’s estate nor such
      other person who may then hold the Option shall be entitled to exercise any
      Option with respect to any Shares whatsoever, after Termination, whether or
      not
      after Termination the Participant may receive payment from the Company or
      Subsidiary for vacation pay, for services rendered prior to Termination, for
      services rendered for the day on which Termination occurs, for salary in lieu
      of
      notice, or for any other benefits. For the purpose of this paragraph,
      Termination shall be deemed to occur on the date when the Company dispatches
      notice or advice to the Participant that his service is Terminated.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.7 Limitations
      on Exercise.
      The
      Board may specify a reasonable minimum number of Shares that may be purchased
      on
      any exercise of an Option, provided that such minimum number will not prevent
      Participant from exercising the Option for the full number of Shares for which
      it is then exercisable.

    

    6.8 Limitations
      on ISO.
      The
      aggregate Fair Market Value (determined as of the date of grant) of Shares
      with
      respect to which ISO are exercisable for the first time by a Participant during
      any calendar year (under this Plan or under any other incentive stock option
      plan of the Company, Parent or Subsidiary of the Company) will not exceed
      $100,000. If the Fair Market Value of Shares on the date of grant with respect
      to which ISO are exercisable for the first time by a Participant during any
      calendar year exceeds $100,000, then the Options for the first $100,000 worth
      of
      Shares to become exercisable in such calendar year will be ISO and the Options
      for the amount in excess of $100,000 that become exercisable in that calendar
      year will be NQSOs. In the event that the Code or the regulations promulgated
      thereunder are amended after the Effective Date of this Plan to provide for
      a
      different limit on the Fair Market Value of Shares permitted to be subject
      to
      ISO, such different limit will be automatically incorporated herein and will
      apply to any Options granted after the effective date of such
      amendment.

    

    6.9 Modification,
      Extension or Renewal.
      The
      Board may modify, extend or renew outstanding Options and authorize the grant
      of
      new Options in substitution therefor, provided that any such action may not,
      without the written consent of a Participant, impair any of such Participant’s
      rights under any Option previously granted. Any outstanding ISO that is
      modified, extended, renewed or otherwise altered will be treated in accordance
      with Section 424(h) of the Code. The Board may reduce the Exercise Price of
      outstanding Options without the consent of Participants affected by a written
      notice to them; provided, however, that the Exercise Price may not be reduced
      below the minimum Exercise Price that would be permitted under Section 6.4
      of
      this Plan for Options granted on the date the action is taken to reduce the
      Exercise Price.

    

    6.10 No
      Disqualification.
      Notwithstanding any other provision in this Plan, no term of this Plan relating
      to ISO will be interpreted, amended or altered, nor will any discretion or
      authority granted under this Plan be exercised, so as to disqualify this Plan
      under Section 422 of the Code or, without the consent of the Participant
      affected, to disqualify any ISO under Section 422 of the Code.

    

    
      	7.	
              RESTRICTED
                STOCK.

            

    

    

    A
      Restricted Stock Award is an offer by the Company to sell to an eligible person
      Shares that are subject to restrictions. The Board will determine to whom an
      offer will be made, the number of Shares the person may purchase, the price
      to
      be paid (the “PURCHASE PRICE”), the restrictions to which the Shares will be
      subject, and all other terms and conditions of the Restricted Stock Award,
      subject to the following:

    

    7.1 Form
      of Restricted Stock Award.
      All
      purchases under a Restricted Stock Award made pursuant to this Plan will be
      evidenced by an Award Agreement (the “RESTRICTED STOCK PURCHASE AGREEMENT”) that
      will be in such form (which need not be the same for each Participant) as the
      Board will from time to time approve, and will comply with and be subject to
      the
      terms and conditions of this Plan. The offer of Restricted Stock will be
      accepted by the Participant’s execution and delivery of the Restricted Stock
      Purchase Agreement and full payment for the Shares to the Company within thirty
      (30) days from the date the Restricted Stock Purchase Agreement is delivered
      to
      the person. If such person does not execute and deliver the Restricted Stock
      Purchase Agreement along with full payment for the Shares to the Company within
      thirty (30) days, then the offer will terminate, unless otherwise extended
      by
      the Board.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.2 Purchase
      Price.
      The
      Purchase Price of Shares sold pursuant to a Restricted Stock Award will be
      determined by the Board on the date the Restricted Stock Award is granted,
      except in the case of a sale to a Ten Percent Stockholder, in which case the
      Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase
      Price must be made in accordance with Section 9 of this Plan.

    

    7.3 Terms
      of Restricted Stock Awards.
      Restricted Stock Awards shall be subject to such restrictions as the Board
      may
      impose. These restrictions may be based upon completion of a specified number
      of
      years of service with the Company or upon completion of the performance goals
      as
      set out in advance in the Participant’s individual Restricted Stock Purchase
      Agreement. Restricted Stock Awards may vary from Participant to Participant
      and
      between groups of Participants. Prior to the grant of a Restricted Stock Award,
      the Board shall: (a) determine the nature, length and starting date of any
      Performance Period for the Restricted Stock Award; (b) select from among the
      Performance Factors to be used to measure performance goals, if any; and (c)
      determine the number of Shares that may be awarded to the Participant Prior
      to
      the payment of any Restricted Stock Award, the Board shall determine the extent
      to which such Restricted Stock Award has been earned. Performance Periods may
      overlap and Participants may participate simultaneously with respect to
      Restricted Stock Awards that are subject to different Performance Periods and
      have different performance goals and other criteria.

    

    7.4 Termination
      During Performance Period.
      If a
      Participant is Terminated during a Performance Period for any reason, then
      such
      Participant will be entitled to payment (whether in Shares, cash or otherwise)
      with respect to the Restricted Stock Award only to the extent earned as of
      the
      date of Termination in accordance with the Restricted Stock Purchase Agreement,
      unless the Board determines otherwise.

    

    
      	8.	
              STOCK
                BONUSES.

            

    

    

    8.1 Awards
      of Stock Bonuses.
      A Stock
      Bonus is an award of Shares (which may consist of Restricted Stock) for
      extraordinary services rendered to the Company or any Parent or Subsidiary
      of
      the Company. A Stock Bonus will be awarded pursuant to an Award Agreement (the
      “STOCK BONUS AGREEMENT”) that will be in such form (which need not be the same
      for each Participant) as the Board will from time to time approve, and will
      comply with and be subject to the terms and conditions of this Plan. A Stock
      Bonus may be awarded upon satisfaction of such performance goals as are set
      out
      in advance in the Participant’s individual Award Agreement (the “PERFORMANCE
      STOCK BONUS AGREEMENT”) that will be in such form (which need not be the same
      for each Participant) as the Board will from time to time approve, and will
      comply with and be subject to the terms and conditions of this Plan. Stock
      Bonuses may vary from Participant to Participant and between groups of
      Participants, and may be based upon the achievement of the Company, Parent
      or
      Subsidiary and/or individual performance factors or upon such other criteria
      as
      the Board may determine.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8.2 Terms
      of Stock Bonuses.
      The
      Board will determine the number of Shares to be awarded to the Participant.
      If
      the Stock Bonus is being earned upon the satisfaction of performance goals
      pursuant to a Performance Stock Bonus Agreement, then the Board will: (a)
      determine the nature, length and starting date of any Performance Period for
      each Stock Bonus; (b) select from among the Performance Factors to be used
      to
      measure the performance, if any; and (c) determine the number of Shares that
      may
      be awarded to the Participant. Prior to the payment of any Stock Bonus, the
      Board shall determine the extent to which such Stock Bonuses have been earned.
      Performance Periods may overlap and Participants may participate simultaneously
      with respect to Stock Bonuses that are subject to different Performance Periods
      and different performance goals and other criteria. The number of Shares may
      be
      fixed or may vary in accordance with such performance goals and criteria as
      may
      be determined by the Board. The Board may adjust the performance goals
      applicable to the Stock Bonuses to take into account changes in law and
      accounting or tax rules and to make such adjustments as the Board deems
      necessary or appropriate to reflect the impact of extraordinary or unusual
      items, events or circumstances to avoid windfalls or hardships.

    

    8.3 Form
      of Payment.
      The
      earned portion of a Stock Bonus may be paid to the Participant by the Company
      either currently or on a deferred basis, with such interest or dividend
      equivalent, if any, as the Board may determine. Payment may be made in the
      form
      of cash or whole Shares or a combination thereof, either in a lump sum payment
      or in installments, all as the Board will determine.

    

    
      	9.	
              PAYMENT
                FOR SHARE PURCHASES.

            

    

    

    9.1 Payment.
      Payment
      for Shares purchased pursuant to this Plan may be made in cash (by check) or,
      where expressly approved for the Participant by the Board and where permitted
      by
      law:   

    

    
      	 	(a)	by
              cancellation of indebtedness of the Company to the
              Participant;

      	 	 	 

      	 	
              (b)

            	
              by
                surrender of shares that either: (1) have been owned by Participant
                for
                more than one year and have been paid for within the meaning of Rule
                144
                of the Securities Act of 1933 (and, if such shares were purchased
                from the
                Company by use of a promissory note, such note has been fully paid
                with
                respect to such shares); or (2) were obtained by Participant in the
                public
                market;

            

    

    

    
      	 	
               

            	
              (c)

            	
              by
                waiver of compensation due or accrued to the Participant for services
                rendered;

            

      	 	 	 	 

      	 	 	(d)	with
              respect only to purchases upon exercise of an Option, and provided
              that a
              public market for the Company’s stock
              exists:

    

     

    
      	
               

            	
              (1)

            	
              through
                a “same day sale” commitment from the Participant and a broker-dealer that
                is a member of the National Association of Securities Dealers (an
“NASD
                DEALER”) whereby the Participant irrevocably elects to exercise the Option
                and to sell a portion of the Shares so purchased to pay for the Exercise
                Price, and whereby the NASD Dealer irrevocably commits upon receipt
                of
                such Shares to forward the Exercise Price directly to the Company;
                or

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (2)

            	
              through
                a “margin” commitment from the Participant and a NASD Dealer whereby the
                Participant irrevocably elects to exercise the Option and to pledge
                the
                Shares so purchased to the NASD Dealer in a margin account as security
                for
                a loan from the NASD Dealer in the amount of the Exercise Price,
                and
                whereby the NASD Dealer irrevocably commits upon receipt of such
                Shares to
                forward the Exercise Price directly to the Company;
                or

            

    

    

    
      	
            	(e)	
              by
                any combination of the foregoing.

            

    

    

    
      	10.	
              WITHHOLDING
                TAXES.

            

    

    

    10.1 Withholding
      Generally.
      Whenever Shares are to be issued in satisfaction of Awards granted under this
      Plan, the Company may require the Participant to remit to the Company an amount
      sufficient to satisfy federal, state and local withholding tax requirements
      prior to the delivery of any certificate or certificates for such Shares.
      Whenever, under this Plan, payments in satisfaction of Awards are to be made
      in
      cash, such payment will be net of an amount sufficient to satisfy federal,
      state, and local withholding tax requirements.

    

    10.2 Stock
      Withholding.
      When,
      under applicable tax laws, a participant incurs tax liability in connection
      with
      the exercise or vesting of any Award that is subject to tax withholding and
      the
      Participant is obligated to pay the Company the amount required to be withheld,
      the Board may allow the Participant to satisfy the minimum withholding tax
      obligation by electing to have the Company withhold from the Shares to be issued
      that number of Shares having a Fair Market Value equal to the minimum amount
      required to be withheld, determined 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 will be made in accordance with the requirements
      established by the Board and be in writing in a form acceptable to the
      Board.

    

    
      	11.	
              PRIVILEGES
                OF STOCK OWNERSHIP.

            

    

    

    11.1 Voting
      and Dividends.
      No
      Participant will have any of the rights of a stockholder with respect to any
      Shares until the Shares are issued to the Participant. After Shares are issued
      to the Participant, the Participant will be a stockholder and will have all
      the
      rights of a stockholder with respect to such Shares, including the right to
      vote
      and receive all dividends or other distributions made or paid with respect
      to
      such Shares; provided, that if such Shares are Restricted Stock, then any new,
      additional or different securities the Participant may become entitled to
      receive with respect to such Shares by virtue of a stock dividend, stock split
      or any other change in the corporate or capital structure of the Company will
      be
      subject to the same restrictions as the Restricted Stock; provided, further,
      that the Participant will have no right to retain such stock dividends or stock
      distributions with respect to Shares that are repurchased at the Participant’s
      Purchase Price or Exercise Price pursuant to Section 12.

    

    11.2 Financial
      Statements.
      Pursuant to regulation 260.140.46 of the Rules of the California Corporations
      Commissioner, the Company will provide financial statements to each Participant
      prior to such Participant’s purchase of Shares under this Plan, and to each
      Participant annually during the period such Participant has Awards outstanding;
      provided, however, the Company will not be required to provide such financial
      statements to Participants whose services in connection with the Company assure
      them access to equivalent information.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	12.	
              TRANSFERABILITY.

            

    

    

    Awards
      granted under this Plan, and any interest therein, will not be transferable
      or
      assignable by Participant, and may not be made subject to execution, attachment
      or similar process, other than by will or by the laws of descent and
      distribution. During the lifetime of the Participant an Award will be
      exercisable only by the Participant. During the lifetime of the Participant,
      any
      elections with respect to an Award may be made only by the Participant unless
      otherwise determined by the Board and set forth in the Award Agreement with
      respect to Awards that are not ISOs.

    

    
      	13.	
              RESTRICTIONS
                ON SHARES.

            

    

    

    At
      the
      discretion of the Board, the Company may reserve to itself and/or its
      assignee(s) in the Award Agreement a right to repurchase a portion of or all
      Unvested Shares held by a Participant following such Participant’s Termination
      at any time within ninety (90) days after the later of (a) Participant’s
      Termination Date, or (b) the date Participant purchases Shares under this Plan.
      Such repurchase by the Company shall be for cash and/or cancellation of purchase
      money indebtedness, and the price per share shall be the Participant’s Exercise
      Price or the Purchase Price, as applicable.

    

    
      	14.	
              CERTIFICATES.

            

    

    

    All
      certificates for Shares or other securities delivered under this Plan will
      be
      subject to such stock transfer orders, legends and other restrictions as the
      Board may deem necessary or advisable, including restrictions under any
      applicable federal, state or foreign securities law, or any rules, regulations
      and other requirements of the SEC or any stock exchange or automated quotation
      system upon which the Shares may be listed or quoted.

    

    
      	15.	
              ESCROW;
                PLEDGE OF SHARES.

            

    

    

    To
      enforce any restrictions on a Participant’s Shares, the Board may require the
      Participant to deposit all certificates representing Shares, together with
      stock
      powers or other instruments of transfer approved by the Board appropriately
      endorsed in blank, with the Company or an agent designated by the Company to
      hold in escrow until such restrictions have lapsed or terminated, and the Board
      may cause a legend or legends referencing such restrictions to be placed on
      the
      certificates. Any Participant who is permitted to execute a promissory note
      as
      partial or full consideration for the purchase of Shares under this Plan will
      be
      required to pledge and deposit with the Company all or part of the Shares so
      purchased as collateral to secure the payment of Participant’s obligation to the
      Company under the promissory note; provided, however, that the Board may require
      or accept other or additional forms of collateral to secure the payment of
      such
      obligation and, in any event, the Company will have full recourse against the
      Participant under the promissory note notwithstanding any pledge of the
      Participant’s Shares or other collateral. In connection with any pledge of the
      Shares, Participant will be required to execute and deliver a written pledge
      agreement in such form as the Board will from time to time approve. The Shares
      purchased with the promissory note may be released from the pledge on a pro
      rata
      basis as the promissory note is paid.

    

    
      	16.	
              EXCHANGE
                AND BUYOUT OF AWARDS.

            

    

    

    The
      Board
      may, at any time or from time to time, authorize the Company, with the consent
      of the respective Participants, to issue new Awards in exchange for the
      surrender and cancellation of any or all outstanding Awards. The Board may
      at
      any time buy from a Participant an Award previously granted with payment in
      cash, Shares (including Restricted Stock) or other consideration, based on
      such
      terms and conditions as the Board and the Participant may agree.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	17.	
              SECURITIES
                LAW AND OTHER REGULATORY
                COMPLIANCE.

            

    

    

    An
      Award
      will not be effective unless such Award is in compliance with all applicable
      federal and state securities laws, rules and regulations of any governmental
      body, and the requirements of any stock exchange or automated quotation system
      upon which the Shares may then be listed or quoted, as they are in effect on
      the
      date of grant of the Award and also on the date of exercise or other issuance.
      Notwithstanding any other provision in this Plan, the Company will have no
      obligation to issue or deliver certificates for Shares under this Plan prior
      to:
      (a) obtaining any approvals from governmental agencies that the Company
      determines are necessary or advisable; and/or (b) completion of any registration
      or other qualification of such Shares under any state or federal law or ruling
      of any governmental body that the Company determines to be necessary or
      advisable. The Company will be under no obligation to register the Shares with
      the SEC or to effect compliance with the registration, qualification or listing
      requirements of any state securities laws, stock exchange or automated quotation
      system, and the Company will have no liability for any inability or failure
      to
      do so.

    

    
      	18.	
              NO
                OBLIGATION TO EMPLOY.

            

    

    

    Nothing
      in this Plan or any Award granted under this Plan will confer or be deemed
      to
      confer on any Participant any right to continue in the employ of, or to continue
      any other relationship with, the Company or any Parent or Subsidiary of the
      Company or limit in any way the right of the Company or any Parent or Subsidiary
      of the Company to terminate Participant’s employment or other relationship at
      any time, with or without cause.

    

    
      	19.	
              CORPORATE
                TRANSACTIONS.

            

    

    

    19.1 Assumption
      or Replacement of Awards by Successor.
      In the
      event of (a) a dissolution or liquidation of the Company, (b) a merger or
      consolidation in which the Company is not the surviving corporation (other
      than
      a merger or consolidation with a wholly-owned subsidiary, a reincorporation
      of
      the Company in a different jurisdiction, or other transaction in which there
      is
      no substantial change in the stockholders of the Company or their relative
      stock
      holdings and the Awards granted under this Plan are assumed, converted or
      replaced by the successor corporation, which assumption will be binding on
      all
      Participants), (c) a merger in which the Company is the surviving corporation
      but after which the stockholders of the Company immediately prior to such merger
      (other than any stockholder that merges, or which owns or controls another
      corporation that merges, with the Company in such merger) cease to own their
      shares or other equity interest in the Company, (d) the sale of substantially
      all of the assets of the Company, or (e) the acquisition, sale, or transfer
      of
      more than 50% of the outstanding shares of the Company by tender offer or
      similar transaction, any or all outstanding Awards may be assumed, converted
      or
      replaced by the successor corporation (if any), which assumption, conversion
      or
      replacement will be binding on all Participants. In the alternative, the
      successor corporation may substitute equivalent Awards or provide substantially
      similar consideration to Participants as was provided to stockholders (after
      taking into account the existing provisions of the Awards). The successor
      corporation may also issue, in place of outstanding Shares of the Company held
      by the Participant, substantially similar shares or other property subject
      to
      repurchase restrictions no less favorable to the Participant. In the event
      such
      successor corporation (if any) refuses to assume or substitute Awards, as
      provided above, pursuant to a transaction described in this Subsection 19.1,
      such Awards will expire on such transaction at such time and on such conditions
      as the Board will determine. Notwithstanding anything in this Plan to the
      contrary, the Board may provide that the vesting of any or all Awards granted
      pursuant to this Plan will accelerate upon a transaction described in this
      Section 19. If the Board exercises such discretion with respect to Options,
      such
      Options will become exercisable in full prior to the consummation of such event
      at such time and on such conditions as the Board determines, and if such Options
      are not exercised prior to the consummation of the corporate transaction, they
      shall terminate at such time as determined by the Board.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    19.2 Other
      Treatment of Awards.
      Subject
      to any greater rights granted to Participants under the foregoing provisions
      of
      this Section 19, in the event of the occurrence of any transaction described
      in
      Section 19.1, any outstanding Awards will be treated as provided in the
      applicable agreement or plan of merger, consolidation, dissolution, liquidation,
      or sale of assets.

    

    19.3 Assumption
      of Awards by the Company.
      The
      Company, from time to time, also may substitute or assume outstanding awards
      granted by another company, whether in connection with an acquisition of such
      other company or otherwise, by either: (a) granting an Award under this Plan
      in
      substitution of such other company’s award; or (b) assuming such award as if it
      had been granted under this Plan if the terms of such assumed award could be
      applied to an Award granted under this Plan. Such substitution or assumption
      will be permissible if the holder of the substituted or assumed award would
      have
      been eligible to be granted an Award under this Plan if the other company had
      applied the rules of this Plan to such grant. In the event the Company assumes
      an award granted by another company, the terms and conditions of such award
      will
      remain unchanged (except that the exercise price and the number and nature
      of
      Shares issuable upon exercise of any such option will be adjusted appropriately
      pursuant to Section 424(a) of the Code). In the event the Company elects to
      grant a new Option rather than assuming an existing option, such new Option
      may
      be granted with a similarly adjusted Exercise Price.

    

    
      	20.	
              ADOPTION
                AND STOCKHOLDER APPROVAL.

            

    

    

    This
      Plan
      will become effective on the date on which it is adopted by the Board (the
      “Effective Date”). Upon the Effective Date, the Board may grant Awards pursuant
      to this Plan. The Company intends to seek stockholder approval of the Plan
      within twelve (12) months after the date this Plan is adopted by the Board;
      provided, however, if the Company fails to obtain stockholder approval of the
      Plan during such 12-month period, pursuant to Section 422 of the Code, any
      Option granted as an ISO at any time under the Plan will not qualify as an
      ISO
      within the meaning of the Code and will be deemed to be an NQSO.

    

    
      	21.	
              TERM
                OF PLAN/GOVERNING LAW.

            

    

    

    Unless
      earlier terminated as provided herein, this Plan will terminate ten (10) years
      from the date this Plan is adopted by the Board or, if earlier, the date of
      stockholder approval. This Plan and all agreements there under shall be governed
      by and construed in accordance with the laws of the State of
      California.

    

    
      	22.	
              AMENDMENT
                OR TERMINATION OF PLAN.

            

    

    

    The
      Board
      may at any time terminate or amend this Plan in any respect, including without
      limitation amendment of any form of Award Agreement or instrument to be executed
      pursuant to this Plan; provided, however, that the Board will not, without
      the
      approval of the stockholders of the Company, amend this Plan in any manner
      that
      requires such stockholder approval.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	23.	
              NONEXCLUSIVITY
                OF THE PLAN.

            

    

    

    Neither
      the adoption of this Plan by the Board, the submission of this Plan to the
      stockholders of the Company for approval, nor any provision of this Plan will
      be
      construed as creating any limitations on the power of the Board to adopt such
      additional compensation arrangements as it may deem desirable, including,
      without limitation, the granting of stock options and bonuses otherwise than
      under this Plan, and such arrangements may be either generally applicable or
      applicable only in specific cases.

    

    
      	24.	
              ACTION
                BY BOARD.

            

    

    

    Any
      action permitted or required to be taken by the Board or any decision or
      determination permitted or required to be made by the Board pursuant to this
      Plan shall be taken or made in the Board’s sole and absolute
      discretion.

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