Document:

ex10_19.htm

    Exhibit
      10.19

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES
      NOR ANY INTEREST
      THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS
      (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE 1933
      ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) PURSUANT TO AN EXEMPTION
      FROM REGISTRATION UNDER THE 1933 ACT.

     

    IN
      ADDITION, A COMMON STOCK PURCHASE AGREEMENT DATED AS OF MAY 17 , 2007 (THE
      “PURCHASE AGREEMENT”), A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS
      PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS BETWEEN
      THE
      PARTIES WITH RESPECT TO THIS WARRANT.

    

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

    

    Red
      Reef Laboratories International, Inc.

    

    COMMON
      STOCK PURCHASE WARRANT “A”

    

    Number
      of
      Shares:  20,000,000                                       Holder:
      T Squared Capital LLC

    Managing
      Member

    Original
      Issue Date:  May 17,
      2007                                 Attn:
      Thomas M. Sauve

    1325
      Sixth Avenue, Floor
      28

    Expiration
      Date:  May 17,
      2012                                      New
      York NY 10019

    tel
      212-763-8616

    Exercise
      Price per
      Share:  $0.013

    

    Red
      Reef
      Laboratories International, Inc., a company organized and existing under the
      laws of the State of Florida (the “Company”), hereby
      certifies that, for value received, T Squared Capital LLC, or
      its registered assigns (the “Warrant Holder”), is
      entitled, subject to the terms set forth below, to purchase from the Company
      up
      to Twenty Million (20,000,000) shares (as adjusted from time to time as provided
      in Section 10, the “Warrant Shares”) of common stock,
      $.001 par value (the “Common Stock”), of the Company at
      a price of One and One-Third Cents ($0.013) per Warrant Share (as adjusted
      from
      time to time as provided in Section 10, the “Exercise
      Price”), at any time and from time to time from and after the date
      thereof and through and including 5:00 p.m. New York City time on May 17, 2012
      (or eighteen months of effectiveness of a Registration Statement subsequent
      to
      the issuance hereof (such eighteen months to be extended by one month for each
      month or portion of a month during which a Registration Statement’s
      effectiveness has lapsed or been suspended), whichever is longer) (the
“Expiration Date”), and subject to the following terms and
      conditions:

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    1.  Right
      To Include (“Piggy-Back”) Registrable Securities. Provided that the
      Registrable Securities have not been registered, if at any time after the date
      hereof but before the second anniversary of the date hereof, the Company
      proposes to register any of its securities under the 1933 Act (other than by
      a
      registration in connection with an acquisition in a manner which would not
      permit registration of Registrable Securities for sale to the public, on Form
      S-8, or any successor form thereto, on Form S-4, or any successor form thereto),
      on an underwritten basis (either best-efforts or firm-commitment), then, the
      Company will each such time give prompt written notice to all holders of
      Registrable Securities of its intention to do so and of such holders of
      Registrable Securities' rights under this Section 1. Upon the written request
      of
      any such holders of Registrable Securities made within ten (10) days after
      the
      receipt of any such notice (which request shall specify the Registrable
      Securities intended to be disposed of by such holders of Registrable Securities
      and the intended method of disposition thereof), the Company will, subject
      to
      the terms of this Agreement, use its commercially reasonable best efforts to
      effect the registration under the 1933 Act of the Registrable Securities, to
      the
      extent requisite to permit the disposition (in accordance with the intended
      methods thereof as aforesaid) of such Registrable Securities so to be
      registered, by inclusion of such Registrable Securities in the registration
      statement which covers the securities which the Company proposes to register,
      provided that if, at any time after written notice of its intention to register
      any securities and prior to the effective date of the registration statement
      filed in connection with such registration, the Company shall determine for
      any
      reason either not to register or to delay registration of such securities,
      the
      Company may, at its election, give written notice of such determination to
      each
      holders of Registrable Securities and, thereupon, (i) in the case of
      a  determination not to register, shall be relieved of this obligation
      to register any Registrable Securities in connection with such registration
      (but
      not from its obligation to pay the Registration Expenses in connection
      therewith), without prejudice, however, to the rights of any holder or holders
      of Registrable Securities entitled to do so to request that such registration
      be
      effected as a registration, and (ii) in the case of a determination to delay
      registering, shall be permitted to delay registering any Registrable Securities,
      for the same period as the delay in registering such other securities. No
      registration effected under this Section 1 shall relieve the Company of its
      obligation to effect any registration upon request under Section 1. The Company
      will pay all Registration Expenses in connection with each registration of
      Registrable Securities requested pursuant to this Section 1. The right provided
      the Holders of the Registrable Securities pursuant to this Section shall be
      exercisable at their sole discretion and will in no way limit any of the
      Company's obligations to pay the Securities according to their
      terms.

     

    2.  Priority
      In Incidental Registrations. If the managing underwriter of the
      underwritten offering contemplated by this Section 1 and 2 shall inform the
      Company and holders of the Registrable Securities requesting such registration
      by letter of its belief that the number of securities requested to be included
      in such registration exceeds the number which can be sold in such offering,
      then
      the Company will include in such registration, to the extent of the number
      which
      the Company is so advised can be sold in such offering, (i) first securities
      proposed by the Company to be sold for its own account, and (ii) second
      Registrable Securities and (iii) securities of other selling security holders
      requested to be included in such registration.

     

    3.  Registration
      of Warrant. The Company shall register this
      Warrant upon records to be maintained by the Company for that purpose (the
      “Warrant Register”), in the name of the record Warrant Holder hereof from time
      to time.  The Company may deem and treat the registered Warrant Holder
      of this Warrant as the absolute owner hereof for the purpose of any exercise
      hereof or any distribution to the Warrant Holder, and for all other purposes,
      and the Company shall not be affected by notice to the contrary.

     

    4.  Warrant
      Vesting.  At the Closing Date, Twenty Million
      (20,000,000) Warrant Shares in Common Stock Purchase Warrant “A” will vest
      immediately to the Warrant Holder.  The Warrant Shares in Common Stock
      Purchase Warrant “B”, “C”, “D”,  and “E” will continue to vest to the
      Warrant Holder in a manner such that there shall no be more than Twenty Million
      (20,000,000) Warrant Shares vested at any point in time. The lowest priced
      Warrant Shares shall vest prior to the vesting of higher-priced Warrant
      Shares.

     

    The
      Warrant Vesting schedule outlined herein will not preclude all Warrant Shares
      in
      Common Stock Purchase Warrant “A”, “B”, “C”, “D”,  and “E” from the
      registration requirements under the terms provided within the Common Stock
      Purchase Agreement and the Common Stock Purchase Warrant “A”, “B”, “C”,
“D”,  and “E” Agreements.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    5.  Investment
      Representation.  The Warrant Holder by
      accepting this Warrant represents that the Warrant Holder is acquiring this
      Warrant for its own account or the account of an affiliate for investment
      purposes and not with the view to any offering or distribution and that the
      Warrant Holder will not sell or otherwise dispose of this Warrant or the
      underlying Warrant Shares in violation of applicable securities
      laws.  The Warrant Holder acknowledges that the certificates
      representing any Warrant Shares will bear a legend indicating that they have
      not
      been registered under the United States Securities Act of 1933, as amended
      (the
“1933 Act”) and may not be sold by the Warrant Holder
      except pursuant to an effective registration statement or pursuant to an
      exemption from registration requirements of the 1933 Act and in accordance
      with
      federal and state securities laws.  If this Warrant was acquired by
      the Warrant Holder pursuant to the exemption from the registration requirements
      of the 1933 Act afforded by Regulation S thereunder, the Warrant Holder
      acknowledges and covenants that this Warrant may not be exercised by or on
      behalf of a Person during the one year distribution compliance period (as
      defined in Regulation S) following the date
      hereof.  “Person”
      means an individual, partnership, firm, limited liability company, trust, joint
      venture, association, corporation, or any other legal entity.

     

    6.  Validity
      of Warrant and Issue of Shares.  The
      Company represents and warrants that this Warrant has been duly authorized
      and
      validly issued and warrants and agrees that all of Common Stock that may be
      issued upon the exercise of the rights represented by this Warrant will, when
      issued upon such exercise, be duly authorized, validly issued, fully paid and
      nonassessable and free from all taxes, liens and charges with respect to the
      issue thereof.  The Company further warrants and agrees that during
      the period within which the rights represented by this Warrant may be exercised,
      the Company will at all times have authorized and reserved a sufficient number
      of Common Stock to provide for the exercise of the rights represented by this
      Warrant.

     

    7.  Registration
      of Transfers and Exchange of Warrants.

     

    a.  Subject
      to compliance with the legend set forth on the face of this Warrant, the Company
      shall register the transfer of any portion of this Warrant in the Warrant
      Register, upon surrender of this Warrant with the Form of Assignment attached
      hereto duly completed and signed, to the Company at the office specified in
      or
      pursuant to Section 15.  Upon any such registration or transfer, a new
      warrant to purchase Common Stock, in substantially the form of this Warrant
      (any
      such new warrant, a “New Warrant”), evidencing the
      portion of this Warrant so transferred shall be issued to the transferee and
      a
      New Warrant evidencing the remaining portion of this Warrant not so transferred,
      if any, shall be issued to the transferring Warrant Holder.  The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance of such transferee of all of the rights and obligations of a Warrant
      Holder of a Warrant.

     

    b.  This
      Warrant is exchangeable, upon the surrender hereof by the Warrant Holder to
      the
      office of the Company specified in or pursuant to Section 15 for one or more
      New
      Warrants, evidencing in the aggregate the right to purchase the number of
      Warrant Shares which may then be purchased hereunder.  Any such New
      Warrant will be dated the date of such exchange.

     

    
      	
              8.  

            	
              Exercise
                of Warrants.

            

    

     

    a.  Upon
      surrender of this Warrant with the Form of Election to Purchase attached hereto
      duly completed and signed to the Company, at its address set forth in Section
      15, and upon payment and delivery of the Exercise Price per Warrant Share
      multiplied by the number of Warrant Shares that the Warrant Holder intends
      to
      purchase hereunder, in lawful money of the United States of America, in cash
      or
      by certified or official bank check or checks, to the Company, all as specified
      by the Warrant Holder in the Form of Election to Purchase, the Company shall
      promptly (but in no event later than 7 business days after the Date of Exercise
      (as defined herein)) issue or cause to be issued  and cause to be
      delivered to or upon the written order of the Warrant Holder and in such name
      or
      names as the Warrant Holder may designate (subject to the restrictions on
      transfer described in the legend set forth on the face of this Warrant), a
      certificate for the Warrant Shares issuable upon such exercise, with such
      restrictive legend as required by the 1933 Act.  Any person so
      designated by the Warrant Holder to receive Warrant Shares shall be deemed
      to
      have become holder of record of such Warrant Shares as of the Date of Exercise
      of this Warrant.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    b.  A
“Date
      of Exercise” means the date on which the Company shall have received (i) this
      Warrant (or any New Warrant, as applicable), with the Form of Election to
      Purchase attached hereto (or attached to such New Warrant) appropriately
      completed and duly signed, and (ii) payment of the Exercise Price for the number
      of Warrant Shares so indicated by the Warrant Holder to be
      purchased.

     

    c.  This
      Warrant shall be exercisable at any time and from time to time for such number
      of Warrant Shares as is indicated in the attached Form of Election To
      Purchase.  If less than all of the Warrant Shares which may be
      purchased under this Warrant are exercised at any time, the Company shall issue
      or cause to be issued, at its expense, a New Warrant evidencing the right to
      purchase the remaining number of Warrant Shares for which no exercise has been
      evidenced by this Warrant.

     

    9.  Maximum
      Exercise.  The Warrant Holder shall not
      be entitled to exercise this Warrant on a Date of Exercise
      in connection with that number of shares of Common Stock which would be in
      excess of the sum of (i) the number of shares of Common Stock beneficially
      owned
      by the Warrant Holder and its affiliates on an exercise date, and (ii) the
      number of shares of Common Stock issuable upon the exercise of this Warrant
      with
      respect to which the determination of this limitation is being made on an
      exercise date, which would result in beneficial ownership by the Warrant Holder
      and its affiliates of more than 4.9% of the outstanding shares of Common Stock
      on such date.  This Section 9 may be waived or amended only with the
      consent of the Holder and the consent of holders of a majority of the shares
      of
      outstanding Common Stock of the Company who are not Affiliates.  For
      the purposes of the immediately preceding sentence, the term “Affiliate” shall
      mean any person: (a) that directly, or indirectly through one or more
      intermediaries, controls, or is controlled by, or is under common control with,
      the Company; or (b) who beneficially owns (i) the Company’s Common Stock
      Purchase Warrant “B”, “C”, “D”,  and “E” dated May ___, 2007, or (ii)
      this Warrant.  For the purposes of the immediately preceding sentence,
      beneficial ownership shall be determined in accordance with Section 13(d) of
      the
      Securities Exchange Act of 1934, as amended, and Regulation 13d-3
      thereunder.

     

    10.  Adjustment
      of Exercise Price and Number of Shares.  The character of
      the shares of stock or other securities at the time issuable upon exercise
      of
      this Warrant and the Exercise Price therefore, are subject to adjustment upon
      the occurrence of the following events, and all such adjustments shall be
      cumulative:

     

    a.  Adjustment
      for Stock Splits, Stock Dividends, Recapitalizations,
      Etc.  The Exercise Price of this Warrant and the number of
      shares of Common Stock or other securities at the time issuable upon exercise
      of
      this Warrant shall be appropriately adjusted to reflect any stock dividend,
      stock split, combination of shares, reclassification, recapitalization or other
      similar event affecting the number of outstanding shares of stock or
      securities.

     

    b.  Adjustment
      for Reorganization, Consolidation, Merger, Etc.  In case of
      any consolidation or merger of the Company with or into any other corporation,
      entity or person, or any other corporate reorganization, in which the Company
      shall not be the continuing or surviving entity of such consolidation, merger
      or
      reorganization (any such transaction being hereinafter referred to as a
"Reorganization"), then, in each
      case, the holder of this Warrant, on exercise hereof at any time after the
      consummation or effective date of such Reorganization (the "Effective
      Date"), shall receive, in lieu of the shares of stock or other
      securities at any time issuable upon the exercise of the Warrant issuable on
      such exercise prior to the Effective Date, the stock and other securities and
      property (including cash) to which such holder would have been entitled upon
      the
      Effective Date if such holder had exercised this Warrant immediately prior
      thereto (all subject to further adjustment as provided in this
      Warrant).

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    c.  Certificate
      as to Adjustments.  In case of any adjustment or readjustment
      in the price or kind of securities issuable on the exercise of this Warrant,
      the
      Company will promptly give written notice thereof to the holder of this Warrant
      in the form of a certificate, certified and confirmed by the Board of Directors
      of the Company, setting forth such adjustment or readjustment and showing in
      reasonable detail the facts upon which such adjustment or readjustment is
      based.

     

    d.  The
      Company sells, grants or issues any shares, options, warrants, or any instrument
      convertible into shares or equity in any form below the exercise price per
      share
      of the warrant.   In the event the Company sells, grants
      or issues any shares, options, warrants, or any instrument convertible into
      shares or equity in any form below the current exercise price per share of
      the
      warrant, then the current exercise price per share for the warrant shall be
      reduced to such lower price per share. Such reduction shall be made at the
      time
      such transaction is executed.

     

    11.  Fractional
      Shares.  The Company shall not be
      required to issue or cause to be issued fractional Warrant Shares on the
      exercise of this Warrant.  The number of full Warrant Shares that
      shall be issuable upon the exercise of this Warrant shall be computed on the
      basis of the aggregate number of Warrants Shares purchasable on exercise of
      this
      Warrant so presented.  If any fraction of a Warrant Share would,
      except for the provisions of this Section 11, be issuable on the exercise of
      this Warrant, the Company shall, at its option, (i) pay an amount in cash equal
      to the Exercise Price multiplied by such fraction or (ii) round the number
      of
      Warrant Shares issuable, up to the next whole number.

     

    12.  Sale
      or Merger of the Company.  Upon a Change
      in Control, the restriction contained in Section 9 shall immediately be released
      and the Warrant Holder will have the right to exercise this Warrant concurrently
      with such Change in Control event.  For purposes of this Warrant, the
      term “Change in Control” shall mean a consolidation or merger of the Company
      with or into another company or entity in which the Company is not the surviving
      entity or the sale of all or substantially all of the assets of the Company
      to
      another company or entity not controlled by the then existing stockholders
      of
      the Company in a transaction or series of transactions.

     

    13.  Notice
      of Intent to Sell or Merge the
      Company.  The Company will give Warrant
      Holder thirty (30) days notice before the event of a sale of all or
      substantially all of the assets of the Company or the merger or consolidation
      of
      the Company in a transaction in which the Company is not the surviving
      entity.

     

    14.  Issuance
      of Substitute Warrant. In the event of a merger,
      consolidation, recapitalization or reorganization of the Company or a
      reclassification of Company shares of stock, which results in an adjustment
      to
      the number of shares subject to this Warrant and/or the Exercise Price
      hereunder, the Company agrees to issue to the Warrant Holder a substitute
      Warrant reflecting the adjusted number of shares and/or Exercise Price upon
      the
      surrender of this Warrant to the Company.

     

    15.  Notice.  All
      notices and other communications hereunder shall be in writing and shall be
      deemed to have been given (i) on the date they are delivered if delivered in
      person; (ii) on the date initially received if delivered by facsimile
      transmission followed by registered or certified mail confirmation; (iii) on
      the
      date delivered by an overnight courier service; or (iv) on the third business
      day after it is mailed by registered or certified mail, return receipt requested
      with postage and other fees prepaid as follows:

     

    If
      to
      the Company:

     

    Red
      Reef
      Laboratories International, Inc.

    450
      Fairway Drive, Suite 103

    Deerfield
      Beach, FL 33441

    Facsimile:
      954-698-6263

     

    If
      to
      the Warrant Holder:

    

    T
      Squared
      Capital LLC

    1325
      Sixth Avenue, Floor 28

    New
      York,
      NY 10019

    Facsimile:
      212-671-1403

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    
      	
              16.  

            	
              Miscellaneous.

            

    

     

    a.  This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and permitted assigns.  This Warrant may
      be amended only by a writing signed by the Company and the Warrant
      Holder.

     

    b.  Nothing
      in this Warrant shall be construed to give to any person or corporation other
      than the Company and the Warrant Holder any legal or equitable right, remedy
      or
      cause of action under this Warrant; this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrant Holder.

     

    c.  This
      Warrant shall be governed by, construed and enforced in accordance with the
      internal laws of the State of New York without regard to the principles of
      conflicts of law thereof.

     

    d.  The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    e.  In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceablilty of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonably
      substitute therefore, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    f.  The
      Warrant Holder shall not, by virtue hereof, be entitled to any voting or other
      rights of a shareholder of the Company, either at law or equity, and the rights
      of the Warrant Holder are limited to those expressed in this
      Warrant.

    

    

    

    

    [SIGNATURES
      ON FOLLOWING PAGE]

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      the
      authorized officer as of the date first above stated.

    

    

    Red
      Reed
      Laboratories International, Inc., a Florida corporation

    

    

    By:                                                                

    Name:  Peter
      Versace

    Title:   Executive
      Vice President

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    FORM
      OF ELECTION TO PURCHASE

    

    (To
      be
      executed by the Warrant Holder to exercise the right to purchase shares of
      Common Stock under the foregoing Warrant)

     

    

    To:  Red
      Reed Laboratories International, Inc.:

    

    In
      accordance with the Warrant enclosed with this Form of Election to Purchase,
      the
      undersigned hereby irrevocably elects to purchase ______________ shares of
      Common Stock (“Common Stock”), $.001 par value, of Red Reed Laboratories
      International, Inc., and encloses the warrant and $____ for each Warrant Share
      being purchased or an aggregate of $________________ in cash or certified or
      official bank check or checks, which sum represents the aggregate Exercise
      Price
      (as defined in the Warrant) together with any applicable taxes payable by the
      undersigned pursuant to the Warrant.

    

    The
      undersigned requests that certificates for the shares of Common Stock issuable
      upon this exercise be issued in the name of:

    
__________________________________________________

    (Please
      print name and address)

     

    __________________________________________________

    (Please
      insert Social Security or Tax Identification Number)

    

    If
      the
      number of shares of Common Stock issuable upon this exercise shall not be all
      of
      the shares of Common Stock which the undersigned is entitled to purchase in
      accordance with the enclosed Warrant, the undersigned requests that a New
      Warrant (as defined in the Warrant) evidencing the right to purchase the shares
      of Common Stock not issuable pursuant to the exercise evidenced hereby be issued
      in the name of and delivered to:

    
 

    

    ___________________________________________________

    (Please
      print name and address)

    

    Dated:
      ____________                         Name
      of Warrant Holder:

    

    T
      Squared Capital LLC

    

    By:  ____________________________________                                                              

    

    Name:  ___________________________________

    

    Title:  ____________________________________

    

    Signature
      must conform in all respects
      to name of

    Warrant
      Holder as specified on the
      face of the Warrant

     

    
      
         

      

      
        8exhibit10_1.htm

    

      INTERNATIONAL
        CONSOLIDATED COMPANIES INC.

      

      2007
        EMPLOYEE STOCK BENEFIT PLAN

      

      INTERNATIONAL
        CONSOLIDATED COMPANIES, INC. (a Florida corporation), hereby adopts The 2007
        Employee Stock Benefit Plan International Consolidated Companies Inc. (the
        “Plan”) this 21st day
        of
        November 2007.  Under the Plan, the Company may issue stock, or grant
        options to acquire the Company 's common stock, without nominal or par value
        (the "Stock" ), from time to time to employees (including officers and
        directors) of the Company or its subsidiaries, all on the terms and conditions
        set forth herein ("Benefits").  In addition, at the discretion of
        the Board of Directors, Benefits may from time to time be granted under this
        Plan to other individuals, including consultants or advisors, who contribute
        to
        the success of the Company or its subsidiaries but are not employees of the
        Company or its subsidiaries, provided that bona fide services shall be rendered
        by consultants and advisors and such services must not be in connection with
        the
        offer or sale of securities in a capital-raising transaction.  Furthermore,
        no stock may be issued, or option granted, under the benefit plan to
        consultants, advisors, or other persons who directly or indirectly promote
        or
        maintain a market for the Company's securities.

      

      1.
         Purpose of the Plan.  The Plan is intended to aid the Company in
        maintaining and developing a management team, attracting qualified officers,
        employees, consultants and key advisors capable of contributing to the future
        success of the Company, and rewarding those individuals who have contributed
        to
        the success of the Company.  The Company has designed this Plan to aid it
        in retaining the services of executives and employees and in attracting new
        personnel when needed for future operations and growth and to provide such
        personnel with an incentive to remain employees of the Company, to use their
        best efforts to promote the success of the Company's business, and to provide
        them with an opportunity to obtain or increase a proprietary interest in
        the
        Company.  It is also designed to permit the Company to reward those
        individuals who are not employees of the Company but who management perceives
        to
        have contributed to the success of the Company or who are important to the
        continued business and operations of the Company.  The above goals will be
        achieved through the granting of Benefits.

      

      2.
         Administration.  The Plan shall be administered by a Plan
        Administrator and Plan Committee appointed by the Board of Directors of the
        Company (the “Board”) which shall keep the minutes of its proceedings with
        regard to the Plan and all records, documents, and data pertaining to its
        administration of the Plan.  A majority of the members of the Committee
        shall constitute a quorum for the transaction of business, and the vote of
        a
        majority of those members present at any meeting shall decide any question
        brought before that meeting.  In addition, the Committee may take any
        action otherwise proper under the Plan by the affirmative vote, taken without
        a
        meeting, of a majority of its members.  Any decision or determination
        reduced to writing and signed by a majority of the members shall be as effective
        as if it had been made by a majority vote at a meeting properly called and
        held.
 All questions of interpretation and application of the Plan shall be
        subject to the determination of the Committee.  The actions of the
        committee in exercising all of the rights, powers and authorities set out
        in
        this Plan, when performed in good faith and in its sole judgment, shall be
        final, conclusive, and binding on the parties.

      

      3.
         Shares of Stock Subject to this Plan.  A total of One Million Two
        Hundred Thousand (1,200,000) Shares of Common Stock may be subject to, or
        issued
        pursuant to, Benefits granted under this Plan.  If any right to acquire
        Stock granted under this Plan is exercised by the delivery of shares of Stock
        or
        the relinquishment of rights to shares of Stock, only the net shares of Stock
        issued (the shares of stock issued less the shares of Stock surrendered)
        shall
        count against the total number of shares reserved for issuance under the
        terms
        of this Plan.

      

      4. Eligibility.
         The Plan Administrators may grant Benefits to employees, officers, and
        directors of the Company and its subsidiaries, as may be existing from time
        to
        time, and to other individuals who are not employees of the Company or its
        subsidiaries , including consultants and advisors, provided that such
        consultants and advisors render bona fide services to the Company or its
        subsidiaries and such services are not rendered in connection with the offer
        or
        sale of securities in a capital-raising transaction, or for establishing,
        maintaining or promoting a public market for the Company's securities.  In
        any case, the Plan Administrators shall determine, based on the foregoing
        limitations and the Company's best interests, which employees, officers,
        directors, consultants and advisors are eligible to participate in this Plan.
         Benefits shall be in the amounts, and shall have the rights and be subject
        to the restrictions, as may be determined by the Plan Administrators, all
        as may
        be within the provisions of this Plan.

      

      5.
         Authority to Grant Stock Awards.  The Committee, in its discretion
        and subject to the provisions of the Plan may, from time to time, grant to
        eligible individuals of the Company Stock Awards.  The Board may award and
        issue shares of Common Stock under the Plan in fulfillment of such Stock
        Awards.
 Stock Awards may be made in lieu of cash compensation or as additional
        compensation.  Stock Awards may also be made pursuant to performance-based
        goals established by the Board.

      

      Subject
        only to any applicable limitations set forth in the Plan, the number of shares
        of Common Stock covered by any Stock Award shall be determined by the
        Committee.

      

      7.  Stock/Option
        Awards.

      

      (a.) 
        Awards in Lieu of Compensation.  The Committee may grant Common Stock or
        Options to Purchase Common Stock, to an Eligible Individual under the Plan,
        without any payment by the individual, in lieu of certain cash compensation
        or
        as additional compensation. The Stock Award is subject to appropriate tax
        withholding.  After compliance with the tax withholding requirements, a
        stock certificate shall be issued to the individual recipient of the Stock
        Award.  The certificate shall bear such legend, if any, as the Board
        determines is reasonably required by applicable law. Prior to receipt of
        a Stock
        Award, the individual must comply with appropriate requests of the Board
        to
        assure compliance with all relevant laws.

      

      (b.)
         Performance Based Awards.  The Board may award shares of Common
        Stock, without any payment for such shares, to designated individuals if
        specified performance goals established by the Board are satisfied.  The
        designation of an employee eligible for a specific performance-based Stock
        Award
        shall be made by the Board in writing prior to the beginning of the twelve-month
        period for which the performance is measured.  The Board shall establish
        the number of shares to be issued to a designated employee if the performance
        goal is met.  The Board must certify in writing that a performance goal has
        been met prior to issuance of any certificate for a performance-based Stock
        Award to any employee.  If the Board certifies the entitlement of an
        employee to the performance-based Stock Award, the certificate shall be issued
        to the employee as soon as administratively practicable, and subject to other
        applicable provisions of the Plan, including but not limited to, all legal
        requirements and tax withholding.  Performance goals determined by the
        Board may be based on specified increases in revenue, net profits, stock
        price, Company or segment sales, market share, earnings per share, return
        on
        equity and/or business development milestones.

      

      8. 
        Registration.  The Company may, but shall not be obligated to, register any
        securities covered by a Stock Award, pursuant to the Securities Act of 1933
        (as
        now in effect or as hereafter amended) and, in the event any shares are
        registered, the Company may remove any legend on certificates representing
        these
        shares.  The Company shall not be obligated to take any other affirmative
        action in order to cause the Stock Award to comply with any law or regulation
        of
        any governmental authority.

      

      9.  Federal
        Tax Considerations.

      

      (a.)  Withholding.
 If
        the grant of a Benefit hereunder, or exercise of an Option given as a Benefit
        is
        subject to withholding or other trust fund payment requirements of the Internal
        Revenue Code of 1986, as amended (the "Code”), or  applicable
        state or local laws, the Company will initially pay the Grantee's liability
        and
        will be reimbursed by Grantee no later than six months after such liability
        arises and Grantee hereby agrees to such reimbursement terms.

      

      (b.)  Compliance
        with Section
        409A of the Internal Revenue Code.  To the extent that the Board determines
        that any Option granted under the Plan is subject to Section 409A of the
        Code,
        the Option Agreement evidencing such Option shall incorporate the terms and
        conditions necessary to avoid the consequences specified in
        Section 409A(a)(1) of the Code.  To the extent practicable and without
        adverse effects on the Plan or on Option-holders, the Plan and Option Agreements
        shall be interpreted in a manner that avoids taxation under Section 409A
        of the
        Code and Department of Treasury regulations and other interpretive guidance
        issued thereunder, including without limitation any such regulations or other
        guidance that may be issued or amended after the Effective Date.
 Notwithstanding any provision of the Plan to the contrary, in the event
        that following the Effective Date the Board determines that any Option may
        be
        subject to Section 409A of the Code and related Department of Treasury
        guidance (including such Department of Treasury guidance as may be issued
        after
        the Effective Date), the Board may adopt such amendments to the Plan and
        the
        applicable Option Agreement or adopt other policies and procedures (including
        amendments, policies and procedures with retroactive effect), or take any
        other
        actions, that the Board determines are necessary or appropriate to
        (i) exempt the Option from Section 409A of the Code and/or preserve
        the intended tax treatment of the benefits provided with respect to the Option,
        or (ii) comply with the requirements of Section 409A of the Code and Department
        of Treasury regulations and other interpretive guidance issued thereunder,
        including without limitation any such regulations or other guidance that
        may be
        issued or amended after the Effective Date.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      10.
         Dilution or Other Adjustment.  The shares of Stock subject to this
        Plan are subject to proportionate adjustment in the event of a stock dividend
        on
        the Stock or a change in the number of issued and outstanding shares of Stock
        as
        a result of a stock split, consolidation, or other
        recapitalization.

      

      11. 
        Employment Obligation.  The granting of any Stock Award shall not impose
        upon the Company any obligation to employ or continue to employ any grantee;
        and
        the right of the Company to terminate the employment of any officer or other
        employee shall not be diminished or affected by reason of the fact that a
        Stock
        Award has been granted to him.

      

      12. 
        Expiration and Termination of this Plan.  This Plan may be abandoned
        or terminated at any time by the Plan Administrators.  This Plan shall
        otherwise terminate on the earlier of the date that is five years from the
        date
        first appearing in this Plan or the date on which the Six Hundred Thousandth
        share is issued hereunder.

      

      13.  In
        addition to the restrictions imposed by Rule 144, Rule 701 or any other
        applicable rule or statute, including the Securities Act of 1933 as amended,
        the
        shares issued hereunder shall be held in escrow and released to the employ
        on
        the following schedule:

      

      Shares
        shall be released to beneficiaries of this plan in accordance with the
        directives of the Board of Directors at the time of the specific grant or
        award
        of stock.

      

      14.
         Amendment of this Plan.  This Plan may not be amended more than once
        during any six month period, other than to comport with changes in the Code
        or
        the Employee Retirement Income Security Act or the rules and regulations
        promulgated thereunder.  The Plan Administrators may modify and amend
        this Plan in any respect.

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