Document:

WWW.EXFILE.COM, INC. -- ZAP -- EXHIBIT 10.1 TO FORM 8-K

     

    EXHIBIT
      10.1

    

    Dated
      17 September 2007

    

    

    

    

    ZAP

    

    

    and

    

    

     YOUNGMAN
      AUTOMOBILE  CO., LTD.

    

    

    and

    

    

    EV
      HOLDINGS LIMITED

    

    

    

    

    
      
        

      

    

    SHAREHOLDERS’
      AGREEMENT

    

    

    
      
        

      

    
 

    

    

    

    LI
      & PARTNERS

    SOLICITORS

    22nd
Floor,
      World Wide
      House

    19
      Des
      Voeux Road Central

    Hong
      Kong

    Tel.
      No.:
      (852) 2501 0088     Fax No.: (852) 2501
      0028

    Our
      Ref : TC/TC/TC/4321/01/07

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              CONTENTS  

            
	 	 	 
	 	 	 
	
              Clause

            	
              Heading

            	
              Page

            
	 	 	 
	
              1.

            	
              DEFINITIONS
                AND INTERPRETATION

            	
              1

            
	 	 	 
	
              2.

            	
              CONDITIONS
                PRECEDENT

            	
              4

            
	 	 	 
	
              3.

            	
              SHARE
                CAPITAL

            	
              5

            
	 	 	 
	
              4.

            	
              MANAGEMENT

            	
              5

            
	 	 	 
	
              5.

            	
              FUNDING

            	
              7

            
	 	 	 
	
              6.

            	
              BUSINESS

            	
              7

            
	 	 	 
	
              7.

            	
              ACCOUNTING

            	
              9

            
	 	 	 
	
              8.

            	
              DIVIDENDS

            	
              9

            
	 	 	 
	
              9.

            	
              BOARD
                OF DIRECTORS

            	
              10

            
	 	 	 
	
              10.

            	
              MATTERS
                REQUIRING SPECIAL APPROVAL

            	
              11

            
	 	 	 
	
              11.

            	
              REPRESENTATIONS,
                WARRANTIES AND CONVENANTS

            	
              12

            
	 	 	 
	
              12.

            	
              INDEMNIFICATION

            	
              15

            
	 	 	 
	
              13.

            	
              TRANSFER
                OF SHARES

            	
              15

            
	 	 	 
	
              14.

            	
              DEADLOCK
                RESOLUTION

            	
              17

            
	 	 	 
	
              15.

            	
              TERMINATION

            	
              18

            
	 	 	
               

            
	
              16.

            	
              CONSEQUENCES
                OF NOTICES UNDER CLAUSE 15

            	
              19

            
	 	 	 
	
              17.

            	
              CONFIDENTIALITY

            	
              20

            
	 	 	 
	
              18.

            	
              RESTRICTIVE
                COVENANTS

            	
              21

            
	 	 	 
	
              19.

            	
              SPECIFIC
                ENFORCEMENT

            	
              22

            
	 	 	 
	
              20.

            	
              MISCELLANEOUS

            	
              22

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SHAREHOLDERS’
      AGREEMENT

    

    

    THIS
      AGREEMENT is made on the 17th day
      of  September  2007

    

    

    BETWEEN:

    

    
      	
              (1)  

            	
              ZAP,
                a corporation incorporated under the laws of California, the United
                States
                having its registered office at 501 Fourth Street, Santa Rosa, California
                95401, United States of America (“ZAP”);
                and

            

    

    

    
      	
              (2)  

            	
              YOUNGMAN
                AUTOMOBILE CO., LTD., a company
                incorporated with limited liability under the laws of the People’s
                Republic of China having its registered office at 501 Bada Road Jinhua
                City Zhejiang China. PC
                321016  (“Youngman”);

            

    

    

    
      	
              (3)  

            	
              EV
                HOLDINGS LIMITED(環保發展有限公司),
                a company incorporated with limited liability under the laws of Hong
                Kong
                having its registered office situate at Unit A, 14/F Shun On Commercial
                Building, 112-114 Des Voeux Road Central, Hong Kong (the
                “Company”).

            

    

    

    

    WHEREAS
      :

    

    
      	
              (A)  

            	
              The
                Company was incorporated in Hong Kong on 3 August
                2007 with an authorised capital of HK$10,000.00 divided into 10,000
                shares
                of HK$1.00 par value each. As at the date hereof, one share has been
                issued as fully paid to ZAP.

            

    

    

    
      	
              (B)  

            	
              ZAP
                and Youngman have agreed to enter into this Agreement for the purposes
                of
                regulating their relationship with each other and certain aspects
                of the
                affairs of and their dealings with the
                Company.

            

    

    

    
      	
              (C)  

            	
              The
                Company has agreed with ZAP and Youngman that it will comply with
                the
                terms and conditions of this Agreement insofar as they relate to
                the
                Company.

            

    

    

    

    NOW
      IT IS HEREBY AGREED as follows:

    

    

    
      	
              1.  

            	
              DEFINITIONS
                AND INTERPRETATION

            

    

    

    
      	
              1.1  

            	
              In
                this Agreement and the Recitals, unless the context otherwise
                requires:

            

    

    

    “Affiliates”
      means in respect of any specified person, a person that directly or indirectly
      controls such specified person, or is controlled by or is under common control
      with such specified person;

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    “Allotted
      Shares” means 9,999 shares of the Company to be allotted to each
      Shareholder upon execution of this Agreement as provided under Clause
      3.1;

    “Articles”
      means the Memorandum and Articles of Association of the Company in the form
      of
      Schedule B attached hereto, which may be amended from time to time;

    

    “Auditor”
      means the auditors of the Company appointed from time to time;

    

    “Board”
      means the board of directors of the Company or the directors present (personally
      or by their alternates) at any meeting of the directors of the Company duly
      convened and held;

    

    “Brand
      Name” means the general brand name selected by the Board and used by
      the Company;

    

    “Business”
      means the business of the Company in relation to developing, producing,
      marketing and sale of electric vehicles, electric-hybrid vehicles, and
      battery/energy recharging infrastructure throughout the Territories as set
      forth
      under Clause 6.1 and the Business Plan;

    

    “Business
      Plan” means the business plan of the Company to be developed by the
      Company and agreed and approved between the Shareholders, including any
      amendment and supplement thereto from time to time;

    

    “Capital
      Loan” means any loan to the Company granted by any Shareholder as
      provided under Clause 6.3;

    

    “CEO”
      means the chief executive officer of the Company appointed from time to time
      under Clause 4.2;

    

    “Chairman
      of the Board” means the chairman of the Board appointed from time to
      time under Clause 4.3;

    

    “Companies
      Ordinance” means the Companies Ordinance (Chapter 32 of the Laws of
      HKSAR);

    

    “Employment
      Agreement” means the Employment Agreement to be entered between the
      Company and its Key Employees in the form acceptable to the
      Shareholders;

    

     “Holding
      Company” shall have the meaning ascribed thereto in section 2 of the
      Companies Ordinance;

    

    “Hong
      Kong” means Hong Kong Special Administrative Region;

    

    “Hong
      Kong Dollars” or the sign “HK$” means the lawfully currency of Hong
      Kong;

    

    “Initial
      Capital Contribution” means initial contribution to the share capital
      of the Company by each Shareholder upon the execution of this Agreement as
      set
      forth under Clause 4.1;

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Investment
      Schedule” means the schedule for Youngman to make a contribution of
      US$51,000,000.00 and ZAP to make a contribution of US$49,000,000.00 to the
      share
      capital of the Company by 31 December 2008 as set out in Schedule A
      hereto;

    

    “Key
      Employees” means the Chief Operating Officer, VP Engineering, VP Sales
& Marketing, VP Human Resources and VP Finance of the Company;

    

    “Licensing
      Agreement” means the agreements entered from time to time between the
      Company and any other parties for the purpose of licensing the key technology
      to
      be incorporated into the Products;

    

    “Management”
      means the CEO, and such other executives or managers as determined by the Board
      from time to time;

    

    “Management
      Options” means options of Shares issued by the Company under the order
      of the Board to any Key Employees approved by the Board upon terms and subject
      to conditions as determined by the Board at its discretion as set out in this
      Agreement or any other related documents determined by the Board in accordance
      with Clause 14.1.

    

    “Marketing
      and Distribution Agreements” means the agreements to be entered between
      each Shareholder and the Company after execution of this Agreement in the form
      acceptable to such Shareholder and the Company with respect to the marketing
      and
      distribution activities to be carried out by the Shareholders within the
      Territory, which shall provide that (i) ZAP shall have the exclusive right
      of
      marketing and distribution of the Products in North America and South America;
      (ii) Youngman shall have the exclusive right of marketing and distribution
      of
      the Products in the Asia Pacific Region (including the Japan); and (iii) the
      Company shall have the exclusive right of marketing and distribution of the
      Products in the remaining Territories other than those set out in (i) and (ii)
      above;

    

    “PRC”
      means the People’s Republic of China, which
      for purposes of this Agreement excludes Hong Kong;

    

    “Products”
      means the vehicles developed and manufactured by the Company from time to time
      as provided under the Business Plan;

    

    “Shares”
      means shares of US$1.00 par value each in the authorized capital of the
      Company;

    

    “Shareholders”
      means the holders of the Shares; a “Shareholder” means any of
      them;

    

    “Subsidiary”
      shall have the meaning ascribed thereto in section 2 of the Companies
      Ordinance;

    

    “Territories”
      means the United States, Asia and all other countries, territories and
      jurisdictions worldwide, without restriction;

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Total
      Capital Contribution” means the aggregate amount of the contributions
      to the share capital of the Company made by each Shareholder;

    

    “Transfer
      Notice” means the notice to transfer or otherwise dispose of any Shares
      or any interest in such Shares as defined under Clause 13.2 (a);

    

    “United
      States” means the United States of America;

    

    “US
      Dollars” or the sign “US$” means the lawfully currency
      of the United States;

    

    
      	
              1.2  

            	
              Words
                importing one gender include all other genders and words importing
                the
                singular include the plural and vice
                versa.

            

    

    

    
      	
              1.3  

            	
              References
                to Recitals, Clauses and Schedules are references to recitals, clauses
                and
                schedules of this Agreement.

            

    

    

    
      	
              1.4  

            	
              Reference
                to a person includes bodies corporate or
                unincorporated.

            

    

    

    
      	
              1.5  

            	
              The
                headings are inserted for convenience only and shall not affect the
                construction of this Agreement.

            

    

    

    
      	
              1.6  

            	
              Reference
                in this Agreement to any legislation shall include any legislation
                which
                amends, consolidates or replaces the same or which has been amended,
                consolidated or replaced by the same and shall include any subsidiary
                and
                subordinate legislation made under the relevant
                legislation.

            

    

    

    
      	
              1.7  

            	
              “Including”
                or similar expressions are not words of
                limitation.

            

    

    

    
      	
              1.8  

            	
              Words
                and expressions defined in the body of this Agreement (including
                its
                schedules) shall have the meanings thereby attributed to them whenever
                the
                context requires.

            

    

    

    

    
      	
              2.  

            	
              CONDITIONS
                PRECEDENT

            

    

    

    This
      Agreement and everything contained herein are conditional upon the fulfilment
      of
      all the following terms and conditions upon execution of this
      Agreement:

    

    
      	
              (a)  

            	
              each
                Shareholder shall procure the authorized share capital of the Company
                to
                be increased to US$100,000,000.00;

            

    

    

    
      	
              (b)  

            	
              each
                Shareholder shall subscribe the Allotted Shares and pay the Initial
                Capital Contribution in accordance with Clause
                3;

            

    

    

    
      	
              (c)  

            	
              the
                Shareholders shall procure that the persons named in Clauses 9.2 and 9.3 and
                not
                already directors are appointed directors of the
                Company;

            

    

    

    
      	
              (d)  

            	
              the
                Shareholders shall procure adoption of the Articles by the Company;
                and

            

    

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              (e)  

            	
              meetings
                of the Shareholders and the Board shall be held at which such resolutions
                as are necessary to give effect to and implement the provisions of
                this
                Agreement shall be passed.

            

    

    

    

    
      	
              3.  

            	
              SHARE
                CAPITAL

            

    

    

    
      	
              3.1  

            	
              Upon
                execution of this Agreement and fulfilment of the condition under
                Clause 2
                (a), each Shareholder shall subscribe Shares as provided under Clause
                3.2
                below and pay the consideration for subscription of the Shares (the
                “Initial Capital
                Contribution”).

            

    

    

    
      	
              3.2  

            	
              After
                subscription of the Allotted Shares in accordance with Clause 3.1,
                the
                Shares shall be beneficially owned and registered as
                follows:

            

    

     

    
      
        	 	
                Shareholders

              	
                No.
                  of Shares

              	
                Consideration

              
	 	
                ZAP

              	
                4,899

              	
                HK$4,899.00

              
	 	
                Youngman

              	
                5,100

              	
                HK$5,100.00

              

      

       

    

    
      	
              3.3  

            	
              Unless
                otherwise agreed between the Shareholders, the Initial Capital
                Contribution shall be paid by Youngman by way of cash within 10 days
                from
                the date of this Agreement; and the Initial Capital Contribution
                shall be
                paid by ZAP by way of cash within 10 days from the date of this
                Agreement.

            

    

    

    
      	
              3.4  

            	
              The
                Shareholders shall make additional contributions to the share capital
                of
                the Company from time to time in accordance with the requirements
                of the
                Business Plan and the Investment Schedule by way subscription of
                the
                Shares, so that the Total Capital Contribution, if required, made
                by
                Youngman shall be US$51,000,000.00 and ZAP shall be US$49,000,000.00
                (which provides the Company its share capital of US$100,000,000.00)
                by 31
                December 2008. Each Shareholder shall be offered the right to participate
                in each subscription of the Shares in proportion to its respective
                percentage of the Shares at the time of the
                subscription.

            

    

    

    
      	
              3.5  

            	
              Save
                as otherwise provided in Clause 5 or other provisions in this Agreement,
                any further issuance of Shares shall be made as and when the Board
                may so
                determine and in accordance with this Agreement and the Articles.
                The
                parties hereto shall procure to each other that any new shareholders
                shall
                first agree in writing in terms acceptable to all the parties hereto
                to be
                bound by and observe the provisions of this Agreement (including
                this
                Clause) so far as such provisions are
                applicable.

            

    

    

    

    
      	
              4.  

            	
              MANAGEMENT

            

    

    

    
      	
              4.1  

            	
              The
                Board shall be responsible for supervising the activities of the
                Company
                and for determining, subject to the provisions of this Agreement,
                the
                overall policies and objectives of the Company, provided that all
                business
                of the Company shall be conducted in the best interests of the Company
                on
                sound commercial principles.

            

    

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
              4.2  

            	
              The
                Company shall have a Chief Executive Officer (the “CEO”)
                who shall be responsible for the day-to-day operation of the business
                of
                the Company.  The CEO shall be appointed on such terms as may be
                approved by the Board and the first CEO shall be Mr. Albert
                Lam.

            

    

    

    
      	
              4.3  

            	
              The
                Company shall have a chairman of the Board (the “Chairman of the
                Board”) who shall be responsible for chairing all meetings of
                the
                directors. The Chairman of the Board shall be appointed on such terms
                as
                may be approved by the Board and the first Chairman of the Board
                shall be
                Mr. Albert Lam.

            

    

    

    
      	
              4.4  

            	
              The
                Board shall determine the remuneration, compensation and benefits
                of the
                Management, which shall be reasonably in conformity with the current
                local
                market standard adopted by other companies of similar scale, expertise and
                nature of business to the Company.

            

    

    

    
      	
              4.5  

            	
              ZAP
                shall procure and arrange its staff to be transferred to the Company
                as
                necessary to carry on the Business by the Company. The Company shall
                enter
                into employment agreements with such staff and provide remuneration,
                compensation and benefits reasonably in conformity with the prevailing
                market standard based on the working hours, performance, experience
                and
                any other factors which the Management may consider
                significant.

            

    

    

    
      	
              4.6  

            	
              Appointment,
                removal or replacement of any of the Key Employees of the Company
                as well
                as their remuneration, compensation and benefits shall be jointly
                decided
                by the Management.

            

    

    

    
      	
              4.7  

            	
              Save
                and except the matters requiring action, consent or agreement of
                the Board
                as set out in Clause 5.11 and 5.12 below, the CEO shall, subject
                to the
                supervision of and directions given from time to time by the Board,
                be
                vested with overall responsibility and authority for and control
                of the
                operation, management, maintenance and administration of the Business,
                including but not limited to:

            

    

    

    
      	
            	
              (a)

            	
              soliciting
                and negotiating business on behalf of the Company with size of the
                deal up
                to amounts approved by the Board from time to
                time;

            

    

    

    
      	
            	
              (b)

            	
              dealing
                with day-to-day staff (other than the Management) employment
                issues;

            

    

    

    
      	
               

            	
              (c)

            	
              recruiting
                employees of the Company and setting benefit plans and programs for
                the
                employees of the Company;

            

    

    

    
      	
            	
              (d)

            	
              handling
                routine banking relationships and treasury
                functions;

            

    

    

    
      	
            	
              (e)

            	
              managing
                day-to-day operations relating to the
                Business;

            

    

    

    
      	
               

            	
              (f)

            	
              preparing
                and implementing annual and three-year business plan, budget and
                forecasts
                of the Company from time to time approved by the Board;
                and

            

    

    

    
      	
               

            	
              (g)

            	
              authorizing
                capital expenditure of up to US$100,000.00 without approval of the
                Board.

            

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    
      	
              5.  

            	
              FUNDING

            

    

    

    
      	
              5.1  

            	
              Financing
                for the business of the Company shall be provided by (i) cash subscription
                for the Shares, (ii) loan(s) from the Shareholders and/or (iii) external
                funding including loans from banks or other third parties as provided
                under this Agreement.

            

    

    

    
      	
              5.2  

            	
              In
                the event that the Company in the course of carrying on the Business
                requires funds in addition to the capital contributions set forth
                in
                Clause 3.1 and 3.4, the Company may allot additional Shares as necessary
                to raise sufficient funds for carrying on the Business, and ZAP and/or
                Youngman may, but neither of them shall be obliged to, subscribe
                such
                Shares as additional contribution to the capital of the
                Company.

            

    

    

    
      	
              5.3  

            	
              For
                purposes of financing any acquisition of assets or properties by
                the
                Company, it shall, with the approval of holders of a majority of
                the
                Shares, obtain such financing as set forth in the Business Plan of
                the
                Company.  In the event that the financing described in this
                Clause is not sufficient to enable the Company to pursue the Business,
                then:-

            

    

    

    
      	
               

            	
              (i)

            	
              ZAP
                or Youngman may grant loans to the Company on terms and conditions
                that
                are commercially reasonable under the circumstances and approved
                by a
                majority of the Board (the “Capital Loan”);
                or

            

    

    

    
      	
               

            	
              (ii)

            	
              if
                the Board considers that granting of the Capital Loan is unfeasible
                or not
                in the best interests of the Company, the Company shall, to the extent
                economically feasible, obtain loan or other financing arrangement
                from
                other third party.

            

    

    

    
      	
              5.4  

            	
              If
                the Company shall obtain any loan from any third party, the Shareholders
                agree to execute and deliver to such lender all documents and instruments
                to pledge to such lender, and grant to such lender security interests
                in,
                (i) the Shares; and/or (ii) the assets and properties of the Company
                to
                the extent as permitted by the existing financing arrangements of
                the
                Company, in order to secure repayment of the loan by the
                Company.

            

    

    

    
      	
              5.5  

            	
              All
                costs of financing the Company mentioned in this Clause shall be
                considered an expense of the Company, and shall be paid before any
                dividends or distributions are made to any of the
                Shareholders.

            

    

    

    

    
      	
              6.  

            	
              BUSINESS

            

    

    

    
      	
              6.1  

            	
              Subject
                to other provisions in this Agreement, the Company shall engage solely
                and
                exclusively in the business of developing, producing, marketing and
                sale
                of electric vehicles, electric-hybrid vehicles, and battery/energy
                recharging infrastructure throughout the Territories, as provided
                under
                the business plan of the Company to be developed and agreed between
                the
                Shareholders, which may be supplemented or amended by the Shareholders
                from time to time (the “Business
                Plan”).

            

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	
              6.2  

            	
              (a)
                All the products licensed to the Company or its subsidiaries
                by  Youngman and the products researched and developed by the
                Company and its subsidiaries should be produced by the manufacturer
                exclusively designated by Youngman. Without unanimous approval of
                all the
                shareholders of each party, the Company and its subsidiaries are
                not
                entitled to license or transfer to any other party the right of
                manufacturing any of the above-mentioned products. Youngman will
                consign
                the production to the enterprise controlled by Youngman. The plants,
                land
                and equipments required for the production should be invested or
                manufactured by such enterprise designated by Youngman and the sites
                for
                production should be determined by Youngman. The prices for the products
                sold to the Company and its subsidiaries by the enterprise designated
                by
                Youngman should be set in the Contract on Consigned Manufacturing
                based on
                the following standards:

            

    

    

    
      	
               

            	
              (i)

            	
              ex-work
                price determined by Youngman;

            

    

    

    
      	
               

            	
              (ii)

            	
              if
                required to increase the exclusive parts of the electric vehicle,
                the
                price shall be based on the ex-work price determined by Youngman
                plus the
                purchasing costs for those exclusive parts of the
                electric vehicle;

            

    

    

    
      	
               

            	
              (iii)

            	
              if
                there are any unnecessary parts, the price shall be based on the
                ex-work
                price determined by Youngman minus the purchasing costs for those
                unnecessary parts.

            

    

    

    
      	
               

            	
              (b)

            	
              The
                company and all its subsidiaries shall sell the products to Youngman
                and
                ZAP for the exclusive distribution within defined territories. Based
                upon
                the above guiding principle, the distributor pricing and pricing
                structure
                shall be defined within the related
                agreement.

            

    

    

    
      	
              6.3  

            	
              Each
                Shareholder shall use its best endeavour to assist the Company to
                develop
                the Business and carry out the Business
                Plan.

            

    

    

    
      	
              6.4  

            	
              The
                Company may enter into any transactions with any Shareholder but,
                save in
                respect of transactions expressly contemplated by this Agreement,
                such
                Shareholder shall disclose to the Board any interest which it may
                have in
                a transaction to be entered into by the
                Company.

            

    

    

    
      	
              6.5  

            	
              The
                Company shall set up (i) its headquarter office in Hong Kong, (ii)
                a
                project management office in the United Kingdom, (iii) research and
                development centres in the United States (in or around San Francisco),
                Malaysia and the PRC, and (iv) such other offices as agreed between
                the
                Shareholders.

            

    

    

    
      	
              6.6  

            	
              The
                Company shall generally conduct business under its Brand Name, provided
                that any products produced or manufactured by the Company or the
                Shareholders may bear the respective brand name(s) of each Shareholder,
                or
                such other brand name(s) as agreed between the
                Shareholders.

            

    

    

    
      	
              6.7  

            	
              The
                Company shall use its best endeavour to enter into the Licensing
                Agreement
                

            

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 

              	
                with
                  any other parties that own or control key technology to be incorporated
                  into the products being manufactured by the Company, and shall
                  (subject to
                  approval of the Board from time to time) aim to make equity investments
                  in
                  these technology firms.

              

      

       

       

    

    
      	
              7.  

            	
              ACCOUNTING

            

    

    

    The
      Company shall maintain accurate and complete accounting records and the
      Shareholders or their respective appointed representatives shall each have
      the
      right to inspect all accounting and other records of the Company at all
      reasonable times.  The accounts of the Company shall be kept in
      accordance with generally accepted international accounting principles in Hong
      Kong and shall be audited annually.  The first Auditors shall be a
      firm to be selected at the discretion of the Board, and successor Auditors
      may
      be selected from time to time as determined by the Board.  The
      financial year of the Company shall end on 31 December in each year commencing
      from 1 January or such other date as may be determined by the
      Board.

     

     

    
      	
              8.  

            	
              DIVIDENDS

            

    

    

    
      	
              8.1  

            	
              Upon
                the sales of the products within the defined territories, both
                shareholders have agreed to pay 2% of the sales revenue to the
                Company. The sum collected from Zap shall be paid to Youngman and the
                sum collected from Youngman shall be paid to Zap every year by the
                Company.

            

    

    

    
      	
              8.2  

            	
              If
                in respect of any financial year the Company shall have net profits
                after
                tax available for distribution, the parties hereto shall procure
                that such
                profits shall be applied in the following manner and order of
                priority:

            

    

    

    
      	
              (a)  

            	
              provision
                of working capital to finance the continuing operations and internal
                growth of the Business;

            

    

    

    
      	
              (b)  

            	
              repayment
                of any interest accrued on the outstanding Capital
                Loan;

            

    

    

    
      	
              (c)  

            	
              repayment
                of any outstanding principal of the Capital
                Loan;

            

    

    

    
      	
              (d)  

            	
              transfer
                to reserves consistent with the normal commercial requirements of
                businesses similar to those carried on by the
                Company;

            

    

    

    
      	
              (e)  

            	
              payment
                of cash dividends to the Shareholders after deduction of the above
                items
                within months after the end of such financial
                year.

            

    

    

    
      	
              8.3  

            	
              In
                deciding whether in respect of any financial year, the Company had
                or has
                profits available for distribution, the parties hereto shall procure
                that
                the Auditors shall certify whether such profits are available or
                not and
                the amount thereof (if any).  In giving such certificate the
                Auditors shall act as experts and not arbitrators and their determination
                shall be final and binding on the parties hereto, except in the case
                of
                manifest error.

            

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              9.  

            	
              BOARD
                OF DIRECTORS

            

    

    

    
      	
              9.1  

            	
              Unless
                otherwise agreed by the Shareholders, the Board shall consist of
                minimum
                of 3 and a maximum of 7 directors.

            

    

    

    
      	
              9.2  

            	
              At
                any time during the continuance in force of this Agreement, ZAP shall
                be
                entitled to first appoint in office one (1) directors and to appoint
                one
                additional director for every two directors added to the Board
                subsequently and to remove any such director(s) so
                appointed.  For this purpose, the first directors appointed by
                ZAP shall be Mr. Steven Schneider. 

            

    

    

    
      	
              9.3  

            	
              At
                any time during the continuance in force of this Agreement, Youngman
                shall
                be entitled to first appoint one (1) director and to appoint one
                additional director for every two directors added to the Board
                subsequently and to remove any such director(s) so appointed. For
                this
                purpose, the first director appointed by Youngman shall be Mr. Pang
                Qingnian.

            

    

    

    
      	
              9.4  

            	
              Save
                for the specific appointments made pursuant to Clauses 9.2 and 9.3, any
                exercise by any Shareholder of the power of appointment or removal
                conferred on it pursuant to the above provisions shall be served
                upon the
                other Shareholder and the Company whereupon the parties hereto shall
                forthwith join in to take such action as is necessary under the Articles
                to effect the appointment or removal (as the case may
                be).

            

    

    

    
      	
              9.5  

            	
              Any
                Shareholder removing a director appointed by it shall indemnify the
                other
                Shareholder and the Company against any claim by such director for
                wrongful dismissal arising out of such
                removal.

            

    

    

    
      	
              9.6  

            	
              Each
                director shall be entitled to appoint and remove from time to time
                without
                the consent of any other director any person to act as his
                alternate.

            

    

    

    
      	
              9.7  

            	
              The
                quorum necessary for the transaction of business at a Board meeting
                shall
                be two (2) directors at least, and the two directors shall be appointed
                by
                ZAP and Youngman respectively. Such quorum shall be increased by
                one (1)
                director for every two directors added to the Board
                subsequently.

            

    

    

    
      	
              9.8  

            	
              Save
                as otherwise provided in this Agreement, resolutions shall be passed
                at a
                meeting of the Board by a simple majority vote of the directors (or
                their
                respective alternates) present at the
                meeting.

            

    

    

    
      	
              9.9  

            	
              Unless
                otherwise agreed or waived by all directors (or their respective
                alternates), not less than 7 days’ notice of each directors’ meeting
                specifying (wherever practicable) the nature of the business to be
                transacted thereat, the time, the place and the date shall be given
                to
                each director.

            

    

    

    
      	
              9.10  

            	
              The
                directors (or their respective alternates) may participate in a meeting
                of
                the directors by means of conference telephone whereby all persons
                participating in the meeting can hear each other and participation
                in the
                meeting in such manner shall be deemed to constitute presence in
                person at
                such meeting and all the provisions in this Agreement and the Articles
                as
                to meetings shall, mutatis mutandis, be
                applicable.

            

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	
              9.11  

            	
              A
                resolution in writing signed by all the directors entitled to receive
                notice of a meeting of directors (or their respective alternates)
                shall be
                valid and effectual as if it had been passed at a duly convened meeting
                of
                directors and may consist of several documents in the like form each
                signed by one or more directors (or their respective
                alternates).

            

    

     

     

    
      	
              10.  

            	
              MATTERS
                REQUIRING SPECIAL APPROVAL

            

    

    

    
      	
              10.1  

            	
              Each
                Shareholder shall exercise all such voting rights and other powers
                or
                control as may be available to them in relation to the Company so
                as to
                promote the development and prosperity of, and shall generally use
                all
                reasonable endeavours to promote and assist the Company in developing
                and
                promoting the Business.

            

    

    

    
      	
              10.2  

            	
              Notwithstanding
                any provisions of this Agreement or of the Articles to the contrary,
                no
                resolution shall be passed or other decision or action shall be taken
                by
                or on behalf of the Company or the Board concerning any of the following
                matters with respect to the Company without (i) approval of the majority
                of the Board and (ii) approval of the holders of at least 66% of
                the then
                issued Shares (provided that such approvals shall not be unreasonably
                withheld):-

            

    

    

    
      	
               

            	
              (a)

            	
              any
                material change in the compensation or benefits of the Management
                or any
                of the Key Employees;

            

    

    

    
      	
               

            	
              (b)

            	
              incurring
                of any indebtedness, and any prepayment or repayment of any indebtedness
                of the Company, other than in the ordinary course of business of
                the
                Company;

            

    

    

    
      	
               

            	
              (c)

            	
              granting
                by the Company of any collateral security, or allowing the Company
                to
                incur any charge, lien or other encumbrance on its properties or
                assets to
                secure any indebtedness;

            

    

    

    
      	
               

            	
              (d)

            	
              participation
                in any business activity beyond the scope of the
                Business;

            

    

    

    
      	
               

            	
              (e)

            	
              entering
                into any partnership agreement with any third party, other than in
                the
                ordinary course of business of the
                Company;

            

    

    

    
      	
               

            	
              (f)

            	
              any
                change in the auditor of the Company, or termination of legal counsel
                acting for the Company;

            

    

     

    
      	
               

            	
              (g)

            	
              acquisition
                of any properties or assets for an aggregate consideration in excess
                of
                US$500,000.00;

            

    

    

    
      	
               

            	
              (h)

            	
              issuance
                of any shares to any third parties, save and except the shares to
                be
                issued to the Key Employees as provided under Clause
                15;

            

    

    

    
      	
               

            	
              (i)

            	
              any
                change to the fidelity, casualty or other insurance policies obtained
                by
                the Company;

            

    

    

    
      	
               

            	
              (j)

            	
              any
                expenditure which causes the Company to exceed its budget by 3% as
                set
                forth in the Business Plan;

            

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (k)

            	
              assignment
                of any assets or properties of the Company in trust for the benefit
                of any
                creditors;

            

    

    

    
      	
               

            	
              (l)

            	
              settlement,
                compromise or acceptance of any judgment against the Company;
                or

            

    

    

    
      	
               

            	
              (m)

            	
              entering
                into any agreement to do any of the
                foregoing.

            

    

    

    
      	
              10.3  

            	
              Notwithstanding
                any provisions of this Agreement or of the Articles to the contrary,
                no
                resolution shall be passed or other decision or action shall be taken
                by
                or on behalf of the Company or the Board concerning any of the following
                matters with respect to the Company without (i) unanimous approval
                of the
                Board and (ii) approval of the holders of at least 85% of the then
                issued
                Shares (provided that such approvals shall not be unreasonably
                withheld):

            

    

    

    
      	
               

            	
              (a)

            	
              alteration
                to the scope of the Business;

            

    

    

    
      	
               

            	
              (b)

            	
              any
                amendments that causes any fundamental change in the Business
                Plan;

            

    

    

    
      	
               

            	
              (c)

            	
              Any
                petition for liquidation or winding up of the
                Company;

            

    

    

    
      	
               

            	
              (d)

            	
              Any
                sale, assignment, transfer, charge, hypothecation, or any other
                disposition of all or substantial parts of the assets or properties
                of the
                Company; or

            

    

    

    
      	
               

            	
              (e)

            	
              Entering
                into any agreement or arrangement between the Company and any of
                its
                shareholders, directors or
                managers.

            

    

     

     

    
      	
              11.  

            	
              REPRESENTATIONS,
                WARRANTIES AND
                COVENANTS

            

    

    

    
      	
              11.1  

            	
              ZAP
                hereby represents and warrants as
                follows:

            

    

    

    
      	
               

            	
              (a)

            	
              ZAP
                is, and shall be, validly existing and in good standing under the
                laws of
                the jurisdiction of its
                incorporation;

            

    

    

    
      	
               

            	
              (b)

            	
              ZAP
                has all requisite corporate powers and authorities to enter into
                this
                Agreement and all other agreements in connection with the consummation
                of
                the transactions contemplated hereby (including but not limited to
                all
                exhibits and documents attached hereto) (the “Additional
                Agreements”), and perform its obligations there under, and no
                other approval, consent, action or proceedings shall be necessary
                to
                authorize such execution, delivery and
                performance;

            

    

    

    
      	
               

            	
              (c)

            	
              this
                Agreement and each of the Additional Agreements are valid and binding
                upon
                ZAP as well as enforceable against ZAP in accordance with the terms
                thereof;

            

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (d)

            	
              the
                execution, delivery and performance of this Agreement and the Additional
                Agreements and the consummation by ZAP of the transactions contemplated
                thereby or relating thereto do not and will not (i) result in a violation
                of the constitutions, bylaws or other organizational documents of
                ZAP, or
                (ii) conflict with, or constitute a default (or an event which with
                notice
                or lapse of time or both may become a default) under, or give to
                others
                any rights of termination, amendment, acceleration or cancellation
                of any
                agreement, indenture or instrument or obligation to which ZAP is
                a party
                or by which its properties or assets are bound, or (iii) result in
                a
                violation of any law, rule, or regulation, or any order, judgment
                or
                decree of any court or governmental agency applicable to
                ZAP;

            

    

    

    
      	
               

            	
              (e)

            	
              No
                petition has been taken out or threatened to be taken out for liquidation
                or winding up of ZAP;

            

    

    

    
      	
               

            	
              (f)

            	
              Neither
                ZAP nor any affiliate of ZAP has engaged any broker, finder or investment
                banker in connection with the Company;
                and

            

    

    

    
      	
               

            	
              (g)

            	
              ZAP
                shall cause one or more of its officers to attend a monthly meeting
                with
                the officer or officers of Youngman to be held at the principal office
                of
                the Company or via teleconference, or at such other time and place
                as
                agreed between the Shareholders.

            

    

    

    
      	
              11.2  

            	
              Youngman
                hereby represents and warrants as
                follows:-

            

    

    

    
      	
               

            	
              (a)

            	
              Youngman
                is, and shall be, validly existing and in good standing under the
                laws of
                the jurisdiction of its
                incorporation;

            

    

    

    
      	
               

            	
              (b)

            	
              Youngman
                has all requisite corporate powers and authorities to enter into
                this
                Agreement and all other agreements in connection with the consummation
                of
                the transactions contemplated hereby (including but not limited to
                all
                exhibits and documents attached hereto) (the “Additional
                Agreements”), and perform its obligations there
                under;

            

    

    

    
      	
               

            	
              (c)

            	
              this
                Agreement and each of the Additional Agreements are valid and binding
                upon
                Youngman as well as enforceable against Youngman in accordance with
                the
                terms thereof and no other approval, consent, action or proceedings
                shall
                be necessary to authorize such execution, delivery and
                performance;

            

    

    

    
      	
               

            	
              (d)

            	
              the
                execution, delivery and performance of this Agreement and the Additional
                Agreements and the consummation by Youngman of the transactions
                contemplated thereby or relating thereto do not and will not (i)
                result in
                a violation of the constitutions, bylaws or other organizational
                documents
                of Youngman, or (ii) conflict with, or constitute a default (or an
                event
                which with notice or lapse of time or both may become a default)
                under, or
                give to others any rights of termination, amendment, acceleration
                or
                cancellation of any agreement, indenture or instrument or obligation
                to
                which Youngman is a party or by which its properties or assets are
                bound,
                or (iii) result in a violation of any law, rule, or regulation, or
                any
                order, judgment or decree of any court or governmental agency applicable
                to Youngman;

            

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (e)

            	
              No
                petition has been taken out or threatened to be taken out for liquidation
                or winding up of Youngman;

            

    

    

    
      	
               

            	
              (f)

            	
              Neither
                Youngman nor any affiliate of Youngman has engaged any broker, finder
                or
                investment banker in connection with the Company;
                and

            

    

    

    
      	
               

            	
              (g)

            	
              Youngman
                shall cause one or more of its officers to attend a monthly meeting
                with
                the officer or officers of ZAP to be held at the principal office
                of the
                Company or via teleconference, or at such other time and place as
                agreed
                between the Shareholders.

            

    

    

    
      	
              11.3  

            	
              Each
                Shareholder and the Company hereby agree and covenant
                that:-

            

    

    

    
      	
               

            	
              (a)

            	
              the
                Shareholders shall negotiate in good faith and enter into the Marketing
                and Distribution Agreements with the Company within sixty (60) days
                after
                the date of this Agreement;

            

    

    

    
      	
               

            	
              (b)

            	
              the
                Company shall use its best endeavour to prepare a definitive and
                detailed
                Business Plan within sixty (60) days of the date of this Agreement,
                the
                content of which shall be agreeable to the
                Shareholders;

            

    

    

    
      	
               

            	
              (c)

            	
              the
                Company shall enter into the Employment Agreement with its Key Employees
                in the form acceptable to the
                Shareholders;

            

    

    

    
      	
               

            	
              (d)

            	
              the
                Company shall use its best endeavour to enter into the Licensing
                Agreements with any other parties that own or control key technology
                to be
                incorporated into the products to be manufactured by the Company,
                and
                shall (subject to approval of the Board from time to time) aim to
                make
                equity investments in such companies or firms that own or control
                the key
                technology.

            

    

     

    
      
        	
                 

              	
                (e)

              	
                the
                  Board shall hold its regular meetings once every calendar month
                  and such
                  meetings shall be attended in person or via conference
                  telephone;

              

      

       

      
        
          
            	
                     

                  	
                    (f)

                  	
                    each
                      Shareholder shall not engage in any activities through joint
                      venture
                      cooperation with any electric vehicle company, whose businesses
                      are in
                      direct or indirect competition with the
                      Company.

                  

          

           

        

      

    

    
      	
              11.4  

            	
              Without
                written approval from both the shareholders, the Company and its
                subsidiaries shall not, at any time, provide any products and technologies
                researched and developed by the Company to any third parties in any
                ways.
                Without written approval from Youngman, the company shall not provide
                any
                Youngman licensed products and technologies to any third parties
                in any
                ways.

            

    

    

    
      	
                    
                11.5

            	
              The
                Shareholders hereby agree that the Company shall establish a wholly
                owned
                subsidiary in the PRC, with a registered capital of US$90,000,000.00,
                in
                accordance with the laws of the PRC within eighteen (18) months from
                the
                date hereof.

            

    

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    
      	
              12.  

            	
              INDEMNIFICATION

            

    

    

    
      	
                    
12.1

            	
              None
                of the Shareholders shall be liable to the Company or to any other
                Shareholder in damages or otherwise for any actions taken in good
                faith or
                reasonably believed by such Shareholder to be in or not in any conflict
                with the best interests of the Company, provided that such actions
                are
                within the scope of the Business. In the event that any actions has
                been
                taken by any Shareholder outside of the scope of the Business Plan,
                such
                Shareholder shall only be liable for those actions which constitute
                wilful
                misconduct, gross negligence, fraud, or any material breach of its
                obligations under this Agreement.

            

    

    

    
      	
                    
                12.2 

            	
              The
                Company shall indemnify and hold harmless against any Shareholder
                in
                respect of any threatened, pending or completed actions, suits or
                proceedings to which such Shareholder is a party or threatened to
                be made
                a party by reason of the fact that it is or was a shareholder of
                or
                participant in the Company, or any alleged cause of action for damages
                to
                any third party caused by its performance in management or operation
                of
                the Company. The Company shall fully indemnify each Shareholder against
                all claims, damages, compensations, judgments or settlements provided
                that
                such Shareholder has acted in good faith all along and in a manner
                reasonably believed to be in or not in any conflict with the best
                interests of the Company and the actions or conducts of such Shareholder
                do not constitute any wilful misconduct, gross negligence, fraud,
                or a
                material breach of its obligations under this
                Agreement.

            

    

     

     

    
      	
              13.  

            	
              TRANSFER
                OF SHARES

            

    

    

    
      	
              13.1  

            	
              Save
                as otherwise provided in this Agreement, a Shareholder shall not
                sell,
                transfer, charge, incumber, grant options over or otherwise dispose
                of any
                of the Shares or any beneficial interest in any of the Shares now
                owned or
                to be acquired after the date of this Agreement by it to any person
                without prior written consent of all other Shareholders. Any such
                consent,
                if given, may be subject to the condition (inter alia) that such
                person
                shall first agree in writing in terms acceptable to such other
                Shareholders to be bound by as one of the Shareholders under this
                Agreement and observe all the provisions hereunder (including this
                Clause)
                so far as such provisions are
                applicable.

            

    

     

    
      	
              13.2
 

            	
              (a)

            	
              
                Every
                  Shareholder who intends to transfer or otherwise dispose of any
                  Shares or
                  any interest in such Shares (the “Proposing Transferor”)
                  shall, before so doing or agreeing so to do, inform the Company
                  of his
                  intention by giving it notice in writing (the “Transfer
                  Notice”).  The Transfer Notice shall constitute the
                  Company the Proposing Transferor’s agent empowered to sell the Shares
                  referred to in the notice (together with all rights then attached
                  to them)
                  at the Prescribed Price (as hereinafter defined) to any Shareholder
                  in the
                  manner appearing below and shall not be revocable except with the
                  unanimous agreement of the
                  Board.

              

            

    

     

    
      
        	
                 

              	
                (b)

              	
                
                  
                    If
                      not more than 14 days after the date on which the Transfer
                      Notice
                      was  given the Proposing Transferor and the Board shall have
                      agreed in writing a price per share as representing its fair
                      value, or as
                      being acceptable to the Proposing Transferor and not more than
                      its fair
                      value, then such price shall
                      be  

                  

                

              

      

    

    

    
      
        
        

      

      
        15

        
          

        

      

       

      
        
          	
                   

                	
                   

                	
                  the
                    Prescribed Price (the “Prescribed Price”).  In
                    the absence of any agreement having been reached within the said
                    period of
                    14 days the Board shall immediately request the auditors for
                    the time
                    being of the Company to determine and certify in writing to the
                    Company
                    the sum per share considered by them to be fair value as between
                    a willing
                    seller and a willing purchaser as at the date on which the Transfer
                    Notice
                    was given and the sum per Share so determined and certified shall
                    be the
                    Prescribed Price.  The auditors shall act at the cost and
                    expense of the Proposing Transferor as experts and not as arbitrators
                    and
                    their determination shall be final and binding for all purposes
                    (save in
                    respect of manifest error).

                

        

      

       

    

    
      	
               

               

            	
              (c)

            	
              Within
                7 days of the Prescribed Price being so agreed or determined and
                fixed all
                Shares included in any Transfer Notice shall be offered for purchase
                at
                the Prescribed Price by notice in writing (the “Offer”)
                given by the Company to all Shareholders (other than the Shareholder
                to
                whose Shares the Transfer Notice relates).  The Offer shall be
                on the basis that in the case of competition for them the Shares
                so
                offered shall (in accordance with, but subject to Clause 13 be sold
                to
                acceptors in proportion (as nearly as may be without involving fractions
                or increasing the number sold to any Shareholder beyond that applied
                for
                by it) to their existing shareholdings.  Any such Offer shall
                specify a period (being not less than 21 days and not more than 42
                days)
                within which it must be accepted or will
                lapse.

            

    

    

    
      	
               

            	
              (d)

            	
              If
                the Shareholders or any of them (hereinafter called the
                “Purchasers”) shall within the said period of the Offer
                agree to purchase any of the Shares concerned, the Company shall
                immediately give notice in writing as mentioned below to the Proposing
                Transferor and to the Purchasers and on payment of the Prescribed
                Price
                the Proposing Transferor shall be bound to transfer such Shares to
                the
                respective Purchasers accordingly.  Every such notice shall
                state the name and address of each Purchaser and the number of Shares
                agreed to be purchased by it and the sale and purchase shall be completed
                at a place and time to be appointed by the Board being not less than
                7
                days nor more than 30 days after the date of such notice Provided
                always
                that if the Transfer Notice shall state that the Proposing Transferor
                is
                not willing to transfer part only of the Shares the subject of the
                Transfer Notice then this Clause shall not apply unless the Company
                shall have found Purchasers for all of such Shares and if the Company
                fails to find such Purchasers then any such Offer shall be deemed
                to have
                lapsed without having been validly
                accepted.

            

    

    

    
      	
               

            	
              (e)

            	
              If
                a Proposing Transferor shall fail or refuse to transfer any Shares
                to a
                Purchaser under this Clause13, the Board may authorise some person
                to
                execute the necessary transfer and may deliver it on its behalf and
                the
                Company may receive the purchase money in trust for the Proposing
                Transferor (which it shall pay into a separate bank account in the
                Company’s name) and cause the Purchaser to be registered as the holder of
                such Shares.  The receipt of the Company for the purchase money
                shall be a good discharge to the Purchaser (who shall not be bound
                to see
                to the application of the purchase money) and after the Purchaser
                has been
                registered in purported exercise of the said powers the validity
                of the
                proceedings shall not be questioned by any
                person.

            

    

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (f)

            	
              If
                at the expiry of the period referred to in Clause 13.2 the Shareholders
                shall not have agreed to purchase all the Shares so offered, the
                Company
                shall immediately give notice in writing of that fact to the Proposing
                Transferor and subject to the previous sanction of the Board it shall
                then
                be at liberty at any time up to the expiration of 3 months after
                the
                giving of such notice to transfer those Shares which the Shareholders
                shall not have so agreed to purchase to any person on a bona fide
                sale at
                any price not being less than the Prescribed Price Provided
                that:

            

    

    

    
      	
               

            	
              (i)

            	
              if
                the Transfer Notice shall state that the Proposing Transferor is
                not
                willing to transfer part only of the Shares the subject of the Transfer
                Notice, then the Proposing Transferor shall not be entitled under
                this
                Clause to transfer any of such Shares unless in aggregate the whole
                of
                such Shares are so transferred; and

            

    

    

    
      	
               

            	
              (ii)

            	
              the
                Board may require to be satisfied that such Shares are being transferred
                in pursuance of a bona fide sale for the consideration stated in
                the
                instrument of transfer without any deduction rebate or allowance
                whatever
                being given to the Purchaser and if not so satisfied may refuse to
                register the instrument of
                transfer.

            

    

    

    
      	
                    
                13.3

            	
              Subject
                to the provisions of Clause 13.2, no transfer of any share of the
                Company
                shall be made or registered without the previous sanction of the
                Board
                which may, in its absolute and uncontrolled discretion, without assigning
                any reason, refuse to give such
                sanction.

            

    

     

     

    
      	
              14.  

            	
              MANAGEMENT
                OPTIONS

            

    

    

    
      	
              14.1  

            	
              The
                Company shall have such number of Shares reserved for allotment or
                issue
                (the “Reserved Shares”) not exceeding 12% of the then
                issued Shares, on an all as-if-converted basis, for granting of any
                Management Options in favour of any Key
                Employees.

            

    

    

    
      	
              14.2  

            	
              The
                Management Options may be granted by the Board from time to time
                to any
                Key Employees upon terms and subject to conditions as determined
                by the
                Board at its discretion and all Management Options shall be subject
                to
                annually vesting stipulation for a period of not less than three
                (3)
                years.

            

    

    
      	
               

            	 

    

    
      	
              14.3  

            	
              Any
                holder of the Management Options or any rights thereof will be required
                to
                execute stock restriction agreements with the Company to be approved
                by
                the Board providing for certain restrictions on transfer and for
                the first
                refusal of the Shareholders and assumption of the rights and obligations
                of a Shareholder under this
                Agreement.

            

    

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    
      	
              15.  

            	
              TERMINATION

            

    

    

    
      	
              15.1  

            	
              This
                Agreement shall continue in full force and effect until terminated
                in
                accordance with the provisions of this
                Clause.

            

    

    

    
      	
              15.2  

            	
              Any
                of the Shareholders (the “First Party”) shall be entitled
                to terminate this Agreement immediately by notice in writing (but
                not
                after 90 days of the event in question first coming to the attention
                of
                the First Party) if any of the events set out below shall occur.
                Such
                notice shall be served upon the Shareholder in respect of which the
                event
                or events relate (“Such Other Party”) and copies of such
                notice shall be given to all other Shareholders.  The effect of
                such notice shall be to terminate this Agreement as between Such
                Other
                Party and the remaining party or parties to this Agreement but this
                Agreement shall continue in full force and effect as between such
                remaining parties (if more than one) but not if otherwise. The said
                events
                are:

            

    

    

    
      	
              (a)  

            	
              if
                Such Other Party shall commit any persistent or material breach of
                any of
                its obligations under this Agreement and shall fail to remedy such
                breach
                (if capable of remedy) within 30 days after being given notice by
                the
                First Party so to do; or

            

    

    

    
      	
              (b)  

            	
              if
                Such Other Party shall go into liquidation whether compulsory or
                voluntary
                (except for the purposes of a bona fide reconstruction or amalgamation
                with the consent of all other Shareholders, such consent not to be
                unreasonably withheld) or if Such Other Party shall have an administrator
                appointed or if a receiver, administrative receiver or manager shall
                be
                appointed over any part of the assets or undertaking of Such Other
                Party;
                or

            

    

    

    
      	
              (c)  

            	
              if,
                without the prior written consent of the all other Shareholders,
                there
                shall be any change in the person or persons who owns or own a majority
                of
                the voting shares in, or otherwise has or have effective control
                of, Such
                Other Party.

            

    

    

    
      	
              15.3  

            	
              This
                Agreement shall terminate in respect of any Shareholder (but shall
                continue between the other Shareholders (if more than one) but not
                otherwise) if at any time as a result of a transfer of Shares made
                in
                accordance with this Agreement that Shareholder holds no Shares in
                the
                capital of the Company but without prejudice to any rights which
                any party
                may have against any other party arising prior to such
                termination.

            

    

    

    
      	
              15.4  

            	
              This
                Agreement shall terminate immediately upon an initial public offering
                of
                the Shares (or the shares of any new holding company formed for such
                purpose on a recognized stock exchange, or if an effective resolution
                is
                passed to wind up the Company, or if a liquidator is otherwise appointed
                (but without prejudice to any rights any party may have against any
                other
                party arising prior to such
                termination).

            

    

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    
      	
              16.  

            	
              CONSEQUENCES
                OF NOTICES UNDER CLAUSE 15

            

    

    

    
      	
              16.1  

            	
              If
                any Shareholder shall serve a notice of termination under Clause
                15.2,
                that Shareholder (the “Terminator”) shall be entitled by
                that notice to require the recipient of such notice (the
                “Terminatee”) either to purchase all (but not some only)
                of the Shares of the Terminator or to sell to the Terminator all
                (but not
                some only) of the Shares of the Terminatee at a price determined
                in
                accordance with the provisions of Clause 16.2 below.  On the
                exercise of any such right by the Terminator, it and the Terminatee
                shall
                become bound respectively to sell or purchase on the terms set out
                below.  If in a valid termination notice no such power of sale
                or purchase is exercised by the Terminator, the parties hereto shall
                procure that the Company shall be immediately wound
                up.

            

    

    

    
      	
              16.2  

            	
              The
                purchase price of the Shares to be bought and sold pursuant to Clause
                16.1
                shall be their fair value as agreed between the parties to such sale
                and
                purchase or in default of agreement within 45 days after the service
                of
                the notice of termination such sum as shall be certified (at the
                request
                of any such party) by the auditors for the time being of the Company
                to be
                the fair value of such Shares on the date when the termination notice
                was
                served.  In so certifying the auditors are irrevocably
                instructed to value the Shares at fair value as between a willing
                seller
                and a willing purchaser on that date but otherwise they shall take
                into
                account all such circumstances as shall seem to them
                relevant.  In so acting such auditors are instructed to act as
                experts and not as arbitrators and their decision shall (save in
                respect
                of manifest error) be final and binding on the parties to such sale
                and
                purchase of purposes and their costs shall be borne in equal shares
                by all
                of such parties.

            

    

    

    
      	
              16.3  

            	
              Completion
                of the sale and purchase of Shares pursuant to the provisions of
                Clause
                16.1 shall take place at the Hong Kong business office of the Company
                at
                10.00 am on the fifth business day after the price payable for such
                Shares
                has been agreed or determined in accordance with the provisions of
                Clause
                16.2 (or such other time and/or place as the parties to such sale
                and
                purchase may agree) and in respect of which the provisions of Clauses
                16.4, 16.5, 16.6 and 16.7 shall then have
                effect.

            

    

    

    
      	
              16.4  

            	
              At
                any completion of the sale and purchase of Shares pursuant to Clause
                16.1,
                in return for a certified cheque or cashier order drawn on any licensed
                bank in Hong Kong (or such other means of payment which is agreed
                by the
                seller) for the full amount of the purchase money for the Shares
                being
                bought and sold (determined in accordance with the foregoing provisions
                of
                this Clause) and such other amounts as referred to in Clause 16.5,
                the
                seller(s) shall deliver to the purchaser(s) duly executed share transfers
                for the Shares being sold in favour of the purchaser(s) (in accordance
                with their respective entitlements) or as they may direct together
                with
                the relevant share certificate(s) (or an acceptable indemnity in
                lieu).  Any Shares sold under or pursuant to the above
                provisions shall be sold free of all liens charges and incumbrances
                and
                together with all rights now or in future attaching to
                them.

            

    

    

    
      	
              16.5  

            	
              If
                any Shareholder (the “Outgoing Party”) shall elect or
                become bound to transfer all its Shares to any other Shareholders
                under or
                pursuant to the 

            

    

    

    
      
        
        

      

      
        19

        
          

        

      

       

      
        	
                 

              	
                provisions
                  of this Clause, such other Shareholders shall upon or immediately
                  prior to
                  completion of such transfer procure:

              

         

      

    

    
      	
              (a)  

            	
              the
                immediate release of all guarantees, indemnities and similar covenants
                (if
                any) given by the Outgoing Party in favour or for the benefit of
                the
                Company (and pending such release shall indemnify and keep the Outgoing
                Party fully and effectively indemnified from and against all claims
                arising under such guarantees, indemnities and similar covenants
                (if
                any)); and

            

    

    

    
      	
              (b)  

            	
              the
                immediate repayment to the Outgoing Party of all money advanced to
                the
                Company by the Outgoing Party by way of loan or loan stock, including
                any
                Capital Loans, then outstanding (if any) together with all interest
                (if
                any) down to the date of actual payment (as well before as after
                judgment).

            

    

    

    
      	
              16.6  

            	
              In
                the event of any Shareholder ceasing to be a shareholder in the Company
                where the corporate name of such Shareholder or its subsidiary or
                any part
                thereof contains EV or similar expressions or any word or words the
                same
                or similar to the corporate name or any distinctive part of the corporate
                name of Company, such Shareholder shall procure that within 30 days
                the
                corporate name of such Shareholder or its subsidiary or any thereof
                shall
                be changed so as to exclude such word or
                words.

            

    

    

    
      	
              16.7  

            	
              The
                Shareholders shall exercise all voting and other rights available
                to them
                to ensure the implementation of the preceding provisions of this
                Clause
                and that any provisions contained in the Articles restricting transfers
                of
                Shares shall be waived or suspended to allow such sales and purchases
                to
                proceed as provided above and the Shareholders shall procure the
                registration of any transfer of any Shares any pursuant to this Agreement
                accordingly.

            

    

    

    

    
      	
              17.  

            	
              CONFIDENTIALITY

            

    

    

    
      	
              17.1  

            	
              The
                Shareholders undertake to each other and the Company that they will
                not at
                any time hereafter use or divulge or communicate to any person other
                than
                to officers or employees of the Company whose province is to know
                the same
                or on the instructions of the directors any confidential information
                concerning the business, accounts, finance or contractual arrangements
                or
                other dealings, transactions or affairs of the Company which may
                come to
                their knowledge and they shall use their best endeavours to prevent
                the
                publication or disclosure of any confidential information concerning
                such
                matters by themselves, their respective employees and
                officers.

            

    

    

    
      	
              17.2  

            	
              The
                obligations of each Shareholder contained in Clause 17.1 shall continue
                without limit in point of time but shall cease to apply to any information
                coming into the public domain otherwise than by breach by any such
                Shareholder of its said obligations Provided that nothing contained
                in
                this Clause shall prevent any party from disclosing any such information
                to the extent required in or in connection with legal proceedings
                arising
                out of this Agreement or any matter relating to or in connection
                with the
                Company.

            

    

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    
      	
              17.3  

            	
              All
                notes and memoranda (whether in the form of originals, reproductions
                or
                electronically stored data) of any trade secrets or confidential
                information concerning the business of the Company or any of its
                suppliers, agents, distributors or customers which shall be acquired,
                received or made by a Shareholder during the continuance of this
                Agreement
                shall be the property of the Company and shall be surrendered by
                the
                Shareholder to someone duly authorized by the Company in that behalf
                at
                the termination of this Agreement or at the request of the Board
                at any
                time during the continuance of this
                Agreement.

            

    

    

    

    
      	
              18.  

            	
              RESTRICTIVE
                COVENANTS

            

    

    

    
      	
              18.1  

            	
              Each
                Shareholder shall not, engage in the following activities for a period
                of
                two years after the date on which he or she ceased to be a shareholder
                of
                the Company:

            

    

    

    
      	
              (a)  

            	
              In
                any location where the Company carries on the Business at the Relevant
                Date (as hereinafter defined), carry on or be engaged in any activity
                or
                business which shall be in competition with the Business at the Relevant
                Date;

            

    

    

    
      	
              (b)  

            	
              Solicit
                or endeavour to entice away from or discourage from dealing with
                the
                Company any person who was at any time during the period of one year
                preceding the Relevant Date a manufacturer for or supplier, customer
                or
                client of the Company;

            

    

    

    
      	
              (c)  

            	
              supply
                or provide any goods or services to any person who was at any time
                during
                the period of one year preceding the Relevant Date a customer or
                client of
                the Company to whom the Company had during that period supplied or
                provided goods or services in the ordinary course of its
                business;

            

    

    

    
      	
              (d)  

            	
              solicit
                or endeavour to entice away from or discourage from being employed
                by the
                Company any person who was at the Relevant Date an officer or employee
                of
                the Company whether or not such person would commit a breach of contract
                by reason of leaving service; or

            

    

    

    
      	
              (e)  

            	
              Employ
                or engage or attempt to employ or engage or negotiate or arrange
                the
                employment or engagement by any other person, firm or company of
                any
                person who was at the Relevant Date an officer or employee of the
                Company.

            

    

    

    
      	
              18.2  

            	
              The
                restrictions contained in Clause 18.1 are considered reasonable by
                the
                parties hereto but in the event that any such restriction shall be
                found
                to be void but would be valid if some part thereof were deleted or
                the
                period or area of application reduced such restriction shall apply
                with
                such modification as may be necessary to make it valid and
                effective.

            

    

    

    
      	
              18.3  

            	
              For
                the purposes of this Clause, the “Relevant Date” means
                the date in question or the Termination Date (whichever shall be
                the
                earlier).

            

    

    

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

    
      	
              19.  

            	
              SPECIFIC
                ENFORCEMENT

            

    

    

    Each
      Shareholder acknowledges and agrees that each Shareholder will be irreparably
      damaged in the event any of the provisions of this Agreement are not performed
      by any Shareholder in accordance with their specific terms or are otherwise
      breached.  Accordingly, it is agreed that the Company and the
      Shareholders shall be entitled to an injunction to prevent breaches of this
      Agreement and to specific enforcement of this Agreement and its terms and
      provisions in any action instituted in any court of competent jurisdiction,
      in
      addition to any other remedy to which the Shareholders may be entitled at law
      or
      in equity.  Each Shareholder hereby consents to the jurisdiction in
      any such action brought in the courts of Hong Kong.

    

    

    
      	
              20.  

            	
              MISCELLANEOUS

            

    

    

    
      	
              20.1  

            	
              Implementation
                of Agreement

            

    

    

    
      	
               

            	
              Each
                Shareholder agrees that it will at all
                times:

            

    

    

    
      	
              (a)  

            	
              use
                all means reasonably available to it (including its voting power,
                direct
                or indirect, in relation to the Company) so as to ensure that the
                Company
                and any director of the Company nominated or appointed by it (and
                any
                alternate to such director) shall implement the provisions of this
                Agreement relating to the Company;
                and

            

    

    

    
      	
              (b)  

            	
              co-operate
                in good faith and execute such further documents and take such other
                action as may be reasonably required in order to give full effect
                to the
                provisions and intent of this
                Agreement.

            

    

    

    
      	
              20.2  

            	
              Agreement
                Prevails

            

    

    

    
      	
               

            	
              In
                the event that there is any inconsistency between the provisions
                of this
                Agreement and the provisions of the Articles, the provisions
                of  Articles shall
                prevail.

            

    

    

    
      	
              20.3  

            	
              Further
                Assurance

            

    

    

    The
      Shareholders shall use their reasonable efforts to do and execute or procure
      to
      be done and executed all such acts, deeds, documents and things as may be
      necessary to give effect to this Agreement.

    

    
      	
              20.4  

            	
              Entire
                Agreement

            

    

    

    This
      Agreement constitutes the entire agreement between the parties hereto, and
      supersedes any previous agreement, understanding, arrangement, communication
      or
      expression of intent with respect to the subject matter hereof.

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    
      	
              20.5  

            	
              Amendments

            

    

    

    No
      amendment of or addition to this Agreement shall be effective unless in writing
      and signed by or on behalf of all the parties hereto.

    

    
      	
              20.6  

            	
              No
                Representations

            

    

    

    Each
      Shareholder acknowledges that it has made its own independent evaluation of
      the
      business to be undertaken by the Company pursuant to this Agreement and has
      not
      been induced to enter into this Agreement or any of the transactions
      contemplated hereby by any representation made or advice given by any other
      Shareholder.

    

    
      	
              20.7  

            	
              No
                Partnership

            

    

    

    Nothing
      contained in or relating to this Agreement shall or shall be deemed to
      constitute a partnership or agency relationship between any of the parties
      hereto.

    

    
      	
              20.8  

            	
              No
                Waiver

            

    

    

    No
      omission or delay on the part of any party hereto in exercising its rights
      under
      this Agreement shall operate as a waiver thereof, nor shall any single or
      partial exercise by any party hereto of any such right preclude the further
      or
      other exercise thereof or the exercise of any other right which it may
      have.

    

    
      	
              20.9  

            	
              Severability

            

    

    

    If
      at any
      time any one or more of the provisions hereof is or becomes illegal, invalid
      or
      unenforceable in any respect under the applicable laws of any jurisdiction,
      neither the legality, validity or enforceability of the remaining provisions
      hereof, nor the legality, validity or enforceability of such provision under
      the
      applicable laws of any other jurisdiction, shall in any way be affected or
      impaired.

    

    
      	
              20.10  

            	
              Assignment

            

    

    

    
      	
              (a)  

            	
              This
                Agreement shall be binding on the parties hereto and their respective
                successors and shall enure to the benefit of each of them and their
                respective successors and permitted
                assigns.

            

    

    

    
      	
              (b)  

            	
              The
                benefit of this Agreement may not, except as otherwise herein provided,
                be
                assigned or transferred in whole or in part by any Shareholder without
                the
                prior consent of the other
                Shareholders.

            

    

    

    
      	
              20.11  

            	
              Time

            

    

    

    Time
      shall be of essence under this Agreement.

    

    
      	
              20.12  

            	
              Notices

            

    

    

    
      	
              (a)  

            	
              Every
                notice, demand or other communication given or made under this
                

            

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
      
        	
                 

              	
                Agreement
                  shall be in writing and delivered or sent by hand or prepaid recorded
                  delivery or registered post or by facsimile transmission to the
                  relevant
                  party at its address or fax number set out below (or such other
                  address or
                  fax number as the addressee shall by not less than 7 days’ prior written
                  notice specify to the other party):

              

      

       

      
        	 	
                To
                  ZAP: 

              	
                (1) 

              	ZAP 
	 	 	Address: 	501
                Fourth Street 
	 	 	 	Santa
                Rosa, California 95401 
	 	 	Fax
                Number: 	(707)
                525-8692 
	 	 	Attention: 	Mr.
                Steven Schneider 
	 	 	 	 
	 	 	(2)	Richardson
                & Patel LLP  
	 	 	Address: 	10900
                Wilshire Boulevard, Suite 500 
	 	 	 	Los
                Angeles, CA 90024 
	 	 	Fax
                Number: 	(310)
                208-1154 
	 	 	Attention: 	Edgar
                D. Park, Esq. 
	 	 	 	 
	 	To
                Youngman: 	
                Zhejiang
                  Youngman Automobile 

              	 
	 	 	
                Group
                  Co., Ltd. 

              	 
	 	 	Address: 	501
                Bada Road,  
	 	 	 	Jinhua
                City, Zhejiang, PRC 
	 	 	Fax
                Number: 	
                86-579-2256002 

              
	 	 	Attention:	
                Mr.
                  Pang Qingnian 

              
	 	 	 	 
	 	To
                the Company: 	
                EV
                  Holdings Limited 

              	 
	 	 	
                Address: 

              	Unit
                A, 14/F Shun On  
	 	 	 	Commercial
                Building, 112-114 Des  
	 	 	 	Voeux
                Road Central, 
	 	 	 	Hong
                Kong 
	 	 	Fax
                Number 	 
	 	 	Attention: 	 

      

       

    

    
      	
              (b)  

            	
              Any
                notice, demand, or other communication so addressed shall be deemed
                to
                have been delivered (i) if given or made by letter postage prepaid,
                within
                72 hours after posting (or 10 days later if overseas) (ii) if given
                or
                made by letter delivered by hand, upon delivery (iii) if given or
                made by
                facsimile transmission, at the time of despatch, provided that the
                original is posted or delivered to the recipient immediately after
                the
                facsimile transmission.

            

    

    

    
      	
              20.13  

            	
              Counterparts

            

    

    

    
      	
              (a)  

            	
              This
                instrument may be executed in several counterparts, all or any of
                which
                shall be treated for all purposes as one original and shall be and
                constitute one and the same
                instrument.

            

    

    

    
      	
              (b)  

            	
              This
                instrument may be executed by the parties in original or
                telecopy 

            

    

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

       

      
        
          	
                   

                	
                  produced
                    by fax machine or other means of electronic communication producing
                    a
                    printed copy.

                

        

      

       

    

    
      	
              20.14  

            	
              Governing
                Law and Jurisdiction

            

    

    

    This
      Agreement shall be governed by and construed in accordance with the laws of
      Hong
      Kong. The parties hereto submit to the non-exclusive jurisdiction of the courts
      of Hong Kong.

    

    

     

    [Remainder
      of Page Intentionally Left Blank]

    

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

    

    IN
      WITNESSWHEREOF this Agreement has been entered into
      the day and year first above written.

    

    

    SIGNED
      BY                                                                 
          )

    )

    on
      behalf
      of
      ZAP                                                             
     )

    in
      the
      presence
      of:                                                                 )

    

    /s/
      Steven Schneider

    

     

    

    

    SIGNED
      BY                                                                          
 )

    )

    on
      behalf
      of
Youngman                                                        )

    Automobile
      Co.,
      Ltd.                                                             )

    in
      the
      presence
      of:                                                                 )

    

    /s/
      Pang Qingnian

    

    

    

     

    SIGNED
      BY                                                                       
    )

    )

    on
      behalf
      of EV Holdings
      Limited                                      )

    in
      the
      presence
      of:                                                                 )

    

    /s/
      Steven Schneider

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    Investment
      Schedule

    

     

     

     

    
 

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B

    

    Memorandum
      and Articles of Association

    

     

     

     

    
 

    
      
        
        

      

      
        28Exhibit 4.1

INFE - HUMAN RESOURCES, INC.

2007-2 EQUITY INCENTIVE PLAN

1.

Purpose.

The Infe - Human Resources, Inc. 2007-2 Equity Incentive Plan (the “Plan”) has been established by Infe - Human Resources, Inc., a Nevada corporation (the “Company”), effective as of September 21, 2007 (the “Effective Date”), to foster and promote the long-term financial success of the Company and its Subsidiaries and thereby increase stockholder value. The Plan provides for the Award (as defined in Section 3) of equity incentives to those employees, directors, or officers of, or key advisers or consultants to, the Company or any of its Subsidiaries who are responsible for or contribute to the management, growth or success of the Company or any of its Subsidiaries.

2.

Definitions.

For purposes of this Plan, the following terms used herein shall have the following meanings, unless a different meaning is clearly required by the context.

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

“Change in Control” means the occurrence of any of the following:

(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)) (a “Person”) of “beneficial ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then-outstanding shares of common stock of the Company, assuming conversion of any outstanding preferred stock (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by any corporation or other entity pursuant to a reorganization, merger, consolidation or other business combination, if, following such reorganization, merger, consolidation or other business combination, the conditions described in (i), (ii) and (iii) of Section 2.2(c) are satisfied;

(b) if individuals who, as of the date hereof, constitute the Board of the Company (the “Incumbent Board”) cease for any reason to constitute at least two-thirds of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a two-thirds vote of the directors then constituting the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest subject to Regulation 14A promulgated under the Exchange Act or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c) approval by the stockholders of the Company of a reorganization, merger, consolidation or other business combination, unless following such reorganization, merger, consolidation or other business combination (i) more than 50% of, respectively, the then-outstanding shares of common stock or other equity interests of the corporation or other entity resulting from such reorganization, merger, consolidation or other business combination and the combined voting power of the then-outstanding voting securities of such corporation or other entity entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger, consolidation or other business combination in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, consolidation or other business combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be (for purposes of determining whether such percentage test is satisfied, there shall be excluded from the number of shares or other equity interests and voting securities of the resulting corporation or other entity owned by the Company’s stockholders, but not from the total number of outstanding shares or other equity interests and voting securities of the resulting corporation or other entity, any shares or voting securities received by any such stockholder in respect of any consideration other than shares or other equity interests or voting securities of the Company); (ii) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company, any qualified employee benefit plan of such corporation or other entity resulting from such reorganization, merger, consolidation or other business combination and any Person beneficially owning, immediately prior to such reorganization, merger, consolidation or other business combination, directly or indirectly, 50% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstanding shares of common stock or other equity interests of the corporation or other entity resulting from such reorganization, merger, consolidation or other business combination or the combined voting power of the then-outstanding voting securities of such corporation entitled to vote generally in the election of directors; and (iii) at least two-thirds of the members of the board of directors of the corporation or other entity resulting from such reorganization, merger, consolidation or other business combination were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, consolidation or other business combination; or

(d) (i) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company or (ii) the first to occur of (A) the sale or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company, or (B) the approval by the stockholders of the Company of any such sale or disposition, other than, in each case, any such sale or disposition to a corporation or other entity, with respect to which immediately thereafter, (1) more than 50% of, respectively, the then-outstanding shares of common stock or other equity interests of such corporation or other entity and the combined voting power of the then-outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be (for purposes of determining whether such percentage test is satisfied, there shall be excluded from the number of shares or other equity interests and voting securities of the transferee corporation or other entity owned by the Company’s stockholders, but not from the total number of outstanding shares and voting securities of the transferee corporation or other entity, any shares or other equity interests or voting securities received by any such stockholder in respect of any consideration other than shares or voting securities of the Company), (2) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company, any qualified employee benefit plan of such transferee corporation or other entity and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 50% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstanding shares of common stock or other equity interests of such transferee corporation or other entity and the combined voting power of the then-outstanding voting securities of such transferee corporation or other entity entitled to vote generally in the election of directors and (3) at least two-thirds of the members of the board of directors of such transferee corporation or other entity were members of the Incumbent Board at the time of the execution of the initial agreement or action of the board providing for such sale or other disposition of assets of the Company.

2

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

“Committee” shall have the meaning provided in Section 3 of the Plan.

“Common Stock” means the common stock, $0.001 par value, of the Company.

“Continuous Service” means that the Participant’s service with the Company, any Parent Company or any Subsidiary, whether as an employee, officer, director, adviser or consultant, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company, any Parent Company or any Subsidiary as an employee, officer, consultant, adviser or director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service. For example, a change in status from an employee of the Company to a consultant of any Parent Company or a Subsidiary or a director will not constitute an interruption of Continuous Service. The Committee, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by the Committee, including sick leave, military leave or any other personal leave.

“Disability” means (a) as it relates to the exercise of an Incentive Stock Option after termination of employment, a disability within the meaning of Section 22(e)(3) of the Code, and (b) for all other purposes, shall have the meaning given that term by the group disability insurance, if any, maintained by the Company for its employees or otherwise shall mean the complete inability of the Participant, with or without a reasonable accommodation, to perform his or her duties with the Company, any Parent Company or any Subsidiary on a full-time basis as a result of physical or mental illness or personal injury he or she has incurred, as determined by an independent physician selected with the approval of the Company, any Parent Company or any Subsidiary and the Participant.

3

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

“Fair Market Value” means, as determined by the Committee, (i) if the Common Stock is listed on the Nasdaq Stock Market, the last sale price as quoted on the Nasdaq Stock Market on the trading day immediately preceding the date for which the determination is being made or, in the event that no such sale takes place on such day, the average of the reported closing bid and asked prices on such day, or, (ii) if the Common Stock is listed on a national securities exchange, the last reported sale price on the principal national securities exchange on which the Common Stock is listed or admitted to trading on the trading day immediately preceding the date for which the determination is being made or, if no such reported sale takes place on such day, the average of the closing bid and asked prices on such day on the principal national securities exchange on which the Common Stock is listed or admitted to trading, or, (iii) if the Common Stock is not quoted on such Nasdaq Stock Market nor listed or admitted to trading on a national securities exchange, then the average of the closing bid and asked prices on the day immediately preceding the date for which the determination is being made in the over-the-counter market as reported by Nasdaq or, (iv) if bid and asked prices for the Common Stock on such day shall not have been reported through Nasdaq, the average of the bid and asked prices for such day as furnished by any New York Stock Exchange member firm regularly making a market in the Common Stock selected for such purpose by the Board or a committee thereof, or, (v) if none of the foregoing is applicable, then the fair market value of the Common Stock as determined in good faith by the Committee in its sole discretion.

“Immediate Family” shall have the meaning provided in Section 19 of the Plan.

“Incentive Stock Option” means a stock option granted under the Plan which is intended to be designated as an “incentive stock option” within the meaning of Section 422 of the Code.

“Non-Qualified Stock Option” means a stock option granted under the Plan which is not intended to be an Incentive Stock Option, including any stock option that provides (as of the time such option is granted) that it will not be treated as an Incentive Stock Option nor as an option described in Section 423(b) of the Code.

“Other Stock-Based Award” means Awards (other than Stock Options, Stock Appreciation Rights, Restricted Stock Awards, and Stock Bonus Awards) denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock and granted pursuant to Section 10.

“Outside Director” means a member of the Board who is not employed by the Company, any Parent Company or any Subsidiary.

“Parent Company” means: (i) as it relates to Incentive Stock Options, any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the granting of the Stock Option, each of the corporations other than the Company owns stock possessing 50% or more of the combined voting power of all classes of stock in one of the other corporations in the chain; and (ii) for all other purposes, any corporation (other than the Company) or other entity in an unbroken chain of corporations or other entities ending with the Company if, at the time of the granting of the Stock Option or other Award, each of the corporations or other entities other than the Company owns stock possessing 50% or more of the combined voting power of all classes of stock or other equity interests in one of the other corporations or other entities in the chain.

4

“Participant” shall mean any employee, director or officer of, or key adviser or consultant to, the Company or any Subsidiary to whom an Award is granted under the Plan.

“Plan Year” means the twelve-month period beginning on January 1 and ending on December 31; provided, however, the first Plan Year shall be the short Plan Year beginning on the Effective Date and ending on December 31, 2007.

“Restricted Stock Award” means an Award of Common Stock made pursuant to Section 8. 

“Stock Appreciation Right” means an Award made pursuant to Section 7.

“Stock Bonus Award” means an Award made pursuant to Section 9.

“Stock Option” means any option to purchase Common Stock granted pursuant to Section 6.

“Subsidiary” means: (i) as it relates to Incentive Stock Options, any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the granting of the Stock Option, 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 the chain; and (ii) for all other purposes, a corporation or other entity of which not less than 50% of the total voting power is held by the Company or by a Subsidiary, whether or not such corporation or other entity now exists or is hereafter organized or acquired by the Company or by a Subsidiary .

“Term of the Plan” means the period beginning on the Effective Date and ending on the earlier to occur of (i) the date the Plan is terminated by the Board in accordance with Section 22 and (ii) the day before the tenth anniversary of the Effective Date.

3.

Administration.

3.1.

The Plan shall be administered by the Compensation Committee of the Board or such other committee as may be appointed by the Board from time to time for the purpose of administering this Plan, or if no such committee is appointed or acting, the entire Board; provided, however, that so long as the Company has any class of equity security registered pursuant to Section 13 of the Exchange Act, and if the Plan is to be administered by a committee, then such committee shall consist of two or more members of the Board, each of whom shall each qualify as a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act and, if applicable, as an “independent director” under applicable national securities exchange or Nasdaq Stock Market rules, and also qualify as an “outside director” within the meaning of Section l62(m) of the Code and regulations pursuant thereto. For purposes of the Plan, the Board acting in this capacity or the Compensation Committee described in the preceding sentence shall be referred to as the “Committee.” The Committee shall have the power and authority to grant to eligible persons pursuant to the terms of the Plan: (1) Stock Options, (2) Stock Appreciation Rights, (3) Restricted Stock Awards, (4) Stock Bonus Awards, (5) Other Stock-Based Awards, or (6) any combination of the foregoing (collectively referred to as “Awards”).

3.2.

The Committee shall have authority in its discretion to interpret the provisions of the Plan and to decide all questions of fact arising in its application. Except as otherwise expressly provided in the Plan, the Committee shall have authority to select the persons to whom Awards shall be made under the Plan; to determine whether and to what extent Awards shall be made under the Plan; to determine the types of Award to be made and the amount, size, terms and conditions of each such Award; to determine the time when the Awards shall be granted; to determine whether, to what extent and under what circumstances Common Stock and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the Participant; to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; and to make all other determinations necessary or advisable for the administration and interpretation of the Plan. The Committee, in its sole discretion, may determine that an Award will be immediately exercisable, in whole or in part, or that all or any portion may not be exercised until a date, or dates, subsequent to its date of grant, or until the occurrence of one or more specified events, including the attainment of performance criteria, subject in any case to the terms of the Plan. If the Committee imposes conditions upon exercise, then subsequent to the date of grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the Award may be exercised. Notwithstanding anything in the Plan to the contrary, in the event that the Committee determines that it is advisable to grant Awards which shall not qualify for the exception for performance-based compensation from the tax deductibility limitations of Section 162(m) of the Code, the Committee may make such grants or Awards, or may amend the Plan to provide for such grants or Awards, without satisfying the requirements of Section 162(m) of the Code.

5

3.2.1.

Notwithstanding anything in the Plan to the contrary, the Committee also shall have authority in its sole discretion to vary the terms of the Plan to the extent necessary to comply with foreign, federal, state or local law or to meet the objectives of the Plan. The Committee may, where appropriate, establish one or more sub-plans for this purpose.

3.2.2.

All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on all persons who participate in the Plan.

3.2.3.

All expenses and liabilities incurred by the Committee in the administration and interpretation of the Plan shall be borne by the Company. The Committee may employ attorneys, consultants, accountants or other persons in connection with the administration and interpretation of the Plan. The Company, and its officers and directors, shall be entitled to rely upon the advice, opinions or valuations of any such persons.

4.

Common Stock Subject to the Plan.

4.1.

Share Reserve. Subject to the following provisions of this Section 4 and to such adjustment as may be made pursuant to Section 21, the maximum number of shares available for issuance under the Plan shall be equal to 3,615,250 shares of Common Stock. The maximum number of shares that may be issued upon the exercise of Incentive Stock Options granted under the Plan shall not exceed the limits under Code Section 422 (as adjusted pursuant to Section 21). During the terms of the Awards under the Plan, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.

4.2.

Source of Shares. Such shares may consist in whole or in part of authorized and unissued shares or treasury shares or any combination thereof as the Committee may determine. Except as otherwise provided herein, any shares subject to an option or right granted or awarded under the Plan which for any reason expires or is terminated unexercised, becomes unexercisable, or is forfeited or otherwise terminated, surrendered or cancelled as to any shares, or if any shares are not delivered because an Award under the Plan is settled in cash or the shares are used to satisfy the applicable tax withholding obligation, such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Common Stock available for issuance under the Plan and shall again become eligible for issuance under the Plan. If the exercise price of any Stock Option granted under the Plan is satisfied by tendering shares of Common Stock to the Company (whether by actual delivery or by attestation and whether or not such surrendered shares were acquired pursuant to any Award granted under the Plan), only the number of shares of Common Stock issued net of the shares of Common Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares of Common Stock available for issuance under the Plan. No Awards may be granted following the end of the Term of the Plan. 

6

5.

Eligibility to Receive Awards.

5.1.

An Award may be granted to any employee, director, or officer of, or key adviser or consultant to, the Company or any Subsidiary, who is responsible for or contributes to the management, growth or success of the Company or any Subsidiary, provided that bona fide services shall be rendered by consultants or advisers to the Company or its Subsidiaries and, unless otherwise approved by the Committee, such services must not be in connection with the offer and sale of securities in a capital-raising transaction and must not directly or indirectly promote or maintain a market for the Company’s securities. Subject to the preceding sentence and Section 6.7, the Committee shall have the sole authority to select the persons to whom an Award is to be granted hereunder and to determine what type of Award is to be granted to each such person. No person shall have any right to participate in the Plan. Any person selected by the Committee for participation during any one period will not by virtue of such participation have the right to be selected as a Participant for any other period.

5.2.

Stock Options.

5.2.1.

A Stock Option may be an Incentive Stock Option or a Non-Qualified Stock Option. Only employees of the Company or a Subsidiary are eligible to receive Incentive Stock Options. To the extent that any Stock Option does not qualify as an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock Option. Stock Options may be granted alone or in addition to other Awards granted under the Plan. Except as otherwise expressly provided in Section 6.7, the terms and conditions of each Stock Option granted under the Plan shall be specified by the Committee, in its sole discretion, and shall be set forth in a written Stock Option agreement between the Company and the Participant in such form as the Committee shall approve from time to time or as may be reasonably required in view of the terms and conditions approved by the Committee from time to time. No person shall have any rights under any Stock Option granted under the Plan unless and until the Company and the person to whom such Stock Option shall have been granted shall have executed and delivered an agreement expressly granting the Stock Option to such person and containing provisions setting forth the terms and conditions of the Stock Option. The terms and conditions of each Incentive Stock Option shall be such that each Incentive Stock Option issued hereunder shall constitute and shall be treated as an “incentive stock option” as defined in Section 422 of the Code. The terms and conditions of each Non-Qualified Stock Option will be such that each Non-Qualified Stock Option issued hereunder shall not constitute nor be treated as an “incentive stock option” as defined in Section 422 of the Code or an option described in Section 423(b) of the Code and will be a “non-qualified stock option” for federal income tax purposes. The terms and conditions of any Stock Option granted hereunder need not be identical to those of any other Stock Option granted hereunder. The Stock Option agreements shall contain in substance the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable.

7

6.

Stock Options.

6.1.

Type of Option. Each Stock Option agreement shall identify the Stock Option represented thereby as an Incentive Stock Option or a Non-Qualified Stock Option, as the case may be.

6.2.

Option Price. The Incentive Stock Option exercise price shall be fixed by the Committee but shall in no event be less than 100% (or 110% in the case of an employee referred to in Section 6.6(ii) below) of the Fair Market Value of the shares of Common Stock subject to the Incentive Stock Option on the date the Incentive Stock Option is granted. The Non-Qualified Stock Option exercise price shall be fixed by the Committee but shall in no event be less than 100% of the Fair Market Value of the shares of Common Stock subject to the Non-Qualified Stock Option at the time the Stock Option is granted.

6.3.

Exercise Term. Each Stock Option agreement shall state the period or periods of time within which the Stock Option may be exercised, in whole or in part, which shall be such period or periods of time as may be determined by the Committee, provided that no Stock Option shall be exercisable after ten years from the date of grant thereof (or, in the case of an Incentive Stock Option granted to an employee referred to in Section 6.6(ii) below, such term shall in no event exceed five years from the date on which such Incentive Stock Option is granted). The Committee shall have the power to permit an acceleration of previously established exercise upon such circumstances and subject to such terms and conditions as the Committee deems appropriate.

6.4.

Payment for Shares. A Stock Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Stock Option agreement by the Participant entitled to exercise the Stock Option and full payment for the shares of Common Stock with respect to which the Stock Option is exercised has been received by the Company. The Committee, in its sole discretion, may permit the exercise price for any Stock Option to be paid by (i) cash, certified or cashier’s check, bank draft, money order, wire transfer payable to the order of the Company, free from all collection charges; (ii) delivery of shares of Common Stock already owned by the Participant and having a Fair Market Value equal to the aggregate exercise price, or by a combination of cash and shares of Common Stock, in each case to the extent permitted by applicable law and not in violation of any instrument or agreement to which the Company is a party and, unless approved by the Committee, not resulting in a charge to the Company’s reported earnings; or (iii) delivery (including by facsimile or by electronic mail) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price and any tax withholding obligations that may arise in connection with such exercise (otherwise known as a “cashless exercise”). No shares of Common Stock shall be issued to any Participant upon exercise of a Stock Option until the Company receives full payment therefor as described above. Upon the receipt of notice of exercise and full payment for the shares of Common Stock, the shares of Common Stock shall be deemed to have been issued and the Participant shall be entitled to receive such shares of Common Stock and shall be a stockholder with respect to such shares, and the shares of Common Stock shall be considered fully paid and nonassessable. No adjustment will be made for a dividend or other right for which the record date is prior to the date on which the Common Stock is issued, except as provided in Section 21 of the Plan. Each exercise of a Stock Option shall reduce, by an equal number, the total number of shares of Common Stock that may thereafter be purchased under such Stock Option.

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6.5.

Rights upon Termination of Continuous Service. In the event that a Participant’s Continuous Service terminates for any reason, other than death or Disability, any rights of the Participant under any Stock Option shall immediately terminate; provided, however, that the Participant (or any successor or legal representative) shall have the right to exercise the Stock Option to the extent that the Stock Option was exercisable at the time of termination, until the earlier of (i) the date that is three months after the effective date of such termination of Continuous Service, or such other date as determined by the Committee in its sole discretion, or (ii) the expiration of the term of the Stock Option.

6.5.1.

Notwithstanding the foregoing, the Participant (or any successor or legal representative) shall not have any rights under any Stock Option to the extent that such Stock Option has not previously been exercised, and the Company shall not be obligated to sell or deliver shares of Common Stock (or have any other obligation or liability) under such Stock Option if the Committee shall determine in its sole discretion that the Participant’s Continuous Service shall have been terminated for “Cause” (as such term is defined in the Participant’s Stock Option agreement or employment agreement, if any), which determination shall be made in good faith. If there is a conflict between the definition of Cause as defined in the Participant’s Stock Option agreement and as defined in the Participant’s employment agreement, if any, the most restrictive definition of Cause shall apply unless the employment agreement expressly provides otherwise.

6.5.2.

In the event of such determination, the Participant (or any successor or legal representative) shall have no right under any Stock Option, to the extent that such Stock Option has not previously been exercised, to purchase any shares of Common Stock. Any Stock Option may be terminated entirely by the Committee at the time or at any time subsequent to a determination by the Committee under this Section 6.5 which has the effect of eliminating the Company’s obligation to sell or deliver shares of Common Stock under such Stock Option.

6.5.3.

In the event that a Participant’s Continuous Service terminates because such Participant dies or suffers a Disability prior to the expiration of the Stock Option and without the Participant’s having fully exercised the Stock Option, the Participant or his or her successor or legal representative shall be fully vested in the Stock Option and shall have the right to exercise the Stock Option within the next 12 months following such event, or such other period as determined by the Committee in its sole discretion, but not later than the expiration of the term of the Stock Option. 

6.6.

Special Incentive Stock Option Rules. Notwithstanding the foregoing, in the case of an Incentive Stock Option, each Stock Option agreement shall contain such other terms, conditions and provisions as the Committee determines necessary or desirable in order to qualify such Stock Option as an Incentive Stock Option under the Code including, without limitation, the following:

6.6.1.

To the extent that the aggregate Fair Market Value (determined as of the time the Stock Option is granted) of the Common Stock, with respect to which Incentive Stock Options granted under this Plan (and all other plans of the Company, any Parent Company and any Subsidiary) become exercisable for the first time by any person in any calendar year, exceeds $100,000, such Stock Options shall be treated as Non-Qualified Stock Options.

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6.6.2.

No Incentive Stock Option shall be granted to any employee if, at the time the Incentive Stock Option is granted, the employee (by reason of the attribution rules applicable under Section 424(d) of the Code) owns more than 10% of the combined voting power of all classes of stock of the Company or any Parent Company or Subsidiary unless at the time such Incentive Stock Option is granted the Stock Option exercise price is at least 110% of the Fair Market Value (determined as of the time the Incentive Stock Option is granted) of the shares of Common Stock subject to the Incentive Stock Option and such Incentive Stock Option by its terms is not exercisable after the expiration of five years from the date of grant.

If an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option shall thereafter be treated as a Non-Qualified Stock Option.

6.7.

Conversion of Director Fees. The Board may, at its sole discretion, permit an Outside Director to receive all or a portion of his or her annual retainer fee, any fees for attending meetings of the Board or committees thereof, committee chairmanship fees or any other fees payable to an Outside Director in the form of a Stock Option. The terms and conditions of such Stock Option, including (without limitation) the method for converting the annual retainer fee or any other fee payable to an Outside Director into a Stock Option, the date of grant, the vesting schedule, if any, and the time period for an Outside Director to elect such a Stock Option shall be determined solely by the Board. The Board’s decision shall be final, binding and conclusive.

7.

Stock Appreciation Rights.

7.1.

Stock Appreciation Rights entitle Participants to increases in the Fair Market Value of shares of Common Stock. The terms and conditions of each Stock Appreciation Right granted under the Plan shall be specified by the Committee, in its sole discretion, and shall be set forth in a written agreement between the Company and the Participant in such form as the Committee shall approve from time to time or as may be reasonably required in view of the terms and conditions approved by the Committee from time to time. The agreements shall contain in substance the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable.

7.2.

Award. Stock Appreciation Rights shall entitle the Participant, subject to such terms and conditions determined by the Committee, to receive upon exercise thereof an Award equal to all or a portion of the excess of: (i) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (ii) a specified price which shall not be less than 100% of the Fair Market Value of the Common Stock at the time the right is granted. Such amount may be paid by the Company in cash, Common Stock (valued at its then Fair Market Value) or any combination thereof, as the Committee may determine. In the event of the exercise of a Stock Appreciation Right that is fully or partially settled in shares of Common Stock, the number of shares reserved for issuance under this Plan shall be reduced by the number of shares issued upon exercise of the Stock Appreciation Right.

7.3.

Term. Each agreement shall state the period or periods of time within which the Stock Appreciation Right may be exercised, in whole or in part, subject to such terms and conditions prescribed for such purpose by the Committee, provided that no Stock Appreciation Right shall be exercisable after ten years from the date of grant thereof. The Committee shall have the power to permit an acceleration of previously established exercise terms upon such circumstances and subject to such terms and conditions as the Committee deems appropriate.

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7.4.

Rights upon Termination of Continuous Service. In the event that a Participant’s Continuous Service terminates for any reason, other than death or Disability, any rights of the Participant under any Stock Appreciation Right shall immediately terminate; provided, however, the Participant (or any successor or legal representative) shall have the right to exercise the Stock Appreciation Right to the extent that the Stock Appreciation Right was exercisable at the time of termination, until the earlier of (i) the date that is three months after the effective date of such termination of Continuous Service, or such other date as determined by the Committee in its sole discretion, or (ii) the expiration of the term of the Stock Appreciation Right.

7.5.

Notwithstanding the foregoing, the Participant (or any successor or legal representative) shall not have any rights under any Stock Appreciation Right, to the extent that such Stock Appreciation Right has not previously been exercised, and the Company shall not be obligated to pay or deliver any cash, Common Stock or any combination thereof (or have any other obligation or liability) under such Stock Appreciation Right if the Committee shall determine in its sole discretion that the Participant’s Continuous Service shall have been terminated for “Cause” (as such term is defined in the Participant’s Stock Appreciation Right agreement or employment agreement, if any), which determination shall be made in good faith. If there is a conflict between the definition of Cause as defined in the Participant’s Stock Appreciation Right agreement and as defined in the Participant’s employment agreement, if any, the most restrictive definition of Cause shall apply unless the employment agreement expressly provides otherwise. In the event of such determination, the Participant (or any successor or legal representative) shall have no right under such Stock Appreciation Right, to the extent that such Stock Appreciation Right has not previously been exercised. Any Stock Appreciation Right may be terminated entirely by the Committee at the time of or at any time subsequent to the determination by the Committee under this Section 7.3 which has the effect of eliminating the Company’s obligations under such Stock Appreciation Right.

7.6.

In the event that a Participant’s Continuous Service terminates because such Participant dies or suffers a Disability prior to the expiration of his or her Stock Appreciation Right and without having fully exercised his or her Stock Appreciation Right, the Participant or his or her successor or legal representative shall be fully vested in the Stock Appreciation Right and shall have the right to exercise any Stock Appreciation Right within the next 12 months following such event, or such other period as determined by the Committee in its sole discretion, but not later than the expiration of the Stock Appreciation Right.

8.

Restricted Stock Awards.

8.1.

Restricted Stock Awards shall consist of shares of Common Stock restricted against transfer (“Restricted Stock”) and subject to a substantial risk of forfeiture. The Committee may, in its sole discretion, grant Restricted Stock at no cost to a Participant or it may establish a cost (the “Purchase Price”), which may be less than or equal to the Fair Market Value of a share of Common Stock on the date of grant, for each share of Restricted Stock granted to a Participant. The terms and conditions of each Restricted Stock Award granted under the Plan shall be specified by the Committee, in its sole discretion, and shall be set forth in a written agreement between the Company and the Participant in such form as the Committee shall approve from time to time or as may be reasonably required in view of the terms and conditions approved by the Committee from time to time. The agreements shall contain in substance the following terms and conditions and may contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable.

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8.2.

Vesting Period. Restricted Stock Awards shall be subject to the restrictions described in the preceding paragraph over such vesting period as the Committee determines. To the extent the Committee deems necessary or appropriate to protect against loss of deductibility pursuant to Section 162(m) of the Code, Restricted Stock Awards to any Participant may also be subject to certain conditions with respect to attainment of one or more pre-established performance objectives which shall relate to corporate, subsidiary, division, group or unit performance in terms of growth in gross revenue, earnings per share or ratios of earnings to equity or assets, net profits, stock price, market share, sales or costs. In order to take into account unforeseen events or changes in circumstances, such objectives may be adjusted by the Committee in its sole discretion; provided, to the extent the Committee deems necessary or appropriate to protect against loss of deductibility pursuant to Section 162(m) of the Code, such objectives may not be adjusted by the Committee to increase an Award but only to reduce or eliminate an Award.

8.3.

Restriction upon Transfer. Shares awarded, and the right to vote such shares and to receive dividends thereon, may not be sold, assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered, except as herein provided or as provided in any agreement entered into between the Company and a Participant in connection with the Plan, during the vesting period applicable to such shares. Notwithstanding the foregoing, and except as otherwise provided in the Plan, the Participant shall have all the other rights of a stockholder including, but not limited to, the right to receive dividends and the right to vote such shares, until such time as the Participant disposes of the shares or forfeits the shares pursuant to the agreement relating to the Restricted Stock Award.

8.4.

Certificates. Any stock certificate issued in respect of shares awarded to a Participant shall be registered in the name of the Participant and deposited with the Company, or its designee, and shall bear the following legend:

“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE INFE - HUMAN RESOURCES, INC. 2007-2 EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND INFE - HUMAN RESOURCES, INC. RELEASE FROM SUCH TERMS AND CONDITIONS SHALL BE OBTAINED ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE PLAN AND AGREEMENT, A COPY OF EACH OF WHICH IS ON FILE IN THE OFFICE OF THE SECRETARY OF INFE - HUMAN RESOURCES, INC.”

Each Participant, as a condition of any Restricted Stock Award, shall have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award. 

8.5.

Termination of Continuous Service. Except as otherwise provided in the written agreement relating to the Participant’s Restricted Stock Award, in the event that a Participant’s Continuous Service terminates for any reason, other than death or Disability, any rights of the Participant or his or her successors or legal representatives under any Restricted Stock Award that remains subject to restrictions shall immediately terminate and any Restricted Stock Award with unlapsed restrictions shall be forfeited to the Company without payment of any consideration; provided that, if a Participant paid a Purchase Price in connection with the grant of a share of Restricted Stock, upon forfeiture of such a share of Restricted Stock the Company shall pay to the Participant, as soon as reasonably practicable following such forfeiture, the lesser of (i) the Purchase Price or (ii) the Fair Market Value of a share of Common Stock on the date of forfeiture. If an amount due to a Participant under this Section 8.4 exceeds $50,000, the Committee may, in its sole discretion, pay any amount exceeding $50,000 in a series of up to ten equal annual installments, with the first installment payment due on the first anniversary of the date of forfeiture.

Unless the written agreement between the Participant and the Company relating to the Restricted Stock Award provides otherwise, in the event that a Participant’s Continuous Service terminates because such Participant dies or suffers a Disability, all remaining shares of a Restricted Stock Award shall no longer be subject to any unlapsed restrictions.

 

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9.

Stock Bonus Awards.

9.1.

Stock Bonus Awards shall consist of Awards of shares of Common Stock. To the extent the Committee deems necessary or appropriate to protect against the loss of deductibility pursuant to Section 162(m) of the Code, the Committee may, in its sole discretion, grant a Stock Bonus Award based upon corporate, division, subsidiary, group or unit performance in terms of growth in gross revenue, earnings per share or ratios of earnings to equity or assets, net profits, stock price, market share, sales or costs or, with respect to Participants not subject to Section 162(m) of the Code, such other measures or standards determined by the Committee in its discretion. In order to take into account unforeseen events or changes in circumstances, such performance objectives may be adjusted; provided, to the extent the Committee deems necessary or appropriate to protect against loss of deductibility pursuant to Section 162(m) of the Code, such performance objectives may not be adjusted by the Committee to increase an Award but only to reduce or eliminate an Award.

9.2.

The terms and conditions of each Stock Bonus Award granted under the Plan shall be specified by the Committee, in its sole discretion, and shall be set forth in a written agreement between the Company and the Participant in such form as the Committee shall approve from time to time or as may be reasonably required in view of the terms and conditions approved by the Committee from time to time. In any event, each Stock Bonus Award agreement must provide that such Stock Bonus Award shall be payable to the Participant no later than two and one half months following the end of the calendar year in which the Participant became vested in such Stock Bonus Award in order to satisfy the short-term deferral rule applicable under Section 409A of the Code. In addition to any applicable performance goals, shares of Common Stock subject to a Stock Bonus Award may be: (i) subject to additional restrictions (including, without limitation, restrictions on transfer) or (ii) granted directly to a person free of any restrictions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable.

10.

Other Stock-Based Awards.

10.1.

Other Stock-Based Awards may be awarded, subject to limitations under applicable law and this Plan, that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, purchase rights, convertible or exchangeable debentures, or other rights convertible into shares of Common Stock and Awards valued by reference to the value of securities of or the performance of specified Subsidiaries. Other Stock-Based Awards may be awarded either alone or in addition to or in tandem with any other Awards under the Plan or any other plan of the Company. The terms and conditions of each Other Stock-Based Award granted under the Plan shall be specified by the Committee, in its sole discretion, and shall be set forth in a written agreement between the Company and the Participant in such form as the Committee shall approve from time to time or as may be reasonably required in view of the terms and conditions approved by the Committee from time to time. Each Other Stock-Based Award granted under this Plan must satisfy the requirements of, or be exempt from, Section 409A of the Code.

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10.2.

To the extent the Committee deems necessary or appropriate to protect against loss of deductibility pursuant to Section 162(m) of the Code, Other Stock-Based Awards to any Participant may also be subject to certain conditions with respect to attainment of one or more pre-established performance objectives which shall relate to corporate, subsidiary, division, group or unit performance in terms of growth in gross revenue, earnings per share or ratio of earnings to equity or assets, net profits, stock price, market share, sales or costs. In order to take into account unforeseen events or changes in circumstances, such performance objectives may be adjusted; provided, to the extent the Committee deems necessary or appropriate to protect against loss of deductibility pursuant to Section 162(m) of the Code, such performance objectives may not be adjusted by the Committee to increase an Award but only to reduce or eliminate an Award.

11.

Loans.

11.1.

The Committee may, in its sole discretion and to further the purpose of the Plan, provide for loans to persons in connection with all or any part of an Award under the Plan. Any loan made pursuant to this Section 11 shall be evidenced by a loan agreement, promissory note or other instrument in such form and which shall contain such terms and conditions (including without limitation, provisions for interest, payment, schedules, collateral, forgiveness, acceleration of such loans or parts thereof or acceleration in the event of termination) as the Committee shall prescribe from time to time. Notwithstanding the foregoing, each loan shall comply with all applicable laws, regulations and rules of the Board of Governors of the Federal Reserve System and any other governmental agency having jurisdiction.

12.

Securities Laws

12.1.

Securities Law Requirements. No shares of Common Stock shall be issued upon the exercise or payment of any Award unless and until:

12.1.1.

The shares of Common Stock underlying the Award have been registered under the Securities Act of 1933, as amended (the “Act”), or the Company has determined that an exemption from the registration requirements under the Act is available or the registration requirements of the Act do not apply to such exercise or payment;

12.1.2.

The Company has determined that all applicable listing requirements of any stock exchange or quotation system on which the shares of Common Stock are listed have been satisfied; and

12.1.3.

The Company has determined that any other applicable provision of state or Federal law, including without limitation applicable state securities laws, has been satisfied.

13.

Restrictions on Transfer; Representations of Participant; Legends.

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13.1.

Regardless of whether the offering and sale of shares of Common Stock has been registered under the Act or has been registered or qualified under the securities laws of any state, the Company may impose restrictions upon the sale, pledge, or other transfer of such shares, including the placement of appropriate legends on stock certificates, if, in the judgment of the Company and its counsel, such restrictions are necessary or desirable in order to achieve compliance with the provisions of the Act, the securities laws of any state, or any other law. As a condition to the Participant’s receipt of shares, the Company may require the Participant to represent that such shares are being acquired for investment, and not with a view to the sale or distribution thereof, except in compliance with the Act, and to make such other representations as are deemed necessary or appropriate by the Company and its counsel. Stock certificates evidencing shares acquired pursuant to an unregistered transaction to which the Act applies shall bear a restrictive legend substantially in the following form and such other restrictive legends as are required or deemed advisable under the Plan or the provisions of any applicable law:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR WITHOUT AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.”

13.2.

The Company may, but shall not be obligated to, register or qualify the sale of shares under the Act or other applicable law. In the event of a public offering of Common Stock or any other securities of the Company, it may be necessary for the Company to restrict for a period of time (during or following the offering process) the transfer of shares of Common Stock issued to a Participant under the Plan (including any securities issued with respect to such shares in accordance with Section 21 of the Plan). As a condition to the Participant’s receipt of shares, the Committee may require the Participant to agree not to effect any sale, transfer, pledge or other disposal of the Participant’s shares during such time and agree to execute any “lock-up letter” or similar agreement requested by the Company or its underwriters. Any determination by the Company and its counsel in connection with any of the matters set forth in this Section 13 shall be conclusive and binding on all persons.

14.

Single or Multiple Agreements.

Multiple forms of Awards or combinations thereof may be evidenced by a single agreement or multiple agreements, as determined by the Committee.

15.

Rights of a Stockholder.

The recipient of any Award under the Plan, unless otherwise expressly provided by the Plan, shall have no rights as a stockholder with respect thereto unless and until shares of Common Stock are issued to him.

16.

No Right to Continue Employment or Service. 

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Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company, Parent Company or any Subsidiary in the capacity in effect at the time the Award was granted or shall affect the right of the Company, Parent Company or any Subsidiary to terminate (i) the employment of an employee with or without notice and with or without cause, (ii) the service of a consultant or adviser pursuant to the terms of such consultant’s or adviser’s agreement with the Company, Parent Company or any Subsidiary, if any or (iii) the service of a director pursuant to the Bylaws of the Company, Parent Company or any Subsidiary and any applicable provisions of the corporate law of the state in which the Company, Parent Company or any Subsidiary is incorporated, as the case may be.

17.

Withholding.

The Company’s obligations hereunder in connection with any Award shall be subject to applicable foreign, federal, state and local withholding tax requirements. Foreign, federal, state and local withholding tax due under the terms of the Plan may be paid in cash or shares of Common Stock (either through the surrender of already-owned shares of Common Stock that the Participant has held for the period required to avoid a charge to the Company’s reported earnings or the withholding of shares of Common Stock otherwise issuable upon the exercise or payment of such Award) having a Fair Market Value equal to the required withholding and upon such other terms and conditions as the Committee shall determine; provided, however, the Committee, in its sole discretion, may require that such taxes be paid in cash; and provided, further, any election by a Participant subject to Section 16(b) of the Exchange Act to pay his or her withholding tax in shares of Common Stock shall be subject to and must comply with Rule 16b-3 of the Exchange Act.

18.

Indemnification.

No member of the Board or the Committee, nor any officer or employee of the Company or Parent Company or Subsidiary acting on behalf of the Board or the Committee, shall be personally liable for any action, determination or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each and any officer or employee of the Company or any Parent Company or any Subsidiary acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.

19.

Non-Assignability.

19.1.

No right or benefit hereunder shall in any manner be subject to the debts, contracts, liabilities or torts of the person entitled to such right or benefit. No Award under the Plan shall be assignable or transferable by the Participant except by will, by the laws of descent and distribution and by such other means as the Committee may approve from time to time, and all Awards shall be exercisable, during the Participant’s lifetime, only by the Participant.

19.2.

However, the Participant, with the approval of the Committee, may transfer a Non-Qualified Stock Option for no consideration to or for the benefit of the Participant’s Immediate Family (including, without limitation, to a trust for the benefit of the Participant’s Immediate Family or to a partnership or limited liability company for one or more members of the Participant’s Immediate Family), subject to such limits as the Committee may establish, and the transferee shall remain subject to all the terms and conditions applicable to the Non-Qualified Stock Option prior to such transfer. The foregoing right to transfer a Non-Qualified Stock Option shall apply to the right to consent to amendments to the Stock Option agreement and, in the discretion of the Committee, shall also apply to the right to transfer ancillary rights associated with the Non-Qualified Stock Option. The term “Immediate Family” shall mean the Participant’s spouse, parents, children, stepchildren, adoptive relationships, sisters, brothers and grandchildren (and, for this purpose, shall also include the Participant). 

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19.3.

At the request of the Participant and subject to the approval of the Committee, Common Stock purchased upon exercise of a Non-Qualified Stock Option may be issued or transferred into the name of the Participant and his or her spouse jointly with rights of survivorship.

19.4.

Except as set forth above or in a Stock Option agreement, any attempted assignment, sale, transfer, pledge, mortgage, encumbrance, hypothecation, or other disposition of an Award under the Plan contrary to the provisions hereof, or the levy of any execution, attachment, or similar process upon an Award under the Plan shall be null and void and without effect.

20.

Non-Uniform Determinations.

The Committee’s determinations under the Plan (including without limitation determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same, and the establishment of values and performance targets) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

21.

Adjustments.

In the event of any change in the outstanding shares of Common Stock, without the receipt of consideration by the Company, by reason of a stock dividend, stock split, reverse stock split or distribution, recapitalization, merger, reorganization, reclassification, consolidation, split-up, spin-off, combination of shares, exchange of shares or other change in corporate structure affecting the Common Stock and not involving the receipt of consideration by the Company, the Committee shall make appropriate adjustments in (a) the aggregate number of shares of Common Stock (i) available for issuance under the Plan, (ii) for which grants or Awards may be made to any Participant or to any group of Participants (e.g., Outside Directors), (iii) which are available for issuance under Incentive Stock Options, (iv) covered by outstanding unexercised Awards and grants denominated in shares or units of Common Stock, and (v) underlying Stock Options granted pursuant to Section 6.7, (b) the exercise or other applicable price related to outstanding Awards or grants and (c) the appropriate Fair Market Value and other price determinations relevant to outstanding Awards or grants and shall make such other adjustments as may be appropriate under the circumstances; provided, that the number of shares subject to any Award or grant always shall be a whole number.

22.

Termination and Amendment.

The Board may terminate or amend the Plan or any portion thereof at any time and the Committee may amend the Plan to the extent provided in Section 3, without approval of the stockholders of the Company, unless stockholder approval is required by Rule 16b-3 of the Exchange Act, applicable stock exchange or NASDAQ or other quotation system rules, applicable Code provisions, or other applicable laws or regulations. No amendment, termination or modification of the Plan shall affect any Award theretofore granted in any material adverse way without the consent of the recipient.

17

23.

Severability.

If any of the terms or provisions of this Plan, or Awards made under this Plan, conflict with the requirements of Section 162(m) or Section 422 of the Code with respect to Awards subject to or governed by Section 162(m) or Section 422 of the Code, then such terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Section 162(m) or Section 422 of the Code. With respect to an Incentive Stock Option, if this Plan does not contain any provision required to be included herein under Section 422 of the Code (as the same shall be amended from time to time), such provision shall be deemed to be incorporated herein with the same force and effect as if such provision had been set out herein. If any provision of the Plan is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, and the Plan shall be reformed, construed and enforced in such jurisdiction so as to best give effect to the intent of the Company under the Plan.

24.

Effect on Other Plans.

Participation in this Plan shall not affect an employee’s eligibility to participate in any other benefit or incentive plan of the Company or any Subsidiary and any Awards made pursuant to this Plan shall not be used in determining the benefits provided under any other plan of the Company or any Subsidiary unless specifically provided.

25.

Effective Date of the Plan.

The Plan shall become effective on the Effective Date, subject to approval of the stockholders of the Company within twelve months after the Effective Date.

26.

Governing Law.

This Plan and all agreements executed in connection with the Plan shall be governed by, and construed in accordance with, the laws of the State of Nevada, without regard to its conflicts of law doctrine.

27.

Gender and Number.

Words denoting the masculine gender shall include the feminine gender, and words denoting the feminine gender shall include the masculine gender. Words in the plural shall include the singular, and the singular shall include the plural.

28.

Acceleration of Exercisability and Vesting.

The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.

29.

Modification of Awards.

Within the limitations of the Plan and subject to Sections 21 and 34, the Committee may modify outstanding Awards or accept the cancellation of outstanding Awards for the granting of new Awards in substitution therefore. Notwithstanding the preceding sentence, except for any adjustment described in Section 21 or 34, no modification of an Award shall, without the consent of the Participant, alter or impair any rights or obligations under any Award previously granted under the Plan in any material adverse way without the affected Participant’s consent. For purposes of the preceding sentence, any modification to any of the following terms or conditions of an outstanding unexercised Award or grant shall be deemed to be a material modification: (i) the number of shares of Common Stock covered by such Award or grant, (ii) the exercise or other applicable price or Fair Market Value determination related to such Award or grant, (iii) the period of time within which the Award or grant vests and is exercisable and the terms and conditions of such vesting and exercise, (iv) the type of Award or Stock Option, and (v) the restrictions on transferability of the Award or grant and of any shares of Common Stock issued in connection with such Award or grant (including the Company’s right of repurchase, if any).

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30.

No Strict Construction.

No rule of strict construction shall be applied against the Company, the Committee, or any other person in the interpretation of any of the terms of the Plan, any agreement executed in connection with the Plan, any Award granted under the Plan, or any rule, regulation or procedure established by the Committee.

31.

Successors.

This Plan is binding on and will inure to the benefit of any successor to the Company, whether by way of merger, consolidation, purchase, or otherwise.

32.

Plan Provisions Control.

The terms of the Plan govern all Awards granted under the Plan, and in no event will the Committee have the power to grant any Award under the Plan which is contrary to any of the provisions of the Plan. In the event any provision of any Award granted under the Plan shall conflict with any term in the Plan, the term in the Plan shall control.

33.

Headings.

The headings used in the Plan are for convenience only, do not constitute a part of the Plan, and shall not be deemed to limit, characterize, or affect in any way any provisions of the Plan, and all provisions of the Plan shall be construed as if no captions had been used in the Plan.

34.

Change in Control.

In the event of a Change in Control, each Participant shall have the rights set forth in his individual Award agreement or such other rights as may be determined by the incumbent Board, in its sole discretion, prior to the Change in Control.

35.

Compliance with Section 409A of the Code.

All Awards granted hereunder shall be granted in compliance with, or shall be structured to be exempt from, the provisions of Section 409A of the Code. Notwithstanding anything to the contrary in the Plan, any and all Awards, payments, distributions, deferral elections, transactions and any other actions or arrangements made or entered into pursuant to the Plan shall remain subject at all times to compliance with the requirements of Section 409A of the Code. If the Committee determines that an Award, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to Section 409A of the Code, such Award, payment, distribution, deferral election, transaction or other action or arrangement shall not be undertaken and the related provisions of the Plan shall be deemed modified or, if necessary, rescinded in order to comply with the requirements of Section 409A of the Code to the extent determined by the Committee. Notwithstanding the foregoing, with respect to any Award granted hereunder that is payable upon vesting and intended to be exempt from the requirements of Section 409A of the Code, such payment shall be made paid or otherwise settled as soon as administratively feasible after the Award becomes vested but in no event later than two and a half months after the end of the year in which such vesting occurs to satisfy the exemption from Section 409A of the Code for short-term deferrals of compensation. To the extent required in order to avoid the imposition of any interest and/or additional tax under Section 409A(a)(1)(B) of the Code, any payments or deliveries due upon the Participant’s termination of Continuous Service may be delayed for six months if a Participant is deemed to be a “specified employee” as defined by Section 409A(a)(2)(i)(B) of the Code.

CERTIFICATE

I, Arthur Viola, Secretary of Infe - Human Resources, Inc.  hereby certify that the attached document is a correct copy of the Infe - Human Resources, Inc. 2007-2 Equity Incentive Plan, as effective September 21, 2007.

Dated this 21 day of September, 2007.

 

_______________________________________________________

Secretary

(Corporate Seal)

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