Document:

EXHIBIT 10.14

                          REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of August 31,
2005, by and among Innofone.com, Inc., a Nevada corporation, with headquarters
located at 3470 Onley-Laytonsville Road, Suite 118, Olney, MD 20832 (the
"COMPANY"), and each of the undersigned (together with their respective
affiliates and any assignee or transferee of all of their respective rights
hereunder, the "INITIAL INVESTORS").

     WHEREAS:

     A. In connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the "Securities Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions contained
therein, to issue and sell to the Initial Investors (i) secured convertible
notes in the aggregate principal amount of up to Four Million Five Hundred
Thousand Dollars ($4,500,000) (the "Notes") that are convertible into shares of
the Company's common stock (the "Common Stock"), upon the terms and subject to
the limitations and conditions set forth in such Notes and (ii) warrants (the
"Warrants") to acquire an aggregate of 1,000,000 shares of Common Stock, upon
the terms and conditions and subject to the limitations and conditions set forth
in the Warrants; and

     B. To induce the Initial Investors to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the
Initial Investors hereby agree as follows:

          1. DEFINITIONS.

               a. As used in this Agreement, the following terms shall have the
following meanings:

                    (i) "INVESTORS" means the Initial Investors and any
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof.

                    (ii) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("RULE 415"), and the declaration or ordering of effectiveness of such
Registration Statement by the United States Securities and Exchange Commission
(the "SEC").

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                    (iii) "REGISTRABLE SECURITIES" means the Conversion Shares
issued or issuable upon conversion or otherwise pursuant to the Notes and
Additional Notes (as defined in the Securities Purchase Agreement) including,
without limitation, Damages Shares (as defined in the Notes) issued or issuable
pursuant to the Notes, shares of Common Stock issued or issuable in payment of
the Standard Liquidated Damages Amount (as defined in the Securities Purchase
Agreement), shares issued or issuable in respect of interest or in redemption of
the Notes in accordance with the terms thereof) and Warrant Shares issuable,
upon exercise or otherwise pursuant to the Warrants and Additional Warrants (as
defined in the Securities Purchase Agreement), and any shares of capital stock
issued or issuable as a dividend on or in exchange for or otherwise with respect
to any of the foregoing.

                    (iv) "REGISTRATION STATEMENT" means a registration statement
of the Company under the 1933 Act.

               b. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement or the Convertible Note.

          2. REGISTRATION.

               a. MANDATORY REGISTRATION. The Company shall prepare, and, on or
prior to sixty (60) days from the date of Closing (as defined in the Securities
Purchase Agreement) (the "FILING DATE"), file with the SEC a Registration
Statement on Form S-3 (or, if Form S-3 is not then available, on such form of
Registration Statement as is then available to effect a registration of the
Registrable Securities, subject to the consent of the Initial Investors, which
consent will not be unreasonably withheld) covering the resale of the
Registrable Securities underlying the Notes and Warrants issued or issuable
pursuant to the Securities Purchase Agreement, which Registration Statement, to
the extent allowable under the 1933 Act and the rules and regulations
promulgated thereunder (including Rule 416), shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon conversion of or otherwise pursuant to the
Notes and exercise of the Warrants to prevent dilution resulting from stock
splits, stock dividends or similar transactions. The number of shares of Common
Stock initially included in such Registration Statement shall be no less than an
amount equal to two (2) times the sum of the number of Conversion Shares that
are then issuable upon conversion of the Notes and Additional Notes (based on
the Variable Conversion Price as would then be in effect and assuming the
Variable Conversion Price is the Conversion Price at such time), and the number
of Warrant Shares that are then issuable upon exercise of the Warrants, without
regard to any limitation on the Investor's ability to convert the Notes or
exercise the Warrants. The Company acknowledges that the number of shares
initially included in the Registration Statement represents a good faith
estimate of the maximum number of shares issuable upon conversion of the Notes
and upon exercise of the Warrants.

               b. UNDERWRITTEN OFFERING. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves an underwritten
offering, the Investors who hold a majority in interest of the Registrable
Securities subject to such underwritten offering, with the consent of a
majority-in-interest of the Initial Investors, shall have the right to select
one legal counsel and an investment banker or bankers and manager or managers to
administer the offering, which investment banker or bankers or manager or
managers shall be reasonably satisfactory to the Company.

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<PAGE>

               c. PAYMENTS BY THE COMPANY. The Company shall use its best
efforts to obtain effectiveness of the Registration Statement as soon as
practicable. If (i) the Registration Statement(s) covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a) hereof
is not filed by the Filing Date or declared effective by the SEC on or prior to
one hundred and twenty (120) days from the date of Closing (as defined in the
Securities Purchase Agreement or 180 days if the SEC is reviewing the
Registration Statement and the Company is using its best efforts to respond to
such comments), or (ii) after the Registration Statement has been declared
effective by the SEC, sales of all of the Registrable Securities cannot be made
pursuant to the Registration Statement, or (iii) the Common Stock is not listed
or included for quotation on the Nasdaq National Market ("NASDAQ"), the Nasdaq
SmallCap Market ("NASDAQ SMALLCAP"), the New York Stock Exchange (the "NYSE") or
the American Stock Exchange (the "AMEX") after being so listed or included for
quotation, or (iv) the Common Stock ceases to be traded on the Over-the-Counter
Bulletin Board (the "OTCBB") or any equivalent replacement exchange prior to
being listed or included for quotation on one of the aforementioned markets,
then the Company will make payments to the Investors in such amounts and at such
times as shall be determined pursuant to this Section 2(c) as partial relief for
the damages to the Investors by reason of any such delay in or reduction of
their ability to sell the Registrable Securities (which remedy shall not be
exclusive of any other remedies available at law or in equity). The Company
shall pay to each holder of the Notes or Registrable Securities an amount equal
to the then outstanding principal amount of the Notes (and, in the case of
holders of Registrable Securities, the principal amount of Notes from which such
Registrable Securities were converted) ("OUTSTANDING PRINCIPAL AMOUNT"),
multiplied by the Applicable Percentage (as defined below) times the sum of: (i)
the number of months (prorated for partial months) after the Filing Date or the
end of the aforementioned one hundred and five (120) or (180) day period as
provided above and prior to the date the Registration Statement is declared
effective by the SEC, provided, however, that there shall be excluded from such
period any delays which are solely attributable to changes required by the
Investors in the Registration Statement with respect to information relating to
the Investors, including, without limitation, changes to the plan of
distribution, or to the failure of the Investors to conduct their review of the
Registration Statement pursuant to Section 3(h) below in a reasonably prompt
manner; (ii) the number of months (prorated for partial months) that sales of
all of the Registrable Securities cannot be made pursuant to the Registration
Statement after the Registration Statement has been declared effective
(including, without limitation, when sales cannot be made by reason of the
Company's failure to properly supplement or amend the prospectus included
therein in accordance with the terms of this Agreement, but excluding any days
during an Allowed Delay (as defined in Section 3(f)); and (iii) the number of
months (prorated for partial months) that the Common Stock is not listed or
included for quotation on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX or
that trading thereon is halted after the Registration Statement has been
declared effective. The term "APPLICABLE PERCENTAGE" means two hundredths (.02).
If thereafter, sales could not be made pursuant to the Registration Statement
for an additional period of one (1) month, the Company would pay an additional
$5,000 for each $250,000 of Outstanding Principal Amount.) Such amounts shall be
paid in cash or, at the Company's option, in shares of Common Stock priced at
the Conversion Price (as defined in the Notes) on such payment date.

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               d. PIGGY-BACK REGISTRATIONS. Subject to the last sentence of this
Section 2(d), if at any time prior to the expiration of the Registration Period
(as hereinafter defined) the Company shall determine to file with the SEC a
Registration Statement relating to an offering for its own account or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 or their then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or business
or equity securities issuable in connection with stock option or other bona
fide, employee benefit plans), the Company shall send to each Investor who is
entitled to registration rights under this Section 2(d) written notice of such
determination and, if within fifteen (15) days after the effective date of such
notice, such Investor shall so request in writing, the Company shall include in
such Registration Statement all or any part of the Registrable Securities such
Investor requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the managing
underwriter(s) thereof shall impose a limitation on the number of shares of
Common Stock which may be included in the Registration Statement because, in
such underwriter(s)' judgment, marketing or other factors dictate such
limitation is necessary to facilitate public distribution, then the Company
shall be obligated to include in such Registration Statement only such limited
portion of the Registrable Securities with respect to which such Investor has
requested inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable Securities shall be made pro rata among the Investors seeking to
include Registrable Securities in proportion to the number of Registrable
Securities sought to be included by such Investors; provided, however, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to inclusion of such securities in such Registration Statement or are not
entitled to pro rata inclusion with the Registrable Securities; and provided,
further, however, that, after giving effect to the immediately preceding
proviso, any exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such securities in the
Registration Statement other than holders of securities entitled to inclusion of
their securities in such Registration Statement by reason of demand registration
rights. No right to registration of Registrable Securities under this Section
2(d) shall be construed to limit any registration required under Section 2(a)
hereof. If an offering in connection with which an Investor is entitled to
registration under this Section 2(d) is an underwritten offering, then each
Investor whose Registrable Securities are included in such Registration
Statement shall, unless otherwise agreed by the Company, offer and sell such
Registrable Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same terms
and conditions as other shares of Common Stock included in such underwritten
offering. Notwithstanding anything to the contrary set forth herein, the
registration rights of the Investors pursuant to this Section 2(d) shall only be
available in the event the Company fails to timely file, obtain effectiveness or
maintain effectiveness of any Registration Statement to be filed pursuant to
Section 2(a) in accordance with the terms of this Agreement.

               e. ELIGIBILITY FOR FORM S-3, SB-2 OR S-1; CONVERSION TO FORM S-3.
The Company represents and warrants that it meets the requirements for the use
of Form S-3, SB-2 or S-1 for registration of the sale by the Initial Investors
and any other Investors of the Registrable Securities. The Company agrees to
file all reports required to be filed by the Company with the SEC in a timely
manner so as to remain eligible or become eligible, as the case may be, and
thereafter to maintain its eligibility, for the use of Form S-3. If the Company
is not currently eligible to use Form S-3, not later than five (5) business days
after the Company first meets the registration eligibility and transaction
requirements for the use of Form S-3 (or any successor form) for registration of
the offer and sale by the Initial Investors and any other Investors of
Registrable Securities, the Company shall file a Registration Statement on Form
S-3 (or such successor form) with respect to the Registrable Securities covered
by the Registration Statement on Form SB-2 or Form S-1, whichever is applicable,
filed pursuant to Section 2(a) (and include in such Registration Statement on
Form S-3 the information required by Rule 429 under the 1933 Act) or convert the
Registration Statement on Form SB-2 or Form S-1, whichever is applicable, filed
pursuant to Section 2(a) to a Form S-3 pursuant to Rule 429 under the 1933 Act
and cause such Registration Statement (or such amendment) to be declared
effective no later than sixty (60) days after filing. In the event of a breach
by the Company of the provisions of this Section 2(e), the Company will be
required to make payments pursuant to Section 2(c) hereof.

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<PAGE>

          3. OBLIGATIONS OF THE COMPANY.

     In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:

               a. The Company shall prepare promptly, and file with the SEC not
later than the Filing Date, a Registration Statement with respect to the number
of Registrable Securities provided in Section 2(a), and thereafter use its best
efforts to cause such Registration Statement relating to Registrable Securities
to become effective as soon as possible after such filing but in no event later
than one hundred and twenty (120) days from the date of Closing unless the SEC
is reviewing the Registration Statement and the Company is using its best
efforts to respond to such comments in which event the Registration Statement
must go effective within 180 days), and keep the Registration Statement
effective pursuant to Rule 415 at all times until such date as is the earlier of
(i) the date on which all of the Registrable Securities have been sold and (ii)
the date on which the Registrable Securities (in the opinion of counsel to the
Initial Investors) may be immediately sold to the public without registration or
restriction (including, without limitation, as to volume by each holder thereof)
under the 1933 Act (the "REGISTRATION PERIOD"), which Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein not misleading.

               b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statements and the prospectus used in connection with the
Registration Statements as may be necessary to keep the Registration Statements
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the Registration Statements
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statements. In the event the number of
shares available under a Registration Statement filed pursuant to this Agreement
is insufficient to cover all of the Registrable Securities issued or issuable
upon conversion of the Notes and exercise of the Warrants, the Company shall
amend the Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover all of
the Registrable Securities, in each case, as soon as practicable, but in any
event within fifteen (15) days after the necessity therefor arises (based on the
market price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely). The Company shall use its best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof, but in any event within thirty (30)
days after the date on which the Company reasonably first determines (or
reasonably should have determined) the need therefor. The provisions of Section
2(c) above shall be applicable with respect to such obligation, with the one
hundred and twenty (120) days running from the day the Company reasonably first
determines (or reasonably should have determined) the need therefor.

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               c. The Company shall furnish to each Investor whose Registrable
Securities are included in a Registration Statement and its legal counsel (i)
promptly (but in no event more than two (2) business days) after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one copy of each Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or supplement thereto,
and, in the case of the Registration Statement referred to in Section 2(a), each
letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment), and (ii) promptly (but in no event more than two (2) business days)
after the Registration Statement is declared effective by the SEC, such number
of copies of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents as such Investor may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor. The Company will immediately notify each
Investor by facsimile of the effectiveness of each Registration Statement or any
post-effective amendment. The Company will promptly (but in no event more than
five (5) business days) respond to any and all comments received from the SEC
(which comments shall promptly be made available to the Investors upon request),
with a view towards causing each Registration Statement or any amendment thereto
to be declared effective by the SEC as soon as practicable, shall promptly file
an acceleration request as soon as practicable (but in no event more than two
(2) business days) following the resolution or clearance of all SEC comments or,
if applicable, following notification by the SEC that any such Registration
Statement or any amendment thereto will not be subject to review and shall
promptly file with the SEC a final prospectus as soon as practicable (but in no
event more than two (2) business days) following receipt by the Company from the
SEC of an order declaring the Registration Statement effective. In the event of
a breach by the Company of the provisions of this Section 3(c), the Company will
be required to make payments pursuant to Section 2(c) hereof.

               d. The Company shall use reasonable efforts to (i) register and
qualify the Registrable Securities covered by the Registration Statements under
such other securities or "blue sky" laws of such jurisdictions in the United
States as the Investors who hold a majority in interest of the Registrable
Securities being offered reasonably request, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (b) subject itself
to general taxation in any such jurisdiction, (c) file a general consent to
service of process in any such jurisdiction, (d) provide any undertakings that
cause the Company undue expense or burden, or (e) make any change in its charter
or bylaws, which in each case the Board of Directors of the Company determines
to be contrary to the best interests of the Company and its shareholders.

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               e. In the event Investors who hold a majority-in-interest of the
Registrable Securities being offered in the offering (with the approval of a
majority-in-interest of the Initial Investors) select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering.

               f. As promptly as practicable after becoming aware of such event,
the Company shall notify each Investor of the happening of any event, of which
the Company has knowledge, as a result of which the prospectus included in any
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and use its best
efforts promptly to prepare a supplement or amendment to any Registration
Statement to correct such untrue statement or omission, and deliver such number
of copies of such supplement or amendment to each Investor as such Investor may
reasonably request; provided that, for not more than ten (10) consecutive
trading days (or a total of not more than twenty (20) trading days in any twelve
(12) month period), the Company may delay the disclosure of material non-public
information concerning the Company (as well as prospectus or Registration
Statement updating) the disclosure of which at the time is not, in the good
faith opinion of the Company, in the best interests of the Company (an "ALLOWED
DELAY"); provided, further, that the Company shall promptly (i) notify the
Investors in writing of the existence of (but in no event, without the prior
written consent of an Investor, shall the Company disclose to such investor any
of the facts or circumstances regarding) material non-public information giving
rise to an Allowed Delay and (ii) advise the Investors in writing to cease all
sales under such Registration Statement until the end of the Allowed Delay. Upon
expiration of the Allowed Delay, the Company shall again be bound by the first
sentence of this Section 3(f) with respect to the information giving rise
thereto.

               g. The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of any Registration
Statement, and, if such an order is issued, to obtain the withdrawal of such
order at the earliest possible moment and to notify each Investor who holds
Registrable Securities being sold (or, in the event of an underwritten offering,
the managing underwriters) of the issuance of such order and the resolution
thereof.

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               h. The Company shall permit a single firm of counsel designated
by the Initial Investors to review such Registration Statement and all
amendments and supplements thereto (as well as all requests for acceleration or
effectiveness thereof) a reasonable period of time prior to their filing with
the SEC, and not file any document in a form to which such counsel reasonably
objects and will not request acceleration of such Registration Statement without
prior notice to such counsel. The sections of such Registration Statement
covering information with respect to the Investors, the Investor's beneficial
ownership of securities of the Company or the Investors intended method of
disposition of Registrable Securities shall conform to the information provided
to the Company by each of the Investors.

               i. The Company shall make generally available to its security
holders as soon as practicable, but not later than one hundred and twenty (120)
days after the close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration Statement.

               j. At the request of any Investor, the Company shall furnish, on
the date that Registrable Securities are delivered to an underwriter, if any,
for sale in connection with any Registration Statement or, if such securities
are not being sold by an underwriter, on the date of effectiveness thereof (i)
an opinion, dated as of such date, from counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
underwriters, if any, and the Investors and (ii) a letter, dated such date, from
the Company's independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters, if any, and
the Investors.

               k. The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to a
Registration Statement, (iii) one firm of attorneys and one firm of accountants
or other agents retained by the Initial Investors, (iv) one firm of attorneys
and one firm of accountants or other agents retained by all other Investors, and
(v) one firm of attorneys retained by all such underwriters (collectively, the
"INSPECTORS") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company, including without limitation, records
of conversions by other holders of convertible securities issued by the Company
and the issuance of stock to such holders pursuant to the conversions
(collectively, the "RECORDS"), as shall be reasonably deemed necessary by each
Inspector to enable each Inspector to exercise its due diligence responsibility,
and cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request for purposes of such due
diligence; provided, however, that each Inspector shall hold in confidence and
shall not make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement, (b) the release of such Records is ordered pursuant
to a subpoena or other order from a court or government body of competent
jurisdiction, or (c) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such Inspector
shall have entered into confidentiality agreements (in form and substance
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(k). Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investor's ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

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               l. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information concerning an
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor prior
to making such disclosure, and allow the Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

               m. The Company shall (i) cause all the Registrable Securities
covered by the Registration Statement to be listed on each national securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) to the extent the securities
of the same class or series are not then listed on a national securities
exchange, secure the designation and quotation, of all the Registrable
Securities covered by the Registration Statement on Nasdaq or, if not eligible
for Nasdaq, on Nasdaq SmallCap or, if not eligible for Nasdaq or Nasdaq
SmallCap, on the OTCBB and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register with the National Association
of Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities.

               n. The Company shall provide a transfer agent and registrar,
which may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.

               o. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an instruction in the
form attached hereto as EXHIBIT 1 and an opinion of such counsel in the form
attached hereto as EXHIBIT 2.

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               p. At the request of the holders of a majority-in-interest of the
Registrable Securities, the Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and any prospectus used in connection with the
Registration Statement as may be necessary in order to change the plan of
distribution set forth in such Registration Statement.

               q. From and after the date of this Agreement, the Company shall
not, and shall not agree to, allow the holders of any securities of the Company
to include any of their securities in any Registration Statement under Section
2(a) hereof or any amendment or supplement thereto under Section 3(b) hereof
without the consent of the holders of a majority-in-interest of the Registrable
Securities.

               r. The Company shall take all other reasonable actions necessary
to expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to a Registration Statement.

          4. OBLIGATIONS OF THE INVESTORS.

     In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:

               a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request. At least three (3)
business days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Investor of the information the Company
requires from each such Investor.

               b. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statements hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statements.

               c. In the event Investors holding a majority-in-interest of the
Registrable Securities being registered (with the approval of the Initial
Investors) determine to engage the services of an underwriter, each Investor
agrees to enter into and perform such Investor's obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of the
Registrable Securities, unless such Investor has notified the Company in writing
of such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.

                                       10
<PAGE>

               d. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or
3(g), such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(f) or 3(g) and, if so directed by
the Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

               e. No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form entered into by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions and any expenses in excess of those payable by the
Company pursuant to Section 5 below.

          5. EXPENSES OF REGISTRATION.

     All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees, the fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel selected by the Initial Investors pursuant to Sections 2(b) and 3(h)
hereof shall be borne by the Company.

          6. INDEMNIFICATION.

     In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

               a. To the extent permitted by law, the Company will indemnify,
hold harmless and defend (i) each Investor who holds such Registrable
Securities, (ii) the directors, officers, partners, employees, agents and each
person who controls any Investor within the meaning of the 1933 Act or the
Securities Exchange Act of 1934, as amended (the "1934 ACT"), if any, (iii) any
underwriter (as defined in the 1933 Act) for the Investors, and (iv) the
directors, officers, partners, employees and each person who controls any such
underwriter within the meaning of the 1933 Act or the 1934 Act, if any (each, an
"INDEMNIFIED PERSON"), against any joint or several losses, claims, damages,
liabilities or expenses (collectively, together with actions, proceedings or
inquiries by any regulatory or self-regulatory organization, whether commenced
or threatened, in respect thereof, "CLAIMS") to which any of them may become
subject insofar as such Claims arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not
misleading; (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date

                                       11
<PAGE>

of such Registration Statement, or contained in the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein any
material fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading; or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). Subject to the restrictions set forth in
Section 6(c) with respect to the number of legal counsel, the Company shall
reimburse the Indemnified Person, promptly as such expenses are incurred and are
due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Person
or underwriter for such Indemnified Person expressly for use in connection with
the preparation of such Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (ii) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld; and
(iii) with respect to any preliminary prospectus, shall not inure to the benefit
of any Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof, and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.

               b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees severally and not jointly
to indemnify, hold harmless and defend, to the same extent and in the same
manner set forth in Section 6(a), the Company, each of its directors, each of
its officers who signs the Registration Statement, each person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act, any
underwriter and any other shareholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person who
controls such shareholder or underwriter within the meaning of the 1933 Act or
the 1934 Act (collectively and together with an Indemnified Person, an
"INDEMNIFIED PARTY"), against any Claim to which any of them may become subject,
under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim arises out
of or is based upon any Violation by such Investor, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and subject to

                                       12
<PAGE>

Section 6(c) such Investor will reimburse any legal or other expenses (promptly
as such expenses are incurred and are due and payable) reasonably incurred by
them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Agreement (including this Section 6(b) and Section 7) for only
that amount as does not exceed the net proceeds to such Investor as a result of
the sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented.

               c. Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The indemnifying party shall pay for only one
separate legal counsel for the Indemnified Persons or the Indemnified Parties,
as applicable, and such legal counsel shall be selected by Investors holding a
majority-in-interest of the Registrable Securities included in the Registration
Statement to which the Claim relates (with the approval of a
majority-in-interest of the Initial Investors), if the Investors are entitled to
indemnification hereunder, or the Company, if the Company is entitled to
indemnification hereunder, as applicable. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is actually prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

                                       13
<PAGE>

          7. CONTRIBUTION.

     To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that (i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and (iii)contribution (together
with any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

          8. REPORTS UNDER THE 1934 ACT.

     With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the investors to sell securities of the Company
to the public without registration ("RULE 144"), the Company agrees to:

               a. make and keep public information available, as those terms are
understood and defined in Rule 144;

               b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

               c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.

          9. ASSIGNMENT OF REGISTRATION RIGHTS.

     The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of Registrable Securities if:
(i) the Investor agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment, the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act and
applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein, (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement, and (vi) such transferee shall be an "ACCREDITED INVESTOR" as that
term defined in Rule 501 of Regulation D promulgated under the 1933 Act.

                                       14
<PAGE>

          10. AMENDMENT OF REGISTRATION RIGHTS.

     Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with written consent of the Company, each of the Initial
Investors (to the extent such Initial Investor still owns Registrable
Securities) and Investors who hold a majority interest of the Registrable
Securities. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company.

          11. MISCELLANEOUS.

               a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

               b. Any notices required or permitted to be given under the terms
hereof shall be sent by certified or registered mail (return receipt requested)
or delivered personally or by courier (including a recognized overnight delivery
service) or by facsimile and shall be effective five days after being placed in
the mail, if mailed by regular United States mail, or upon receipt, if delivered
personally or by courier (including a recognized overnight delivery service) or
by facsimile, in each case addressed to a party. The addresses for such
communications shall be:

                           If to the Company:

                           Innofone.com, Inc.
                           3470 Olney-Laytonsville Road, Suite 118
                           Olney, MD 20832
                           Attention: Chief Executive Officer
                           Telephone: (301) 774-6913
                           Facsimile:

                                       15
<PAGE>

                           With a copy to:

                           Gersten Savage LLP
                           600 Lexington Avenue
                           New York, New York 10022
                           Attention:   Arthur S. Marcus, Esq.
                           Telephone:  (212) 752-9700
                           Facsimile:   (212) 980-5192

If to an Investor: to the address set forth immediately below such Investor's
name on the signature pages to the Securities Purchase Agreement.

                           With a copy to:

                           Ballard Spahr Andrews & Ingersoll, LLP
                           1735 Market Street
                           51st Floor
                           Philadelphia, Pennsylvania  19103
                           Attention:  Gerald J. Guarcini, Esq.
                           Telephone:  215-865-8625
                           Facsimile:  215-864-8999

               c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

               d. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH
RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

                                       16
<PAGE>

               e. In the event that any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

               f. This Agreement, the Notes, the Warrants and the Securities
Purchase Agreement (including all schedules and exhibits thereto) constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement and the Securities Purchase Agreement supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof and thereof.

               g. Subject to the requirements of Section 9 hereof, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns.

               h. The headings in this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.

               i. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement.

               j. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

               k. Except as otherwise provided herein, all consents and other
determinations to be made by the Investors pursuant to this Agreement shall be
made by Investors holding a majority of the Registrable Securities, determined
as if the all of the Notes then outstanding have been converted into for
Registrable Securities.

                                       17
<PAGE>

               l. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to each Investor by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for breach of its obligations under
this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of any of the provisions under this Agreement,
that each Investor shall be entitled, in addition to all other available
remedies in law or in equity, and in addition to the penalties assessable
herein, to an injunction or injunctions restraining, preventing or curing any
breach of this Agreement and to enforce specifically the terms and provisions
hereof, without the necessity of showing economic loss and without any bond or
other security being required.

               m. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       18
<PAGE>

         IN WITNESS WHEREOF, the Company and the undersigned Initial Investors
have caused this Agreement to be duly executed as of the date first above
written.

INNOFONE.COM, INC.

/s/ Alex Lightman
-------------------------------------
Alex Lightman
Chief Executive Officer

AJW PARTNERS, LLC
By:  SMS Group, LLC

/s/ Corey S. Ribotsky
-------------------------------------
Corey S. Ribotsky
Manager

AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC

/s/ Corey S. Ribotsky
-------------------------------------
Corey S. Ribotsky
Manager

AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC

/s/ Corey S. Ribotsky
-------------------------------------
Corey S. Ribotsky
Manager

NEW MILLENNIUM CAPITAL PARTNERS, II, LLC
By:  First Street Manager II, LLC

/s/ Corey S. Ribotsky
-------------------------------------
Corey S. Ribotsky
ManagerQuickLinks
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Exhibit 10.2b    
    

AMPHASTAR PHARMACEUTICALS, INC.

2005 EQUITY INCENTIVE AWARD PLAN  

ARTICLE 1  

 PURPOSE  

        The purpose of the Amphastar Pharmaceuticals, Inc. 2005 Equity Incentive Award Plan (the "Plan") is to
promote the success and enhance the value of Amphastar Pharmaceuticals, Inc., a Delaware corporation (the "Company"), by linking the personal
interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for performance to generate returns to Company
stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon
whose judgment, interest, and special effort the successful conduct of the Company's operation is largely dependent. 

ARTICLE 2  

 DEFINITIONS AND CONSTRUCTION  

        Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular
pronoun shall include the plural where the context so indicates. 

        2.1   "Administrator" means the entity that conducts the general administration of the Plan as provided herein. With reference
to the administration of the Plan with respect to Awards granted to Independent Directors, the term "Administrator" shall refer to the Board. With
reference to the administration of the Plan with respect to any other Award, the term "Administrator" shall refer to the Committee unless the Board has
assumed the authority for administration of the Plan generally as provided in Section 13.1. With reference to the duties of the Committee under the Plan which have been delegated to one or more
persons pursuant to Section 13.5, the term "Administrator" shall refer to such person(s) unless the Committee or the Board has revoked such
delegation. 

        2.2   "Award" means an Option, a Restricted Stock award, a Stock Appreciation Right award, a Dividend Equivalents award, a
Stock Payment award, a Restricted Stock Unit award or a Performance-Based Award granted to a Participant pursuant to the Plan. 

        2.3   "Award Agreement" means any written or electronic agreement, contract, or other instrument or document evidencing an
Award. 

        2.4   "Board" means the Board of Directors of the Company. 

        2.5   "Cause," unless otherwise defined in an employment or services agreement between the Participant and the Company or any
Parent or Subsidiary, means a Participant's dishonesty, fraud, gross or willful misconduct against the Company or any Parent or Subsidiary, unauthorized use or disclosure of confidential information
or trade secrets of the Company or any Parent or Subsidiary, or conviction of, or plea of nolo contendre to, a crime punishable by law (except
misdemeanor violations). The foregoing definition shall not in any way preclude or restrict the right of the Company or any Parent or Subsidiary to discharge or dismiss any Participant or other person
in the service of the Company or any Parent or Subsidiary for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for
termination for Cause. 

        2.6   "Change in Control" means and includes each of the following: 

        (a)   the
acquisition, directly or indirectly, by any "person" or "group" (as those terms are defined in Sections 3(a)(9), 13(d) and 14(d) of the Exchange Act and the rules
thereunder) of 

 

"beneficial
ownership" (as determined pursuant to Rule 13d-3 under the Exchange Act) of securities entitled to vote generally in the election of directors
("voting securities") of the Company that represent 50% or more of the combined voting power of the Company's then outstanding voting securities, other
than: 

          (i)  an
acquisition by a trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any
person controlled by the Company or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any person controlled by the Company, or 

         (ii)  an
acquisition of voting securities by the Company or a corporation owned, directly or indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company, or 

        (iii)  an
acquisition of voting securities pursuant to a transaction described in subsection (c) below that would not be a Change in Control under subsection (c), or 

        (iv)  an
acquisition of voting securities pursuant to the Company's initial public offering of the Stock; 

         Notwithstanding
the foregoing, the following event shall not constitute an "acquisition" by any person or group for purposes of this Section 2.6: an
acquisition of the Company's securities by the Company which causes the Company's voting securities beneficially owned by a person or group to represent 50% or more of the combined voting power of the
Company's then outstanding voting securities; provided, however, that if a person or group shall become
the beneficial owner of 50% or more of the combined voting power of the Company's then outstanding voting securities by reason of share acquisitions by the Company as described above and shall, after
such share acquisitions by the Company, become the beneficial owner of any additional voting securities of the Company, then such acquisition shall constitute a Change in Control; or 

        (b)   during
any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a
director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in subsections (a) or (c) of this Section 2.6) whose
election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors
at the beginning of the two year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or 

        (c)   the
consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company's assets or (z) the acquisition of assets or stock of
another entity, in each case other than a transaction: 

          (i)  which
results in the Company's voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially
all of the Company's assets or otherwise succeeds to the business of the Company (the Company or such person, the "Successor Entity") directly or
indirectly, at least a majority of the combined voting power of the Successor Entity's outstanding voting securities immediately after the transaction, and 

2

 

         (ii)  after
which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity;  provided, however, that no person or group shall be treated for purposes of this paragraph (ii)
as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or 

        (d)   the
Company's stockholders approve a liquidation or dissolution of the Company. 

         For
purposes of subsection (a) above, the calculation of voting power shall be made as if the date of the acquisition were a record date for a vote of
the Company's stockholders, and for purposes of subsection (c) above, the calculation of voting power shall be made as if the date of the consummation of the transaction were a record date for
a vote of the Company's stockholders. 

         The
Administrator shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change in Control of
the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto. 

        2.7   "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations issued thereunder. 

        2.8   "Committee" means the committee of the Board described in Article 13. 

        2.9   "Constructive Termination" means a Participant's voluntary resignation following: 

        (a)   A
reduction in such Participant's level of compensation (including base salary, fringe benefits and target bonus under any corporate-performance based incentive
programs) by more than ten percent (10%); or 

        (b)   A
relocation of the Participant's place of employment by more than forty (40) miles, provided and only if such change, reduction or relocation is effected by the
Company without Participant's consent; or 

        (c)   A
diminution in title or significant reduction in responsibilities. 

        2.10 "Consultant" means any consultant or adviser if: 

        (a)   The
consultant or adviser renders bona fide services to the Company or any Parent or Subsidiary; 

        (b)   The
services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company's securities; and 

        (c)   The
consultant or adviser is a natural person who has contracted directly with the Company or any Parent or Subsidiary to render such services. 

        2.11 "Covered Employee" means an Employee who is, or is likely to become, a "covered employee" within the meaning of
Section 162(m)(3) of the Code. 

        2.12 "Disability" means a permanent and total disability within the meaning of Section 22(e)(3) of the Code, as it may
be amended from time to time. 

        2.13 "Dividend Equivalents" means a right granted to a Participant pursuant to Article 8 to receive the equivalent
value (in cash or Stock) of dividends paid on Stock. 

        2.14 "Effective Date" shall mean the date immediately prior to the Public Trading Date. 

        2.15 "Eligible Individual" means any person who is a member of the Board, a Consultant or an Employee, as determined by the
Administrator. 

3

 

        2.16 "Employee" means any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the
Company or any Parent or Subsidiary. 

        2.17 "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. 

        2.18 "Existing Plan" has the meaning set forth in Section 3.1(a). 

        2.19 "Expiration Date" has the meaning set forth in Section 14.3. 

        2.20 "Fair Market Value" means, as of any date, the value of Stock determined as follows: 

        (a)   If
the Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock as quoted on such exchange or system for the last market trading day prior to the date of
determination for which a closing sales price is reported, as reported in The Wall Street Journal or such other source as the Administrator deems
reliable; 

        (b)   If
the Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the closing bid and
asked prices for the Stock on the date prior to the date of determination as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or 

        (c)   In
the absence of an established market for the Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator. 

        2.21 "Incentive Stock Option" means an Option that is intended to be an incentive stock option and meets the requirements of
Section 422 of the Code or any successor provision thereto. 

        2.22 "Independent Director" means a member of the Board who is not an Employee. 

        2.23 "Market Capitalization" means the closing price of the Company's common stock on a national securities exchange or
quotation system multiplied by the number of outstanding shares of common stock of the Company on such date. 

        2.24 "Non-Employee Director" means a member of the Board who qualifies as a "Non-Employee Director"
as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor rule. 

        2.25 "Non-Qualified Stock Option" means an Option that is not intended to be or otherwise does not qualify as an
Incentive Stock Option. 

        2.26 "Option" means a right granted to a Participant pursuant to Article 5 of the Plan to purchase a specified number
of shares of Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option. 

        2.27 "Parent" means any "parent corporation" as defined in Section 424(e) of the Code and any applicable regulations
promulgated thereunder of the Company or any other entity which beneficially owns, directly or indirectly, a majority of the outstanding voting stock or voting power of the Company. 

        2.28 "Participant" means any Eligible Individual who, as a member of the Board, a Consultant or an Employee, has been granted
an Award pursuant to the Plan. 

        2.29 "Performance-Based Award" means an Award granted to selected Covered Employees pursuant to Articles 6 and 8, but which
is subject to the terms and conditions set forth in Article 9. 

        2.30 "Performance Criteria" means the criterion or criteria that the Administrator selects for purposes of establishing the
Performance Goal or Performance Goals for a Participant for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the following: net earnings
(either before or after interest, taxes, depreciation and 

4

 

amortization),
sales or revenue, net income (either before or after taxes), operating earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), return on net assets,
return on stockholders' equity, return on sales, gross or net profit margin, market capitalization, working capital, earnings per share or price per share of Stock, any of which may be measured either
in absolute terms or as compared to any incremental increase or as compared to results of a peer group. The Administrator shall, within the time prescribed by Section 162(m) of the Code, define
in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant. 

        2.31 "Performance Goals" means, for a Performance Period, the goals established in writing by the Administrator for the
Performance Period based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall
Company performance or the performance of a Subsidiary, division or other operational unit, or an individual. The Administrator, in its discretion, may, within the time prescribed by
Section 162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants
(i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (ii) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting
principles, or business conditions. 

        2.32 "Performance Period" means the one or more periods of time, which may be of varying and overlapping durations, as the
Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant's right to, and the payment of, a Performance-Based
Award. 

        2.33 "Plan" means this Amphastar Pharmaceuticals, Inc. 2005 Equity Incentive Award Plan, as it may be amended from
time to time. 

        2.34 "Public Trading Date" means the first date upon which the Company is subject to the reporting requirements of
Section 13 or 15(d)(2) of the Exchange Act. 

        2.35 "Qualified Performance-Based Compensation" means any compensation that is intended to qualify as "qualified
performance-based compensation" as described in Section 162(m)(4)(C) of the Code. 

        2.36 "Restricted Stock" means Stock awarded to a Participant pursuant to Article 6 that is subject to certain
restrictions and may be subject to risk of forfeiture or repurchase. 

        2.37 "Restricted Stock Unit" means a right to receive a share of Stock during specified time periods granted pursuant to
Section 8.3. 

        2.38 "Securities Act" means the Securities Act of 1933, as amended from time to time. 

        2.39 "Section 409A Award" has the meaning set forth in Section 10.1. 

        2.40 "Stock" means the common stock of the Company and such other securities of the Company that may be substituted for Stock
pursuant to Article 12. 

        2.41 "Stock Appreciation Right" or "SAR" means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a specified number of shares of Stock on the date the SAR is exercised over the Fair Market Value of such number
of shares of Stock on the date the SAR was granted as set forth in the applicable Award Agreement. 

        2.42 "Stock Payment" means (a) a payment in the form of shares of Stock, or (b) an option or other right to
purchase shares of Stock, as part of any bonus, deferred compensation or other arrangement, made in lieu of all or any portion of the compensation, granted pursuant to Section 8.2. 

5

 

        2.43 "Subsidiary" means any "subsidiary corporation" as defined in Section 424(f) of the Code and any applicable
regulations promulgated thereunder of the Company or any other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. 

        2.44 "Successor Entity" has the meaning set forth in Section 2.6. 

        2.45 "Termination of Consultancy" means the time when the engagement of a Participant as a Consultant to the Company or a
Parent or Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, by resignation, discharge, death or retirement, but excluding terminations where
there is a simultaneous commencement of employment with the Company or any Parent or Subsidiary. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of limitation, the question of whether a Termination of Consultancy resulted from a discharge for good cause, and all questions of
whether a particular leave of absence constitutes a Termination of Consultancy. Notwithstanding any other provision of the Plan, the Company or any Parent or Subsidiary has an absolute and
unrestricted right to terminate a Consultant's service at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in writing. 

        2.46 "Termination of Directorship" shall mean the time when a Participant who is a Non-Employee Director ceases
to be a member of the Board for any reason, including, but not by way of limitation, a termination by resignation, failure to be elected, death or retirement. The Board, in its sole and absolute
discretion, shall determine the effect of all matters and questions relating to Termination of Directorship with respect to Non-Employee Directors. 

        2.47 "Termination of Employment" shall mean the time when the employee-employer relationship between a Participant and the
Company or any Parent or Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding: (a) terminations where there is a simultaneous reemployment or continuing employment of a Participant by the Company or any Parent or Subsidiary, (b) at the
discretion of the Administrator, terminations which result in a temporary severance of the employee-employer relationship, and (c) at the discretion of the Administrator, terminations which are
followed by the simultaneous establishment of a consulting relationship by the Company or a Parent or Subsidiary with the former employee. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of Employment, including, but not by way of limitation, the question of whether a Termination of Employment resulted from a
discharge for good cause, and all questions of whether a particular leave of absence constitutes a Termination of Employment; provided,  however, that, with
respect to Incentive Stock Options, unless otherwise determined by the Administrator in its discretion, a leave of absence, change
in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Employment if, and to the extent that, such leave of
absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. 

ARTICLE 3  

 SHARES SUBJECT TO THE PLAN  

        3.1   Number of Shares. 

        (a)   Subject
to Article 12 and Section 3.1(b), the aggregate number of shares of Stock which may be issued or transferred pursuant to Awards under the Plan
shall be the sum of: (i) 3,700,000 shares; plus (ii) with respect to awards granted under the Amphastar Pharmaceuticals, Inc. Amended and Restated 2002 Stock Option/Stock Issuance
Plan and any other equity incentive plans or arrangement of the Company on or before the Effective Date (collectively, the "Existing  

6

 

 Plans") that expire or are canceled without having been exercised in full or shares of Stock that are forfeited or repurchased pursuant to the terms of awards granted under the
Existing Plans, the number of shares of Stock subject to each such award as to which such award was not exercised prior to its expiration or cancellation or which are forfeited to or repurchased by
the Company. As of the Effective Date, for purposes of this Plan, the aggregate number of shares of Stock authorized for issuance under the Existing Plans is 6,031,854 shares and, accordingly, the
total number of shares of Stock under clauses (i) and (ii) in the preceding sentence shall not exceed 9,731,854 shares. In addition, subject to Article 12, commencing on
January 1, 2007, and on each January 1 thereafter during the term of the Plan (each, a "Determination Date"), the number of shares of
Stock which shall be made available for sale under the Plan shall be increased by that number of shares of Stock equal to the least of (i) 2.0% of the Company's outstanding shares on such
Determination Date; provided that in addition to the foregoing, if at any time after the Effective Date the Company's Market Capitalization exceeds by
at least 200% its Market Capitalization on the Effective Date for any ten consecutive trading day period, then on the last day of such period (the "Market Capitalization Evaluation Date"), the number
of shares of Stock which shall be made available for sale under the Plan shall be increased on such Market Capitalization Evaluation Date by 3.0% of the Company's outstanding shares on such Date;  provided
further, thereafter, if for any subsequent ten consecutive trading day period the Company's Market Capitalization exceeds by at least 200% its
Market Capitalization on the last Market Capitalization Evaluation Date, the number of shares of Stock which shall be made available for sale under the Plan shall again be increased by 2.5%; or
(ii) a lesser amount determined by the Board. Notwithstanding anything in this Section 3.1(a) to the contrary, the number of shares of Stock that may be issued or transferred pursuant to
Awards under the Plan shall not exceed an aggregate of 18,000,000 shares, subject to Article 12 and Section 3.1(b). 

        (b)   To
the extent that an Award terminates, expires, or lapses for any reason, any shares of Stock subject to the Award shall again be available for the grant of an Award
pursuant to the Plan. Additionally, any shares of Stock tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again be available for the
grant of an Award pursuant to the Plan. To the extent permitted by applicable law or any exchange rule, shares of Stock issued in assumption of, or in substitution for, any outstanding awards of any
entity acquired in any form of combination by the Company or any Parent or Subsidiary shall not be counted against shares of Stock available for grant pursuant to this Plan. If any shares of
Restricted Stock are forfeited by a Participant or repurchased by the Company pursuant to Section 6.3 hereof, such shares shall again be available for the grant of an Award pursuant to the
Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the shares available for issuance under the Plan. 

        (c)   Notwithstanding
the provisions of this Section 3.1, no shares of Stock may again be optioned, granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an Incentive Stock Option under Section 422 of the Code. 

        3.2   Stock Distributed.    Any Stock distributed pursuant to an Award may consist, in whole or in part, of
authorized and unissued Stock, treasury stock or Stock purchased on the open market. 

        3.3   Limitation on Number of Shares Subject to Awards.    Notwithstanding any provision in the Plan to the contrary,
and subject to Article 12, the maximum number of shares of Stock with respect to one or more Awards that may be granted to any one Participant during any calendar year shall be 2,000,000;  provided, however,
 that the foregoing limitation shall not apply prior to the Public Trading Date and, following the Public Trading Date, the foregoing
limitation shall not apply until the earliest of: (a) the first material modification of the Plan (including any increase in the number of shares reserved for issuance under the Plan in
accordance with Section 3.1); (b) the issuance of all of the shares of Stock reserved for issuance under the Plan; (c) the expiration of the Plan; (d) the first 

7

 

meeting
of stockholders at which members of the Board are to be elected that occurs after the close of the third calendar year following the calendar year in which occurred the first registration of
an equity security of the Company under Section 12 of the Exchange Act; or (e) such other date required by Section 162(m) of the Code and the rules and regulations promulgated
thereunder. 

ARTICLE 4  

 ELIGIBILITY AND PARTICIPATION  

        4.1   Eligibility.    Persons eligible to participate in this Plan include Employees, Consultants and members of the
Board, as determined by the Administrator. 

        4.2   Participation.    Subject to the provisions of the Plan, the Administrator may, from time to time, select from
among all Eligible Individuals those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award pursuant to this
Plan. 

        4.3   Foreign Participants.    Notwithstanding any provision of the Plan to the contrary, in order to comply with the
laws in other countries in which the Company and its Parents or Subsidiaries operate or have Eligible Individuals, the Administrator, in its sole discretion, shall have the power and authority to:
(i) determine which Parents or Subsidiaries shall be covered by the Plan; (ii) determine which Eligible Individuals outside the United States are eligible to participate in the Plan;
(iii) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify
exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to this Plan as appendices);  provided,
however, that no such subplans and/or modifications shall increase the share limitations contained in Sections 3.1 and 3.3 of the Plan; and
(v) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals.
Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code, any securities law or governing
statute or any other applicable law. 

ARTICLE 5  

 STOCK OPTIONS  

        5.1   General.    The Administrator is authorized to grant Options to Eligible Individuals on the following terms and
conditions: 

        (a)   Exercise Price.    The exercise price per share of Stock subject to an Option shall be determined by the
Administrator and set forth in the Award Agreement; provided that the exercise price per share for any Option shall not be less than 100% of the Fair
Market Value per share of the Stock on the date of grant. 

        (b)   Time and Conditions of Exercise.    The Administrator shall determine the time or times at which an Option may
be exercised in whole or in part; provided that the term of any Option granted under the Plan shall not exceed ten years. The Administrator shall also
determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised. The Administrator may extend the term of any outstanding Option in
connection with any Termination of Employment, Termination of Directorship or Termination of Consultancy of the Participant holding such Option, or amend any other term or condition of such Option
relating to such a Termination of Employment, Termination of Directorship or Termination of Consultancy. 

8

 

        (c)   Payment.    The Administrator shall determine the methods, terms and conditions by which the exercise price of
an Option may be paid, and the form and manner of payment, including, without limitation, payment in the form of cash, a promissory note bearing interest at no less than such rate as shall then
preclude the imputation of interest under the Code, shares of Stock, or other property acceptable to the Administrator and payment through the delivery of a notice that the Participant has placed a
market sell order with a broker with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the
sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement of
such sale, and the methods by which shares of Stock shall be delivered or deemed to be delivered to Participants. Notwithstanding any other provision of the Plan to the contrary, no Participant who is
a member of the Board or an "executive officer" of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option, or continue any
extension of credit with respect to the exercise price of an Option with a loan from the Company or a loan arranged by the Company, in any method which would violate Section 13(k) of the
Exchange Act. 

        (d)   Evidence of Grant.    All Options shall be evidenced by an Award Agreement between the Company and the
Participant. The Award Agreement shall include such additional provisions as may be specified by the Administrator. 

        5.2   Incentive Stock Options.    Incentive Stock Options may be granted only to employees (as defined in accordance
with Section 3401(c) of the Code) of the Company or a Subsidiary which constitutes a "subsidiary corporation" of the Company within Section 424(f) of the Code or a Parent which
constitutes a "parent corporation" of the Company within the meaning of Section 424(e) of the Code, and the terms of any Incentive Stock Options granted pursuant to the Plan must comply with
the following additional provisions of this Section 5.2 in addition to the requirements of Section 5.1: 

        (a)   Ten Percent Owners.    An Incentive Stock Option shall be granted to any individual who, at the date of grant,
owns stock possessing more than ten percent of the total combined voting power of all classes of Stock of the Company or any "subsidiary corporation" of the Company or "parent corporation" of the
Company (each within the meaning of Section 424 of the Code) only if such Option is granted at an exercise price per share that is not less than 110% of the Fair Market Value per share of the
Stock on the date of the grant and the Option is exercisable for no more than five years from the date of grant. 

        (b)   Transfer Restriction.    An Incentive Stock Option shall not be transferable by the Participant other than by
will or by the laws of descent or distribution. 

        (c)   Right to Exercise.    During a Participant's lifetime, an Incentive Stock Option may be exercised only by the
Participant. 

        (d)   Failure to Meet Requirements.    Any Option (or portion thereof) purported to be an Incentive Stock Option
which, for any reason, fails to meet the requirements of Section 422 of the Code shall be considered a Non-Qualified Stock Option. 

        5.3   Substitution of Stock Appreciation Rights.    The Administrator may provide in the Award Agreement evidencing
the grant of an Option that the Administrator, in its sole discretion, shall have to right to substitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such
Option; provided that such Stock Appreciation Right shall be exercisable with respect to the same number of shares of Stock for which such substituted
Option would have been exercisable. 

9

 
ARTICLE 6  

 RESTRICTED STOCK AWARDS  

        6.1   Grant of Restricted Stock.    The Administrator is authorized to make Awards of Restricted Stock to any
Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. All Awards of Restricted Stock shall be evidenced by an
Award Agreement. 

        6.2   Issuance and Restrictions.    Restricted Stock shall be subject to such repurchase restrictions, forfeiture
restrictions, restrictions on transferability and other restrictions as the Administrator may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to
receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances or installments or otherwise as the Administrator
determines at the time of the grant of the Award or thereafter. Alternatively, these restrictions may lapse pursuant to the satisfaction of one or more Performance Goals or other specific performance
goals as the Administrator determines to be appropriate at the time of the grant of the Award or thereafter, in each case on a specified date or dates or over any period or periods determined by the
Administrator. 

        6.3   Repurchase or Forfeiture.    Except as otherwise determined by the Administrator at the time of the grant of
the Award or thereafter, upon a Participant's Termination of Employment, Termination of Directorship or Termination of Consultancy during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions shall be forfeited or subject to repurchase by the Company (or its assignee) under such terms as the Administrator shall determine; provided,
however, that the Administrator may (a) provide in any Restricted Stock Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of a Participant's Termination of Employment, Termination of Directorship or Termination of Consultancy under certain circumstances, and (b) in other
cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock. 

        6.4   Certificates for Restricted Stock.    Restricted Stock granted pursuant to the Plan may be evidenced in such
manner as the Administrator shall determine. If certificates representing shares of Restricted Stock are registered in the name of the Participant, certificates must bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until such time as all
applicable restrictions lapse or the Award Agreement may provide that the shares shall be held in escrow by an escrow agent designated by the Company. 

ARTICLE 7  

 STOCK APPRECIATION RIGHTS  

        7.1   Grant of Stock Appreciation Rights.    A Stock Appreciation Right may be granted to any Eligible Individual
selected by the Administrator. A Stock Appreciation Right shall be subject to such terms and conditions not inconsistent with the Plan as the Administrator shall impose and shall be evidenced by an
Award Agreement. 

        7.2   Terms of Stock Appreciation Rights. 

        (a)   A
Stock Appreciation Right shall have a term set by the Administrator. A Stock Appreciation Right shall be exercisable in such installments as the Administrator may
determine. A Stock Appreciation Right shall cover such number of shares of Stock as the Administrator may determine. The exercise price per share of Stock subject to each Stock Appreciation Right
shall be set by the Administrator. 

10

 

        (b)   A
Stock Appreciation Right shall entitle the Participant (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a
specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying (i) the amount (if
any) by which the Fair Market Value of a share of Stock on the date of exercise of the Stock Appreciation Right exceeds the exercise price per share of the Stock Appreciation Right, by (ii) the
number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose. 

        7.3   Payment and Limitations on Exercise. 

        (a)   Subject
to Sections 7.3(b) and (c), payment of the amounts determined under Sections 7.2(b) above shall be in cash, in Stock (based on its Fair Market Value as of the
date the Stock Appreciation Right is exercised) or a combination of both, as determined by the Administrator. 

        (b)   To
the extent payment for a Stock Appreciation Right is to be made in cash, the Award Agreement shall, to the extent necessary to comply with the requirements of
Section 409A of the Code, specify the date of payment, which may be different than the date of exercise of the Stock Appreciation Right. If the date of payment for a Stock Appreciation Right is
later than the date of exercise, the Award Agreement may specify that the Participant be entitled to earnings on such amount until paid. 

        (c)   To
the extent any payment under Section 7.2(b) is effected in Stock, it shall be made subject to satisfaction of all provisions of Article 5 above
pertaining to Options. 

ARTICLE 8  

 OTHER TYPES OF AWARDS  

        8.1   Dividend Equivalents. 

        (a)   Any
Eligible Individual selected by the Administrator may be granted Dividend Equivalents based on the dividends on the shares of Stock that are subject to any Award, to
be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the Administrator. Such
Dividend Equivalents shall be converted to cash or additional shares of Stock by such formula and at such time and subject to such limitations as may be determined by the Administrator. 

        (b)   Dividend
Equivalents granted with respect to Options or SARs that are intended to be Qualified Performance-Based Compensation shall be payable, with respect to
pre-exercise periods, regardless of whether such Option or SAR is subsequently exercised. 

        8.2   Stock Payments.    Any Eligible Individual selected by the Administrator may receive Stock Payments in the
manner determined from time to time by the Administrator; provided, that unless otherwise determined by the Administrator such Stock Payments shall be
made in lieu of base salary, bonus, or other cash compensation otherwise payable to such Eligible Individual. The number of shares shall be determined by the Administrator and may be based upon the
Performance Goals or other specific performance goals determined appropriate by the Administrator. 

        8.3   Restricted Stock Units.    The Administrator is authorized to make Awards of Restricted Stock Units to any
Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. At the time of grant, the Administrator shall specify the
date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate. Alternatively, Restricted Stock
Units may become fully vested and nonforfeitable pursuant to the satisfaction of one or more Performance Goals or other specific performance goals as the Administrator determines to be appropriate at
the time of the grant of the Restricted Stock Units or thereafter, in each case on a 

11

 

specified
date or dates or over any period or periods determined by the Administrator. At the time of grant, the Administrator shall specify the maturity date applicable to each grant of Restricted
Stock Units which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Eligible Individual to whom the Award is granted. On the maturity date,
the Company shall transfer to the Participant one unrestricted, fully transferable share of Stock for each Restricted Stock Unit that is vested and scheduled to be distributed on such date and not
previously forfeited. The Administrator shall specify the purchase price, if any, to be paid by the Participant to the Company for such shares of Stock. 

        8.4   Term.    Except as otherwise provided herein, the term of any Award of Dividend Equivalents, Stock Payments or
Restricted Stock Units shall be set by the Administrator in its discretion. 

        8.5   Exercise or Purchase Price.    The Administrator may establish the exercise or purchase price, if any, of any
Award of Stock Payments or Restricted Stock Units; provided, however, that such price shall not be less than the par value of a share of Stock on the
date of grant, unless otherwise permitted by applicable state law. 

        8.6   Form of Payment.    Payments with respect to any Awards granted under Sections 8.1, 8.2 or 8.3 shall be made in
cash, in Stock or a combination of both, as determined by the Administrator. 

        8.7   Award Agreement.    All Awards under this Article 8 shall be subject to such additional terms and
conditions as determined by the Administrator and shall be evidenced by a written Award Agreement. 

ARTICLE 9  

 PERFORMANCE-BASED AWARDS  

        9.1   Purpose.    The purpose of this Article 9 is to provide the Administrator the ability to qualify Awards
other than Options and SARs and that are granted pursuant to Articles 6 and 8 as Qualified Performance-Based Compensation. If the Administrator, in its discretion, decides to grant a Performance-Based
Award to a Covered Employee, the provisions of this Article 9 shall control over any contrary provision contained in Articles 6 or 8; provided,
however, that the Administrator may in its discretion grant Awards to Covered Employees that are based on Performance Criteria or Performance Goals but that do not satisfy the
requirements of this Article 9. 

        9.2   Applicability.    This Article 9 shall apply only to those Covered Employees selected by the
Administrator to receive Performance-Based Awards. The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award
for the period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any
subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other
period. 

        9.3   Procedures with Respect to Performance-Based Awards.    To the extent necessary to comply with the Qualified
Performance-Based Compensation requirements of Section 162(m)(4)(C) of the Code, with respect to any Award granted under Articles 6 and 8 which may be granted to one or more Covered Employees,
no later than ninety (90) days following the commencement of any fiscal year in question or any other designated fiscal period or period of service (or such other time as may be required or
permitted by Section 162(m) of the Code), the Administrator shall, in writing, (a) designate one or more Covered Employees, (b) select the Performance Criteria applicable to the
Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (d) specify the relationship
between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered 

12

 

Employee
for such Performance Period. Following the completion of each Performance Period, the Administrator shall certify in writing whether the applicable Performance Goals have been achieved for
such Performance Period. In determining the amount earned by a Covered Employee, the Administrator shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level
of performance to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the Performance Period. 

        9.4   Payment of Performance-Based Awards.    Unless otherwise provided in the applicable Award Agreement, a
Participant must be employed by the Company or a Parent or Subsidiary on the day a Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a Participant shall be
eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved. 

        9.5   Additional Limitations.    Notwithstanding any other provision of the Plan, any Award which is granted to a
Covered Employee and is intended to constitute Qualified Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings issued thereunder that are requirements for qualification as qualified performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent necessary to conform to such requirements. 

ARTICLE 10  

 COMPLIANCE WITH SECTION 409A OF THE CODE  

        10.1 Awards subject to Code Section 409A.    Any Award that constitutes, or provides for, a deferral of
compensation subject to Section 409A of the Code (a "Section 409A Award") shall satisfy the requirements of Section 409A of the
Code and this Article 10, to the extent applicable. The Award Agreement with respect to a Section 409A Award shall incorporate the terms and conditions required by Section 409A of
the Code and this Article 10. 

        10.2 Distributions under a Section 409A Award. 

        (a)   Subject
to subsection (b), any shares of Stock or other property or amounts to be paid or distributed upon the grant, issuance, vesting, exercise or payment of a
Section 409A Award shall be distributed in accordance with the requirements of Section 409A(a)(2) of the Code, and shall not be distributed earlier than: 

          (i)  the
Participant's separation from service, as determined by the Secretary of the Treasury; 

         (ii)  the
date the Participant becomes disabled; 

        (iii)  the
Participant's death; 

        (iv)  a
specified time (or pursuant to a fixed schedule) specified under the Award Agreement at the date of the deferral compensation; 

         (v)  to
the extent provided by the Secretary of the Treasury, a change in the ownership or effective control of the Company or a Parent or Subsidiary, or in the ownership of
a substantial portion of the assets of the Company or a Parent or Subsidiary; or 

        (vi)  the
occurrence of an unforeseeable emergency with respect to the Participant. 

        (b)   In
the case of a Participant who is a "specified employee," the requirement of paragraph (a)(i) shall be met only if the distributions with respect to the
Section 409A Award may not be made before the date which is six months after the Participant's separation from service (or, if earlier, the date of the Participant's death). For purposes of
this subsection (b), a Participant 

13

 

shall
be a "specified employee" if such Participant is a key employee (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof) of a corporation any stock
of which is publicly traded on an established securities market or otherwise, as determined under Section 409A(a)(2)(B)(i) of the Code and the Treasury Regulations thereunder. 

        (c)   The
requirement of paragraph (a)(vi) shall be met only if, as determined under Treasury Regulations under Section 409A(a)(2)(B)(ii) of the
Code, the amounts distributed with respect to the unforeseeable emergency do not exceed the amounts necessary to satisfy such unforeseeable emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the extent to which such unforeseeable emergency is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant's assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). 

        (d)   For
purposes of this Section, the terms specified therein shall have the respective meanings ascribed thereto under Section 409A of the Code and the Treasury
Regulations thereunder. 

        10.3 Prohibition on Acceleration of Benefits.    The time or schedule of any distribution or payment of any shares
of Stock or other property or amounts under a Section 409A Award shall not be accelerated, except as otherwise permitted under Section 409A(a)(3) of the Code and the Treasury Regulations
thereunder. 

        10.4 Elections under Section 409A Awards. 

        (a)   Any
deferral election provided under or with respect to an Award to any Eligible Individual, or to the Participant holding a Section 409A Award, shall satisfy the
requirements of Section 409A(a)(4)(B) of the Code, to the extent applicable, and, except as otherwise permitted under paragraph (i) or (ii) below, any such deferral election with
respect to compensation for services performed during a taxable year shall be made not later than the close of the preceding taxable year, or at such other time as provided in Treasury Regulations. 

          (i)  In
the case of the first year in which an Eligible Individual or a Participant holding a Section 409A Award, becomes eligible to participate in the Plan, any
such deferral election may be made with respect to services to be performed subsequent to the election with thirty days after the date the Eligible
Individual, or the Participant holding a Section 409A Award, becomes eligible to participate in the Plan, as provided under Section 409A(a)(4)(B)(ii) of the Code. 

         (ii)  In
the case of any performance-based compensation based on services performed by an Eligible Individual, or the Participant holding a Section 409A Award, over a
period of at least twelve months, any such deferral election may be made no later than six months before the end of the period, as provided under Section 409A(a)(4)(B)(iii) of the Code. 

        (b)   In
the event that a Section 409A Award permits, under a subsequent election by the Participant holding such Section 409A Award, a delay in a distribution
or payment of any shares of Stock or other property or amounts under such Section 409A Award, or a change in the form of distribution or payment, such subsequent election shall satisfy the
requirements of Section 409A(a)(4)(C) of the Code, and: 

          (i)  such
subsequent election may not take effect until at least twelve months after the date on which the election is made, 

         (ii)  in
the case such subsequent election relates to a distribution or payment not described in Section 10.2(a)(ii), (iii) or (vi), the first payment with
respect to such election 

14

 

may
be deferred for a period of not less than five years from the date such distribution or payment otherwise would have been made, and 

        (iii)  in
the case such subsequent election relates to a distribution or payment described in Section 10.2(a)(iv), such election may not be made less than twelve
months prior to the date of the first scheduled distribution or payment under Section 10.2(a)(iv). 

        10.5 Compliance in Form and Operation.    A Section 409A Award, and any election under or with respect to
such Section 409A Award, shall comply in form and operation with the requirements of Section 409A of the Code and the Treasury Regulations thereunder. 

ARTICLE 11  

 PROVISIONS APPLICABLE TO AWARDS  

        11.1 Stand-Alone and Tandem Awards.    Awards granted pursuant to the Plan may, in the discretion of the
Administrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other Awards. 

        11.2 Award Agreement.    Awards under the Plan shall be evidenced by Award Agreements that set forth the terms,
conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event of the Participant's Termination of Employment, Termination of Directorship or
Termination of Consultancy, and the Company's authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award. 

        11.3 Limits on Transfer. 

        (a)   Except
as otherwise provided by the Administrator pursuant to Section 11.3(b), no right or interest of a Participant in any Award may be pledged, encumbered, or
hypothecated to or in favor of any party other than the Company or a Parent or Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than
the Company or a Parent or Subsidiary. Except as otherwise provided by the Administrator pursuant to Section 11.3(b), no Award shall be assigned, transferred, or otherwise disposed of by a
Participant other than by will or the laws of descent and distribution, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions
applicable to such shares have lapsed. 

        (b)   Notwithstanding
Section 11.3(a), the Administrator, in its sole discretion, may permit an Award (other than an Incentive Stock Option) to be transferred to,
exercised by and paid to any one or more Permitted Transferees (as defined below), subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be
assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) any Award which is transferred to a Permitted Transferee shall continue
to be subject to all the terms and conditions of the Award as applicable to the original Participant (other than the ability to further transfer the Award); and (iii) the Participant and the
Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted
Transferee, (B) satisfy any requirements for an exemption for the transfer under applicable federal and state securities laws and (C) evidence the transfer. For purposes of this
Section 11.3(b), "Permitted Transferee" shall mean, with respect to a Participant, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant's
household (other than a tenant or employee), a trust in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the 

15

 

Participant)
own more than fifty percent of the voting interests, or any other transferee specifically approved by the Administrator. 

        11.4 Beneficiaries.    Notwithstanding Section 11.3, a Participant may, in the manner determined by the
Administrator, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant's death. A beneficiary, legal guardian,
legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the
extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Participant is married and resides in a community
property state, a designation of a person other than the Participant's spouse as his or her beneficiary with respect to more than 50% of the Participant's interest in the Award shall not be effective
without the prior written consent of the Participant's spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the
Participant's will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation
is filed with the Administrator. 

        11.5 Stock Certificates; Book-Entry Procedures. 

        (a)   Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the
exercise of any Award, unless and until the Board has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on which the shares of Stock are listed or traded. All
Stock certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal,
state, or foreign jurisdiction, securities or other laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or
traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may
require that a Participant make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems advisable in order to comply with any such laws, regulations,
or requirements. The Administrator shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a
window-period limitation, as may be imposed in the discretion of the Administrator. 

        (b)   Notwithstanding
any other provision of the Plan, unless otherwise determined by the Administrator or required by applicable law, rule or regulation, the Company shall
not deliver to any Participant certificates evidencing shares of Stock issued in connection with any Award and instead such shares of Stock shall be recorded in the books of the Company (or, as
applicable, its transfer agent or stock plan administrator). 

        11.6 Paperless Exercise.    In the event that the Company establishes, for itself or using the services of a third
party, an automated system for the exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless exercise of Awards by a Participant may be permitted
through the use of such an automated system. 

16

 
ARTICLE 12  

 CHANGES IN CAPITAL STRUCTURE  

        12.1 Adjustments. 

        (a)   In
the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off, recapitalization, distribution of
Company assets to stockholders (other than normal cash dividends), or any other corporate event affecting the Stock or the share price of the Stock, the Administrator shall make such proportionate
adjustments to reflect such change with respect to (i) the aggregate number and type of shares that may be issued under the Plan (including,
but not limited to, adjustments of the limitations in Sections 3.1 and 3.3); (ii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance
targets or criteria with respect thereto); and (iii) the grant, exercise or purchase price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as
Qualified Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code. 

        (b)   In
the event of any transaction or event described in Section 12.1(a) or any unusual or nonrecurring transactions or events affecting the Company, any affiliate
of the Company, or the financial statements of the Company or any affiliate (including without limitation any Change in Control), or of changes in applicable laws, regulations or accounting
principles, and whenever the Administrator determines that such action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles, the Administrator,
either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Participant's request, is hereby authorized to take any
one or more of the following actions: 

          (i)  To
provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been received upon the
exercise of such Award or realization of the Participant's rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this
Section 12.1(b) the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant's rights, then such Award
may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; 

         (ii)  To
provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; and 

        (iii)  To
make adjustments in the number and type of shares of Stock (or other securities or property) subject to outstanding Awards, and in the number and kind of
outstanding Restricted Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding options, rights and awards and options, rights and
awards which may be granted in the future; 

        (iv)  To
provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the
Plan or the applicable Award Agreement; and 

         (v)  To
provide that the Award cannot vest, be exercised or become payable after such event. 

17

 

        12.2 Acceleration Upon a Change in Control. 

        (a)   Notwithstanding
Section 12.1(b), and except as may otherwise be provided in any applicable Award Agreement or other written agreement entered into between the
Company and a Participant, if a Change in Control occurs and a Participant's Awards are not continued, converted, assumed, or replaced by (i) the Company or a Parent or Subsidiary of the
Company, or (ii) a Successor Entity, such Awards shall become fully exercisable and/or payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards shall lapse
immediately prior to such Change in Control. Upon, or in anticipation of, a Change in Control, the Administrator may cause any and all Awards outstanding hereunder to terminate at a specific time in
the future, including but not limited to the date of such Change in Control, and shall give each Participant the right to exercise such Awards during a period of time as the Administrator, in its sole
and absolute discretion, shall determine. In the event a Participant's Awards are continued, converted, assumed, or replaced by (i) the Company or a Parent or Subsidiary of the Company, or
(ii) a Successor Entity and the Participant's service is terminated without Cause or as a result of a Constructive Termination, within one year following a Change in Control, the shares subject
to such Award shall thereupon vest in full and, if applicable, the remaining forfeiture, repurchase and other restrictions shall lapse. 

        (b)   In
the event that the terms of any agreement between the Company or any Parent or Subsidiary and a Participant contains provisions that conflict with and are more
restrictive than the provisions of this Section 12.2, this Section 12.2 shall prevail and control and the more restrictive terms of such agreement (and only such terms) shall be of no
force or effect. 

        12.3 No Other Rights.    Except as expressly provided in the Plan, no Participant shall have any rights by reason
of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the
Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to an Award or the grant or exercise price of any Award. 

ARTICLE 13  

 ADMINISTRATION  

        13.1 Administrator.    The Administrator of the Plan shall be the Compensation Committee of the Board (or another
committee or a subcommittee of the Board to which the Board delegates administration of the Plan) (such committee, the "Committee"), which Committee
shall consist solely of two or more members of the Board each of whom is both an "outside director," within the meaning of Section 162(m) of the Code, a Non-Employee Director and an
"independent director" under the rules of the Nasdaq Stock Market. Notwithstanding the foregoing: (a) the full Board, acting by a majority of its members in office, shall conduct the general
administration of the Plan with respect to all Awards granted to Independent Directors, and for purposes of such Awards the term "Administrator" as used
in this Plan shall be deemed to refer to the Board, and (b) the Committee may delegate its authority hereunder to the extent permitted by Section 13.5. Appointment of Committee members
shall be effective upon acceptance of appointment. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan
except with respect to matters which under Rule 16b-3 under the Exchange Act or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be
determined in the sole discretion of the Committee. Committee members may resign at any time by delivering written notice to the Board. Vacancies in the Committee may only be filled by the Board. 

18

 

        13.2 Action by the Administrator.    A majority of the Administrator shall constitute a quorum. The acts of a
majority of the members present at any meeting at which a quorum is present, and, subject to applicable law, acts approved in writing by a majority of the Administrator in lieu of a meeting, shall be
deemed the acts of the Administrator. Each member of the Administrator is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other
employee of the Company or any Parent or Subsidiary, the Company's independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to
assist in the administration of the Plan. 

        13.3 Authority of Administrator.    Subject to any specific designation in the Plan, the Administrator has the
exclusive power, authority and discretion to: 

        (a)   Designate
Participants to receive Awards; 

        (b)   Determine
the type or types of Awards to be granted to each Participant; 

        (c)   Determine
the number of Awards to be granted and the number of shares of Stock to which an Award will relate; 

        (d)   Determine
the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any
reload provision, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;  provided, however,
that the Administrator shall not have the authority to accelerate the vesting or waive the forfeiture of any Performance-Based
Awards; 

        (e)   Determine
whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other
Awards, or other property, or an Award may be canceled, forfeited, or surrendered; 

        (f)    Prescribe
the form of each Award Agreement, which need not be identical for each Participant; 

        (g)   Decide
all other matters that must be determined in connection with an Award; 

        (h)   Establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; 

        (i)    Interpret
the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and 

        (j)    Make
all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan. 

        13.4 Decisions Binding.    The Administrator's interpretation of the Plan, any Awards granted pursuant to the Plan,
any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties. 

        13.5 Delegation of Authority.    To the extent permitted by applicable law, the Committee may from time to time
delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards to Participants other than (a) senior executives of the
Company who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or members of the Board) to whom authority to grant or amend
Awards has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of such delegation, and the Committee may at any
time 

19

 

rescind
the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 13.5 shall serve in such capacity at the pleasure of the Committee. 

ARTICLE 14  

 EFFECTIVE AND EXPIRATION DATES  

        14.1 Effective Date.    The Plan will be effective as of the Effective Date. 

        14.2 Approval of Plan by Stockholders.    The Plan will be submitted for the approval of the Company's stockholders
within twelve (12) months after the date of the Board's initial adoption of the Plan. Awards may be granted or awarded prior to such stockholder approval,  provided, that such Awards shall not be
exercisable nor shall such Awards vest prior to the time when the Plan is approved by the stockholders, and  provided further, that if such approval has not been obtained at the end of said twelve-month
period, all Awards previously granted or awarded under the
Plan shall thereupon be canceled and become null and void. In addition, if the Board determines that Awards other than Options or Stock Appreciation Rights which may be granted to
Section 162(m) Participants should continue to be eligible to qualify as performance-based compensation under Section 162(m)(4)(C) of the Code, the Performance Criteria must be disclosed
to and approved by the Company's stockholders no later than the first stockholder meeting that occurs in the fifth year following the year in which the Company's stockholders previously approved the
Plan, as amended and restated to include the Performance Criteria. 

        14.3 Expiration Date.    The Plan will expire on, and no Award may be granted pursuant to the Plan after, the
earlier of the tenth anniversary of (i) the date this Plan is approved by the Board or (ii) the date this Plan is approved by the Company's stockholders (the
"Expiration Date"). Any Awards that are outstanding on the tenth anniversary of the Effective Date shall remain in force according to the terms of the
Plan and the applicable Award Agreement. 

ARTICLE 15  

 AMENDMENT, MODIFICATION, AND TERMINATION  

        15.1 Amendment, Modification, And Termination.    The Board may terminate, amend or modify the Plan at any time and
from time to time; provided, however, that (a) to the extent necessary to comply with any applicable law, regulation, or stock exchange rule, the
Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required, and (b) stockholder approval is required for any amendment to the Plan that
increases the number of shares available under the Plan (other than any adjustment as provided by Article 12). Notwithstanding any provision in this Plan to the contrary, absent approval of the
stockholders of the Company, no Option may be amended to reduce the per share exercise price of the shares subject to such Option below the per share exercise price as of the date the Option is
granted and, except as permitted by Article 12, no Option may be granted in exchange for, or in connection with, the cancellation or surrender of an Option having a higher per share exercise
price. 

        15.2 Awards Previously Granted.    No termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant. 

20

 

ARTICLE 16  

 GENERAL PROVISIONS  

        16.1 No Rights to Awards.    No Participant, Employee, or other person shall have any claim to be granted any Award
pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Participants, Employees, and other persons uniformly. 

        16.2 No Stockholders Rights.    Except as otherwise provided herein, a Participant shall have none of the rights of
a stockholder with respect to shares of Stock covered by any Award until the Participant becomes the record owner of such shares of Stock. 

        16.3 Withholding.    The Company or any Parent or Subsidiary shall have the authority and the right to deduct or
withhold, or require a Participant to remit to the Company an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant's employment tax obligations) required by
law to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Administrator may in its discretion and in satisfaction of the foregoing requirement
allow a Participant to elect to have the Company or a Parent or Subsidiary, as applicable, withhold shares of Stock otherwise issuable under an Award (or allow the return of shares of Stock) having a
Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of Stock which may be withheld with respect to the issuance, vesting,
exercise or payment of any Award (or which may be repurchased from the Participant of such Award within six months (or such other period as may be determined by the Administrator) after such shares of
Stock were acquired by the Participant from the Company) in order to satisfy the Participant's federal, state, local and foreign income and payroll tax liabilities with respect to the issuance,
vesting, exercise or payment of the Award shall be limited to the number of shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. 

        16.4 No Right to Employment or Services.    Nothing in the Plan or any Award Agreement shall interfere with or
limit in any way the right of the Company or any Parent or Subsidiary to terminate any Participant's employment or services at any time, nor confer upon any Participant any right to continue in the
employ or service of the Company or any Parent or Subsidiary. 

        16.5 Unfunded Status of Awards.    The Plan is intended to be an unfunded plan for incentive compensation. With
respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Parent or Subsidiary. 

        16.6 Indemnification.    To the extent allowable pursuant to applicable law, the Administrator (and each member
thereof) shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from
any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the
Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless. 

        16.7 Relationship to other Benefits.    No payment pursuant to the Plan shall be taken into account in determining
any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, 

21

 

welfare
or other benefit plan of the Company or any Parent or Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder. 

        16.8 Expenses.    The expenses of administering the Plan shall be borne by the Company and its Subsidiaries. 

        16.9 Titles and Headings.    The titles and headings of the Sections in the Plan are for convenience of reference
only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. 

        16.10 Fractional Shares.    No fractional shares of Stock shall be issued and the Administrator shall determine, in
its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate. 

        16.11 Limitations Applicable to Section 16 Persons.    Notwithstanding any other provision of the Plan, the
Plan, and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 

        16.12 Government and Other Regulations.    The obligation of the Company to make payment of awards in Stock or
otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register
pursuant to the Securities Act, any of the shares of Stock paid pursuant to the Plan. If the shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the
Securities Act, the Company may restrict the transfer of such shares in such manner as it deems advisable to ensure the availability of any such exemption. 

        16.13 Governing Law.    The Plan and all Award Agreements shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the conflicts of law principles thereof. 

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*
* * * * 

        I
hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Amphastar Pharmaceuticals, Inc.
on                        , 2005. 

*
* * * * 

        I
hereby certify that the foregoing Plan was approved by the stockholders of Amphastar Pharmaceuticals, Inc.
on                        , 2005. 

        Executed
on this        day of                , 2005. 

	

 	
 	

 Corporate Secretary

23

QuickLinks

Exhibit 10.2b

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