Document:

Exhibit 10.31

IT&E INTERNATIONAL GROUP, INC.

2005 EQUITY INCENTIVE PLAN, AS AMENDED

1.      PURPOSES.  The
primary purpose of this IT&E International Group, Inc. 2005 Equity
Incentive Plan (the “Plan”)
is to provide a means by which the Company can retain and maximize the services
of its current Employees, Directors and Consultants, and secure, retain and
maximize the services of new Employees, Directors and Consultants, by providing
Stock Awards, including Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock Awards and stock bonuses, to such persons on the terms and conditions set
forth in the Plan. In addition, the Plan is intended to generate proceeds from
the sale of Common Stock pursuant to Stock Awards that shall be used as general
funds of the Company.

2.      DEFINED TERMS.  Capitalized
terms in this Plan shall have the meanings set forth in Appendix A attached hereto, unless defined
elsewhere in this Plan or the context of their use clearly indicates a
different meaning.

3.      ADMINISTRATION.

3.1   Authority of
Board.  Unless and until the Board
decides to delegate administration of the Plan to a Committee as set forth in Section 3.2
below, the Board shall have full authority to administer the Plan, subject only
to the express provisions and limitations set forth in the Plan and any
applicable laws.  Without limiting the
generality of the foregoing, the Board shall be fully empowered to: (i) determine,
from time to time, the recipients of Stock Awards and the terms upon which
Stock Awards shall be granted to such recipients; (ii) construe and
interpret, and correct any defects, omissions or inconsistencies in, the Plan
and any Stock Awards; (iii) terminate, suspend or amend the Plan or any
Stock Award as provided in Section 11; and (iv) exercise such powers
and perform such acts consistent with the provisions of the Plan as the Board
deems necessary or expedient to promote the best interests of the Company and
its stockholders. The determinations of the Board with respect to the Plan
shall not be subject to review by any Person and shall be final, binding and
conclusive on the Company and all other Persons.

3.2   Delegation to
Committee.  In accordance with the
Board’s authority under the Delaware General Corporation Law and the Company’s
Bylaws, the Board may delegate administration of the Plan to a Committee, which
Committee shall, upon such delegation, be empowered to exercise the full
authority of the Board with respect to the Plan.

4.      COMMON STOCK SUBJECT TO THE PLAN.

4.1      Reserve
Pool.  Subject to the provisions of Section 10 relating
to Capitalization Adjustments, an aggregate of 100,000,000 shares of Common
Stock (the “Reserve Pool”)
may be issued pursuant to Stock Awards. If any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without having been
exercised in full, the shares of Common Stock not acquired under such Stock
Award shall automatically revert to the Reserve Pool and again become available
for issuance under the Plan. During the term of the Plan, the Company shall
keep available in the Reserve Pool at all times a number of shares of Common
Stock sufficient to satisfy all outstanding Stock Awards.

4.2      Limitation
on Number of Shares.  To the extent
required by CCR Title 10, the total number of shares of Common Stock
issuable upon exercise of all outstanding Stock Awards, together with the total
number of shares of Common Stock provided for under any stock bonus or similar
plan of the Company, shall not exceed the applicable percentage as calculated
in accordance with the conditions and exclusions of CCR Title 10, based on
the shares of Common Stock of the Company that are outstanding at the time the
calculation is made.

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5.      ELIGIBILITY.

5.1   Employees.  Employees shall be eligible to receive
each of the types of Stock Awards provided for in the Plan.

5.2   Directors.  Directors shall be eligible to receive
each of the types of Stock Awards, except Incentive Stock Options, provided for
in the Plan.

5.3   Consultants.  To the extent permitted by applicable
law, consultants shall be eligible to receive each of the types of Stock
Awards, except Incentive Stock Options, provided for in the Plan.

5.4   Ten Percent
Stockholders.  In addition to any
other applicable restrictions set forth in this Section 5, a Ten Percent Stockholder
shall not be granted: (i) an Incentive Stock Option unless the exercise
price of such Incentive Stock Option is at least one hundred ten percent (110%)
of the Fair Market Value of the Common Stock on the date of grant and such
Incentive Stock Option is not exercisable after the expiration of five (5) years
from the date of grant; (ii) a Nonstatutory Stock Option unless the
exercise price of such Nonstatutory Stock Option is at least one hundred ten
percent (110%) of the Fair Market Value of the Common Stock on the date of
grant, except as otherwise permitted by CCR Title 10 at the time of the
grant of the Nonstatutory Stock Option; (iii) a Restricted Stock Award
unless the purchase price of the Common Stock issuable upon exercise of such
Restricted Stock Award is at least one hundred percent (100%) of the Fair
Market Value of the Common Stock on the date of grant, except as otherwise
permitted by CCR Title 10 at the time of the grant of the Restricted Stock
Award.

5.5   Proprietary
Information and Inventions Agreement.

(a)     Prior to being granted any Award under the Plan, each
Employee shall have executed and delivered to the Company a copy of the Company’s
standard proprietary information and inventions agreement or such other
agreement containing similar obligations of confidentiality as may be approved
by the Board at the time the Award is granted (any such agreement being
referred to herein as a “Proprietary
Information and Inventions Agreement”). In the event that any
Award is inadvertently granted to an Employee who has not, as of the date of
such grant, entered into a Proprietary Information and Inventions Agreement
with the Company, such Award shall be deemed null and void ab initio.

(b)     In the event that any Employee breaches any provision
of the Proprietary Information and Inventions Agreement between such Employee
and the Company, such Employee shall no longer be eligible to receive Awards
pursuant to this Plan. Moreover, such Employee shall be deemed, as of the date
of such Employee’s breach of such Proprietary Information and Inventions
Agreement, to have forfeited all outstanding Awards previously granted to and
then held by such Employee, regardless of whether such Awards are then vested
or exercisable.

6.      PROVISIONS APPLICABLE TO ALL STOCK AWARDS.

6.1   No Stockholder
Rights.  No Participant shall be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to any Stock Award held by such
Participant unless and until such Participant has satisfied all requirements
for the exercise of the Stock Award pursuant to its terms.

6.2   No Employment
or Other Service Rights.  Nothing in
the Plan or any Stock Award Agreement shall confer upon any Participant any
right to continue to serve the Company or an Affiliate in any capacity.
Likewise, nothing in the Plan or any Stock Award shall affect the right of the
Company or any applicable Affiliate to terminate: (i) the employment of an
Employee with or without notice and with or without Cause; (ii) the
service of a Consultant pursuant to the terms of such Consultant’s agreement
with the Company or an Affiliate; or (iii) the service of a Director
pursuant to the bylaws of the Company or

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any applicable Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the
Affiliate is incorporated, as the case may be.

6.3   Investment
Assurances.  At any time that the
issuance of the shares of Common Stock issuable upon the exercise of a Stock
Award has not been registered under an effective registration statement under
the Securities Act, the Company may: (i) require a Participant, as a
condition of acquiring Common Stock under such Stock Award, to give
written assurances satisfactory to the Company (a) as to the Participant’s
knowledge and experience in financial and business matters and capability to
evaluate the merits and risks of acquiring such Common Stock under such Stock
Award and (b) stating that the Participant is acquiring such Common Stock
under the Stock Award for the Participant’s own account and not with any
present intention of selling or otherwise distributing such Common Stock; and (ii) place
legends, including, without limitation, legends restricting the transfer of
such Common Stock, on any and all stock certificates representing such Common
Stock in order to comply with applicable securities laws.

6.4   Withholding
Obligations.  To the extent provided
by the terms of a Stock Award Agreement, the Participant may satisfy any
federal, state or local tax withholding obligation relating to the acquisition
of Common Stock under a Stock Award by any of the following means (in addition
to the Company’s right to withhold from any compensation paid to the
Participant by the Company) or by a combination of such means: (i) tendering
a cash payment; or (ii) authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the acquisition of Common Stock under the Stock
Award; provided, however, that no shares of Common Stock
are withheld with a value exceeding the minimum amount of tax required to be
withheld by law (or such lower amount as may be necessary to avoid variable
award accounting).

6.5   Vesting.  The Board or Committee may provide that
the total number of shares of Common Stock subject to a Stock Award shall vest
in installments over any given period of time. Criteria for determining the
vesting of shares of Common Stock subject to a Stock Award may be based solely
on the passage of time or on any other criteria, including, without limitation,
the performance of the Participant, deemed appropriate by the Board or
Committee.

6.6   Acceleration
of Exercisability and Vesting.  The
Board shall have the power to accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any part thereof
will vest in accordance with the Plan, notwithstanding the provisions in the
Stock Award stating the time at which it may first be exercised or the time
during which it will vest.

6.7   Terms of
Repurchase Options.  The terms of any
repurchase option in favor of the Company with respect to shares of Common
Stock issuable pursuant to a Stock Award shall be specified in the applicable
Stock Award Agreement. The price per share of Common Stock at which such
repurchase option may be exercised may be either: (i) the Fair Market
Value of the shares of Common Stock on the date of the termination of the
applicable Participant’s Continuous Service; or (ii) the lower of (a) the
Fair Market Value of the shares of Common Stock on the date of repurchase and (b) the
original purchase price per share of Common Stock paid by the applicable
Participant; provided, however, that terms of any repurchase
option shall comply at all times with the provisions of CCR Title 10 relating
to “presumptively reasonable” repurchase prices.

6.8   Information
Obligation.  To the extent required
by CCR Title 10, the Company shall deliver financial statements to
Participants at least annually; provided,
however, that the obligation to
deliver financial statements shall not apply to Employees whose duties with the
Company assure them access to equivalent information.

7.      OPTIONS.

7.1   Stock Award
Agreements for Options.  Each Stock
Award Agreement for an Option shall be in such form and shall contain such
terms and conditions as the Board or Committee shall deem appropriate.

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The terms and
conditions of such Stock Award Agreements may change from time to time, and the
terms and conditions of Stock Award Agreements for separate Options need not be
identical; provided, however, that each Stock Award Agreement
for an Option shall include (through incorporation of provisions hereof by
reference in the Stock Award Agreement or otherwise) the substance of the provisions
set forth in this Section 7.

7.2   Designation.  All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock purchased on exercise of each type
of Option.

7.3   Term.  Subject to the provisions of Section 5.4
above, no Option shall be exercisable after the expiration of ten (10) years
from the date it was granted.

7.4   Minimum
Vesting.  Notwithstanding Section 6.5
above, to the extent required by CCR Title 10: (i) Options granted to
an Employee who is not an Officer, Director or Consultant shall provide for
vesting of the total number of shares of Common Stock at a rate of at least
twenty percent (20%) per year over five (5) years from the date the Option
was granted, subject to reasonable conditions such as Continuous Service; and (ii) Options
granted to Officers, Directors or Consultants may be made fully exercisable at
any time or during any period established by the Board or Committee, subject to
reasonable conditions such as Continuous Service.

7.5   Consideration.

(a)     The purchase price of Common Stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either: (i) in cash at the time the Option is exercised; or (ii) pursuant
to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt
by the Company of cash (or a check) in the amount of, or the receipt by the
Company of a copy of irrevocable instructions previously delivered by the
purchaser to the purchaser’s broker instructing such broker to pay to the
Company an amount equal to, the aggregate exercise price for the number of
shares of Common Stock being issued to the purchaser in connection with the
exercise of the Option from the proceeds of the simultaneous sale of the Common
Stock.

(b)     Notwithstanding Section 7.5(a) above: (i) unless
otherwise specifically provided in the Option, the purchase price of Common
Stock acquired pursuant to an Option that is paid by delivery to the Company of
other Common Stock acquired, directly or indirectly from the Company, shall be
paid only by shares of the Common Stock of the Company that have been held for
more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes); and (ii) in
the case of any deferred payment arrangement, interest shall be compounded at
least annually and shall be charged at the minimum rate of interest necessary
to avoid (a) the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement and (b) the treatment of the Option as a
variable award for financial accounting purposes.

7.6   Early
Exercise.  An Option may include a
provision whereby the Participant may elect at any time before the Participant’s
Continuous Service terminates to exercise the Option as to any part or all of
the shares of Common Stock subject to the Option prior to the full vesting of
such shares of Common Stock. Subject to Section 6.7 above, any unvested
shares of Common Stock so purchased may be subject to a repurchase option in
favor of the Company or to any other restriction the Board determines to be
appropriate.

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7.7   Termination of
Continuous Service.

(a)     Termination Other Than for Cause or As a Result of Death
or Disability. In the event that a Participant’s Continuous Service
terminates other than for Cause or as a result of the Participant’s Disability
or death, the Participant may exercise his or her Option (to the extent that
the Participant was entitled to exercise such Option as of the date of
termination) at any time within the period (the “Post-Termination Exercise Period”)
ending on the earlier of: (i) the expiration of the term of the Option as
set forth in the applicable Stock Award Agreement; or (ii) the date three (3) months
following the termination of the Participant’s Continuous Service (or such
longer or shorter period specified in the applicable Stock Award Agreement,
which period shall not be less than thirty (30) days). If, after the
termination of such Participant’s Continuous Service, such Participant does not
exercise his or her Option within such Post-Termination Exercise Period, the
Option shall terminate.

(b)     Termination for Cause. In the event a Participant’s
Continuous Service is terminated for Cause, the Option shall terminate upon the
termination date of such Participant’s Continuous Service, and the Participant
shall be prohibited from exercising his or her Option as of the time of such
termination.

(c)     Termination As a Result of Disability. In the event
that a Participant’s Continuous Service terminates as a result of the
Participant’s Disability, the Participant may exercise his or her Option (to
the extent that the Participant was entitled to exercise such Option as of the
date of termination), at any time during the Post-Termination Exercise Period
ending on the earlier of: (i) the expiration of the term of the Option as
set forth in the Stock Award Agreement; or (ii) the date twelve (12)
months following such termination of Continuous Service (or such longer or
shorter period specified in the Stock Award Agreement, which period shall not
be less than six (6) months). If, after termination of Continuous Service,
the Participant does not exercise his or her Option within such
Post-Termination Exercise Period, the Option shall terminate.

(d)     Termination As a Result of Death. In the event
that a Participant’s Continuous Service terminates as a result of the
Participant’s death or a Participant dies within any applicable
Post-Termination Exercise Period, then such Participant’s Option may be
exercised (to the extent the Participant was entitled to exercise such Option
as of the date of death) by the Participant’s estate, by a Person who acquired
the right to exercise the Option by bequest or inheritance or by a Person
designated to exercise the option upon the Participant’s death pursuant to Section 7.8(b) or
7.9(b) below, at any time during the Post-Termination Exercise Period
ending on the earlier of: (i) the expiration of the term of the Option as set
forth in the Stock Award Agreement; or (ii) the date eighteen (18) months
following such termination of Continuous Service (or such longer or shorter
period specified in the Stock Award Agreement, which period shall not be less
than six (6) months). If, after termination of Continuous Service, the
Participant does not exercise his or her Option within such Post-Termination
Exercise Period, the Option shall terminate.

7.8   Special
Provisions for Incentive Stock Options.

(a)     Exercise Price. Subject to the provisions of Section 5.4
above, the exercise price of each Incentive Stock Option shall be not less than
one hundred percent (100%) of the Fair Market Value of the Common Stock subject
to the Incentive Stock Option on the date the Incentive Stock Option is
granted. Notwithstanding the foregoing, an Incentive Stock Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Incentive Stock Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

(b)     Transferability. An Incentive Stock Option shall not
be transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by

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the Participant.
Notwithstanding the foregoing, a Participant may, by delivering written notice
to the Company in a form satisfactory to the Company, designate a third party
who, in the event of the death of such Participant, shall thereafter be
entitled to exercise such Participant’s Incentive Stock Option.

(c)     $100,000 Limitation. To the extent that the aggregate
Fair Market Value (determined at the time of grant) of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Participant during any calendar year under all plans of the Company and its
Affiliates exceeds $100,000, the Incentive Stock Options or portions thereof
that exceed such limit (according to the order in which they were granted) shall
be treated as Nonstatutory Stock Options, notwithstanding any contrary
provision of the applicable Stock Award Agreement(s).

7.9   Special
Provisions for Nonstatutory Stock Options.

(a)     Exercise Price. Subject to the provisions of Section 5.4
above, the exercise price of each Nonstatutory Stock Option shall be not less
than eighty-five percent (85%) of the Fair Market Value of the Common Stock
subject to the Nonstatutory Stock Option on the date the Nonstatutory Stock
Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option
may be granted with an exercise price lower than that set forth in the
preceding sentence if such Nonstatutory Stock Option is granted pursuant to an
assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

(b)     Transferability. A Nonstatutory Stock Option shall
not be transferable except by will or by the laws of descent and distribution
and, to the extent provided in the Stock Award Agreement and as permitted by
CCR Title 10 at the time of the grant of the Nonstatutory Stock Option,
and shall be exercisable during the lifetime of the Participant only by the
Participant. If a Nonstatutory Stock Option does not provide for
transferability, then such Nonstatutory Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant.
Notwithstanding the foregoing, a Participant may, by delivering written notice
to the Company in a form satisfactory to the Company, designate a third party
who, in the event of the death of such Participant, shall thereafter be
entitled to exercise such Participant’s Nonstatutory Stock Option.

8.      STOCK BONUSES.

8.1   Stock Award
Agreements for Stock Bonuses.  Each
Stock Award Agreement for a stock bonus shall be in such form and shall contain
such terms and conditions as the Board or Committee shall deem appropriate. The
terms and conditions of such Stock Award Agreements may change from time to
time, and the terms and conditions of Stock Award Agreements for separate stock
bonuses need not be identical; provided,
however, that each Stock Award
Agreement for a stock bonus shall include (through incorporation of provisions
hereof by reference in the Stock Award Agreement or otherwise) the substance of
the provisions set forth in this Section 8.

8.2   Consideration.  A stock bonus may be awarded in
consideration for past services actually rendered to the Company or an Affiliate
for its benefit.

8.3   Termination of
Participant’s Continuous Service.  In
the event that a Participant’s Continuous Service terminates, the Company may
reacquire, for no consideration, any or all of the shares of Common Stock held
by the Participant that have not vested as of the date of termination under the
terms of the Stock Award Agreement for the stock bonus.

8.4   Transferability.  Rights to acquire shares of Common Stock
under the Stock Award Agreement for a stock bonus shall not be transferable except
by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant.

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9.      RESTRICTED STOCK AWARDS.

9.1   Stock Award
Agreements for Restricted Stock Awards.  Each
Stock Award Agreement for a Restricted Stock Award shall be in such form and
shall contain such terms and conditions as the Board or Committee shall deem
appropriate. The terms and conditions of such Stock Award Agreements may change
from time to time, and the terms and conditions of Stock Award Agreements for
separate Restricted Stock Awards need not be identical; provided, however,
that each Stock Award Agreement for a Restricted Stock Award shall include
(through incorporation of provisions hereof by reference in the Stock Award
Agreement or otherwise) the substance of the provisions set forth in this Section 9.

9.2   Purchase
Price.  At the time of grant of a
Restricted Stock Award, the Board or Committee will determine the price to be
paid by the Participant for each share of Common Stock subject to such
Restricted Stock Award. Subject to the provisions of Section 5.4 above,
the purchase price of Restricted Stock Awards shall not be less than
eighty-five percent (85%) of the Fair Market Value of the Common Stock on the
date such Restricted Stock Award is made or at the time the purchase is
consummated. A Restricted Stock Award may be awarded as a stock bonus (i.e.,
with no cash purchase price to be paid) to the extent permissible under
applicable law.

9.3   Consideration.  At the time of the grant of a Restricted
Stock Award, the Board will determine the consideration permissible for the
payment of the purchase price of the Restricted Stock Award. The purchase price
of Common Stock acquired pursuant to the Stock Award Agreement for the
Restricted Stock Award shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board, according to a deferred
payment or other similar arrangement with the Participant; (iii) by
services rendered or to be rendered to the Company; or (iii) in any other
form of legal consideration that may be acceptable to the Board in its
discretion.

9.4   Termination of
Participant’s Continuous Service.  Subject
to Section 6.7, in the event that a Participant’s Continuous Service terminates,
the Company may repurchase or otherwise reacquire any or all of the shares of
Common Stock held by the Participant that have not vested as of the date of
termination under the terms of the Stock Award Agreement for such Participant’s
Restricted Stock Award.

9.5   Transferability.  Rights to acquire shares of Common Stock
under the Stock Award Agreement for a Restricted Stock Award shall not be
transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by the
Participant.

10.   ADJUSTMENTS UPON CHANGES IN STOCK.

10.1    Capitalization
Adjustments.  If any change is made
in, or other event occurs with respect to, the Common Stock of the Company
without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate structure
or other transaction (each a “Capitalization Adjustment”)), the Plan will be
appropriately adjusted in the class and maximum number of securities subject to
the Plan pursuant to Section 4.1, and the outstanding Stock Awards will be
appropriately adjusted in the class and number of securities and price per
share of Common Stock subject to such outstanding Stock Awards; provided, however,
that the conversion of any convertible securities of the Company shall not be
treated as a transaction “without receipt of consideration” by the Company and
shall not give rise to a Capitalization Adjustment pursuant to this Section 10.1.
The Board or Committee shall make such adjustments, which shall be final,
binding and conclusive.

10.2    Dissolution
or Liquidation.  In the event of a
dissolution or liquidation of the Company, then all outstanding Stock Awards
shall terminate immediately prior to the completion of such dissolution or
liquidation, and shares of Common Stock subject to any repurchase option in
favor of the Company may

 

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be repurchased by
the Company, notwithstanding the fact whether or not the applicable Participant’s
Continuous Service has terminated.

10.3    Corporate Transaction.

(a)     In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may (but need not) assume or
continue any or all Stock Awards outstanding under the Plan or may (but need
not) substitute similar stock awards for Stock Awards outstanding under the
Plan (including an award to acquire the same consideration paid to the
stockholders or the Company, as the case may be, pursuant to the Corporate
Transaction), and any reacquisition or repurchase rights held by the Company in
respect of Common Stock issued pursuant to Stock Awards may be assigned by the
Company to the successor of the Company or to the acquiring corporation (or
such successor’s or acquiring corporation’s parent company), if any, in
connection with such Corporate Transaction. In the event any surviving
corporation or acquiring corporation elects to assume or continue any or all
Stock Awards outstanding under the Plan, such Stock Awards shall remain in
effect in accordance with the terms of this Plan and the applicable Stock Award
Agreements, but shall thereafter represent the right to receive (upon exercise
thereof in accordance with the terms of such Stock Awards, if applicable) for
each share of Common Stock underlying each such Stock Award such cash,
securities or other property that would have been received by the applicable
Participant had such Participant exercised such Stock Award immediately prior
to the effective time of the Corporate Transaction.

(b)     In the event that, in connection with a Corporate
Transaction, any surviving corporation or acquiring corporation does not assume
or continue any or all such outstanding Stock Awards or substitute similar
stock awards for such outstanding Stock Awards, then with respect to Stock
Awards that have not been assumed, continued or substituted, such Stock Awards
shall terminate if not exercised (if applicable) at or prior to the effective
time of such Corporate Transaction, and any reacquisition or repurchase rights
held by the Company with respect to such Stock Awards held by Participants
whose Continuous Service has not terminated shall (contingent upon the
effectiveness of the Corporate Transaction) lapse.

10.4    Change
in Control.  A Stock Award held by
any Participant whose Continuous Service has not terminated prior to the
effective time of a Change in Control may be subject to additional acceleration
of vesting and exercisability upon or after such Change in Control as may be
provided in the Stock Award Agreement for such Stock Award; provided, however,
that in the absence of any such provision in the Stock Award Agreement for such
Stock Award, no such acceleration shall occur.

11.   TERMINATION, SUSPENSION AND AMENDMENT.

11.1    Termination
or Suspension of the Plan.  The Board
may suspend or terminate the Plan at any time. Unless sooner terminated, the
Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is
adopted by the Board or approved by the stockholders of the Company, whichever
is earlier. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.

11.2    Amendment
of the Plan and Stock Awards.  Subject
to Section 11.3 below, the Board may, from time to time, amend the Plan or
any Stock Award in any manner it deems appropriate or necessary.
Notwithstanding the foregoing, except as expressly provided elsewhere in the
Plan, no amendment to the Plan shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary to
satisfy the requirements of Section 422 of the Code.

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11.3    No
Impairment.  No termination or
suspension of the Plan or amendment of the Plan or any Stock Award shall impair
rights of a Participant with respect to any outstanding Stock Award
unless the Company receives the written consent of such Participant.

12.   MISCELLANEOUS.

12.1    Compliance with Laws.

(a)     This Plan and the obligations of the Company with
respect to any Stock Awards granted hereunder shall be subject to all
applicable federal and state securities laws. If, after reasonable efforts, the
Company is unable to obtain from any applicable regulatory commission or agency
the authority that legal counsel for the Company deems necessary for the lawful
issuance and sale of Common Stock pursuant to such Stock Awards, then the
Company shall be relieved from any liability for failure to issue and sell
Common Stock in connection with such Stock Awards unless and until such
authority is obtained.

(b)     To facilitate the grant of any Stock Award, the
Committee may impose special terms for Stock Awards granted to Participants who
are foreign nationals or who are employed by the Company or any Affiliate
outside of the United States as the Board or Committee may consider necessary
or appropriate to accommodate differences in local laws, tax policies or
customs.

12.2    Severability.  If one or more provisions of this Plan
are held to be unenforceable under applicable law, such provision shall be
excluded from this Plan and the balance of the Plan shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.

12.3    Governing
Law.  The law of the State of
California shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state’s conflict of laws
rules.

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OF PAGE INTENTIONALLY LEFT BLANK]

 9
 

 

 

APPENDIX A

DEFINITIONS

“Affiliate” means any parent
corporation or subsidiary corporation of the Company, whether now or hereafter
existing, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code.

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

“Cause” means, with respect to a
particular Participant, the occurrence of any of the following:  (i) such Participant’s conviction of any
felony or any crime involving fraud; (ii) such Participant’s participation
(whether by affirmative act or omission) in a fraud or felonious act against
the Company and/or its Affiliates; (iii) such Participant’s violation of
any statutory or fiduciary duty, or duty of loyalty owed to the Company and/or
its Affiliates and which has a material adverse effect on the Company and/or
its Affiliates; (iv) such Participant’s violation of state or federal law
in connection with such Participant’s performance of such Participant’s job; (v) breach
of any material term of any contract between such Participant and the Company
and/or its Affiliates; and (vi) such Participant’s violation of any
material Company policy; provided,
however, that the final
determination that a termination is for Cause shall be made by the Board or
Committee, as applicable, in its sole and exclusive judgment and discretion.

“CCR Title 10” means Title 10 of the
California Code of Regulations, as amended from time to time.

“Change in Control” means any Corporate
Transaction or the occurrence, in any single transaction or in any series of
related transactions not approved by the Board, of any Person becoming the
Owner, directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s
then-outstanding securities; provided,
however, that notwithstanding the
foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the
Company or any Affiliate and the Participant shall supersede the foregoing definition
with respect to Stock Awards subject to such agreement (it being understood,
however, that if no definition of Change in Control or any analogous term is
set forth in such an individual written agreement, the foregoing definition
shall apply).

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

“Committee” means a committee of one (1) or
more members of the Board appointed by the Board in accordance with Section 3.2
of the Plan.

“Common Stock” means the Company’s common
stock, par value $0.001 per share.

“Company” means IT&E
International Group, Inc., a Delaware corporation.

“Consultant” means any person, including
an advisor, engaged by the Company or an Affiliate to render consulting or
advisory services and who is compensated for such services; provided, however,
that the term “Consultant” shall not include Directors who are not compensated
by the Company for their services as Directors, and the payment of a fee by the
Company for services which the Board determines in its sole discretion are
services as a Director shall not cause a Director to be considered a “Consultant”
for purposes of the Plan.

“Continuous Service” means that the Participant’s
service with the Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. A change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant’s service with the Company or an Affiliate, shall not terminate
a Participant’s Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate, or to a Director shall
not constitute an interruption of Continuous Service. The Board, Committee or
any authorized Officer of the Company, in that party’s sole discretion, may

 

 10
 

 

determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party,
including sick leave, military leave or any other personal leave.
Notwithstanding the foregoing, a leave of absence shall be treated as
Continuous Service for purposes of vesting in a Stock Award only to such extent
as may be provided in the Company’s leave of absence policy or in the written
terms of the Participant’s leave of absence.

“Corporate Transaction” means the occurrence, in a
single transaction or in a series of related transactions, of any one or more
of the following events:

(a)     there is consummated a
merger, consolidation or similar transaction involving (directly or indirectly)
the Company if, immediately after the consummation of such merger,
consolidation or similar transaction, the stockholders of the Company
immediately prior thereto do not Own, directly or indirectly, either: (i) outstanding
voting securities representing more than fifty percent (50%) of the combined
outstanding voting power of the surviving Entity in such merger, consolidation
or similar transaction; or (ii) more than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving Entity in such
merger, consolidation or similar transaction;

(b)     the stockholders of the
Company approve or the Board approves a plan of complete dissolution or
liquidation of the Company, or a complete dissolution or liquidation of the
Company shall otherwise occur; or

(c)     there is consummated a sale
of all or substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to an Entity more than fifty percent
(50%) of the combined voting power of the voting securities of which Entity is
Owned by stockholders of the Company in substantially the same proportion as
their Ownership of the Company immediately prior to such sale.

The term “Corporate Transaction” shall not include a sale
of assets, merger or other transaction effected exclusively for the purpose of
changing the domicile of the Company.

“Director” means a member of the
Board.

“Disability” means the inability of a
person, in the opinion of a qualified physician acceptable to the Company, to
perform the duties of that person’s position with the Company or an Affiliate
because of the sickness or injury of the person.

“Employee” means any person employed
by the Company or an Affiliate; provided,
however, that service as a
Director, or payment of a fee by the Company for services which the Board determines
in its sole discretion are services as a Director or as a member of the Board
of Directors of an Affiliate, shall not be sufficient to constitute “employment”
by the Company or such Affiliate.

“Entity” means any corporation
(including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization or entity.

“Fair Market Value” means, as of any date, the
value of the Common Stock determined by the Board in good faith and in a manner
consistent with CCR Title 10.

“Incentive Stock Option” means an option to purchase
shares of Common Stock that is intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

“Nonstatutory Stock
Option”
means an option to purchase shares of Common Stock that is not intended to
qualify as an Incentive Stock Option.

“Officer” means any person designated
by the Company as an officer.

 11
 

 

 

“Option” means an Incentive Stock
Option or a Nonstatutory Stock Option granted pursuant to the Plan.

A Person shall be deemed to “Own”, to have “Owned”, to be the “Owner” of, or to
have acquired “Ownership”
of securities if such Person, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares voting
power, which includes the power to vote or to direct the voting, with respect
to such securities.

“Participant” means a person to whom a
Stock Award is granted pursuant to the Plan or, if applicable, such other
person who holds an outstanding Stock Award.

“Person” means any natural person or
Entity.

“Plan” means this IT&E International
Group, Inc. 2005 Equity Incentive Plan.

“Restricted Stock Award” means an award of shares of
Common Stock, which is granted pursuant to the terms and conditions of Section 9
of the Plan.

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

“Stock Award” means any right granted
under the Plan, including an Option, a Restricted Stock Award or a stock bonus.

“Stock Award Agreement” means a written agreement
between the Company and a Participant evidencing the terms and conditions of an
individual Stock Award. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

“Ten Percent Stockholder” means a person who Owns (or
is deemed to Own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any of its Affiliates.

 

 12EXHIBIT 10.1

EQUIPMENT
LEASE COMMITMENT

THIS EQUIPMENT LEASE
COMMITMENT (“Agreement”) is made and entered into this 19th day of September,
2006, by and between DHW Leasing, L.L.C., a South Dakota limited liability
company, 230 S. Phillips Avenue, Suite 202, Sioux Falls, SD 57104 (“DHW”) and
Granite City Food & Brewery, Ltd., a Minnesota corporation, 5402 Parkdale,
Suite 101, St. Louis Park, MN 55416 (“GCFB”).

In consideration of the
mutual promises herein contained, and for other valuable consideration, the
parties agree as follows:

1.                                         Equipment Finance Lease.  On
the terms and conditions set forth in this Agreement, DHW agrees to provide
GCFB equipment leases of equipment costing up to Sixteen Million Dollars
($16,000,000).  Subject to the total cost
limitation of up to Sixteen Million Dollars ($16,000,000), the term stated in
Section 4 and the per restaurant minimum and maximum cost limitations set forth
below, DHW shall acquire and lease to GCFB all furniture, fixtures and
equipment, as specified by GCFB (the “Equipment”) including without limitation
computer office equipment, point of sale, hardware, software, smallwares and
brewery equipment reasonably necessary for the operation of up to sixteen (16)
GCFB restaurants.  DHW and GCFB will
enter into a master lease in the form attached hereto as Exhibit A (“Master
Lease”), which sets forth the general terms and conditions upon which each
restaurant equipment lease will be governed. 
Any capitalized terms not otherwise defined in this Agreement shall have
the meaning set forth in the Master Lease. 
A separate Schedule A will be completed and executed by the parties with
respect to each restaurant for which Equipment will be purchased under this
Agreement.  Each Schedule A (each
referred to as a “Lease”) will be for Equipment which costs a minimum of
$800,000 per restaurant and a maximum of $1,400,000 per restaurant.  Such amount shall include the sales and/or
use tax on such Equipment. 
Notwithstanding, DHW shall have the right to reject any request for
financing for any restaurant that is not being developed and constructed by
Dunham Capital Management, L.L.C.

2.                                         Rates, Payments and Fees.  The
payments due under any Schedule A shall be based on a five-year
amortization of the purchase price of the Equipment under such Schedule,
calculated at an interest rate equal to the blended rate resulting from the
following formula:

Bank Base Rate plus (6.00% X 80%)
plus (3.00% X 20%) = Lease Rate

For example if the Bank Base
Rate equals 8.5%, the Lease Rate equals:

8.50% + (6.00% X 80%) + (3.00% X 20%) =

8.5% + 4.8% + .6% = 13.9%

 

“Bank Base Rate” shall be
the actual interest rate charged by DHW’s lender with respect to the term loan
financing used to purchase the Equipment subject to any particular Lease.

GCFB shall pay DHW an
origination fee equal to 0.25% of the principal amount financed under each
Lease at the time each such Lease is executed by DHW and GCFB.  GCFB shall be responsible for all other
filing and recording fees connected with origination of each loan underlying a
Lease.  There shall be no other
origination, commitment or other fees charged to GCFB.

3.                                         DHW Financing.  DHW
shall enter into loan commitments substantially the same as the (i) two million
dollar ($2,000,000.00) loan commitment with Dacotah Bank dated September 8 with
no prepayment or refinancing penalty and accruing interest on any term loan
made pursuant to such commitment at a rate equal to New York Prime less 0.5% (“Dacotah
Bank Commitment”); (ii) a four million dollar ($4,000,000.00)  loan commitment with CorTrust Bank dated
September 1, 2006 with no prepayment or refinancing penalty and accruing
interest on any term loan made pursuant to such commitment at a rate equal to
Wall Street Journal Prime (“CorTrust Commitment”); and (iii) a ten million
dollar ($10,000,000.00) loan commitment with Great Western Bank, dated
September 1, 2006 with a 1% refinance penalty applied to term loans if
refinanced with outside debt and accruing interest on any term loan made
pursuant to such commitment at a rate equal to the five-year U.S. Treasury Rate
plus 350 basis points fixed for five (5) years (“Great Western Commitment”),
(collectively the Dacotah Bank Commitment, the CorTrust Commitment and the
Great Western Commitment are sometimes called the “Commitments”). All
Commitments shall provide term loans which amortize over a five-year term.  All Commitments shall permit prepayment of
any loan made pursuant to the Commitment on terms consistent with Section 3.c.
herein.

(a)                                          Each time that DHW and GCFB enter into an
Equipment Lease pursuant to the Master Lease, DHW shall execute a term loan
pursuant to one of the Commitments for an amount not to exceed the cost of the
Equipment.  DHW shall enter into term
loans which utilize the Dacotah Bank Commitment and the CorTrust Commitment to
the fullest extent possible before utilizing the Great Western Commitment
unless GCFB provides written direction to use the Great Western Commitment.

(b)                                         In the event that DHW finds it necessary to
replace one or more of the Commitments, DHW shall use its best efforts to
obtain a replacement Commitment acceptable to GCFB with substantially the same
or more favorable terms as the Commitment being replaced.  DHW shall pay each term loan underlying a
Lease in accordance with its terms.

(c)                                          In the event that GCFB desires to pre-pay any
Lease, it will be required to pay an amount equal to the outstanding principal
amount of the term loan underlying such Lease at the time of such prepayment,
in addition to the 

 2
 

 

refinance
penalty of 1% of the principal balance of the loan, if any, incurred by DHW on
any Great Western loan with respect to any refinance of such Lease with outside
debt.

(d)                                         DHW shall provide GCFB copies of the loan
documents used to finance the purchase of the Equipment and the amount of any
prepayment penalty for any proposed prepayment upon GCFB’s request.  Upon payment of such principal amount of the
financing underlying a Lease, GCFB shall not be required to pay any additional
payments under such Lease and if GCFB elects to purchase the Equipment subject
to such Lease, DHW shall deliver a bill of sale to GCFB conveying marketable
title to the Equipment to GCFB.

4.                                         Term and Termination.  This
Agreement shall be effective as of the date of execution and continue
thereafter until all payments under the Master Lease and Leases are paid in
full.  The offer of maximum
financing described in Section 1 above shall be available to purchase
Equipment  within 30  months after the date of the respective
Commitments described above, subject, however, to Great Western Bank’s annual
renewal of their Commitment.  Each Lease
shall be for a term of five (5) years unless the parties mutually agree in
writing otherwise.  GCFB shall not be
obligated to use this commitment to equip any particular restaurant.

5.                                         Conditions Precedent.  DHW’s
continued obligation to provide the financing under this Agreement is expressly
subject to the following conditions precedent, such conditions which shall be
met each time a new Lease is sought:

(a)                                          All representations and warranties made by
GCFB herein, as well as in any referenced attachment, are and remain true and
complete in all material respects.

(b)                                         GCFB has complied with all of the terms and
conditions of this Agreement and any referenced Lease or other attachment.

(c)                                          No event of default has occurred under the
terms and conditions of this Agreement or any Lease or attachment.

6.                                         Representations.  GCFB
makes to DHW the following representations and warranties:

(a)                                          No unsatisfied judgment or judgments have
been rendered against  GCFB.

(b)                                         No proceedings in bankruptcy have ever been
instituted by or against GCFB, and GCFB has never made an assignment for the
benefit of the creditors.

(c)                                          If required by DHW’s lender, the lender may
issue payment directly to suppliers or vendors of the Equipment under any
Lease.

 3
 

 

7.                                         Assignment.  GCFB agrees not to assign its
rights or obligations under this Agreement, nor any of the collateral documents
or other instruments executed pursuant hereto except as permitted by the terms
and conditions of the Master Lease.

8.                                         Quiet Possession.  DHW
shall pay the purchase price for any Equipment leased to GCFB and shall warrant
and defend title and quiet possession of the Equipment from any party claiming
title or the right of possession through DHW. 
DHW represents and warrants that title to the Equipment shall be
marketable and free from liens, security agreements, and other encumbrances
owned or claimed by parties prior in interest to DHW.

9.                                         GCFB’s Option to Purchase Equipment.  GCFB
shall have an option to purchase the Equipment subject to a Lease for $1.00
upon the payment in full of all rent payments due thereunder or upon prepayment
of the Lease.  DHW shall convey
marketable title to such Equipment to GCFB by Bill of Sale upon
receiving notice of GCFB’s exercise of such option and payment of the option
price of $1.00.

10.                                   Notices.  Any notices required or
permitted to be given under the terms and conditions of this Agreement shall be
given or made in writing and shall be deemed given when delivered by
telecopier, personally, or mailed in the United States, postage prepaid, first
class mail to the parties at the addresses provided in the introduction
on the first page of this Agreement, as updated from time to time by the parties.

11.                                   Successors.  This Agreement and all of its
covenants and conditions contained shall be for the benefit and shall
apply to and bind the parties hereto and their respective successors and
assigns.

12.                                   Conflict with Master Lease.  In
the event the terms and conditions of this Equipment Lease Commitment conflict
with the terms and conditions of the Master Lease, the terms and conditions of
the Master Lease shall prevail and be deemed controlling.

 4
 

 

Dated
this 19th day of September, 2006.

	
  

  	
  GRANITE CITY
  FOOD & BREWERY, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Peter P.
  Hausback

  	
   

  
	
   

  	
   

  	
  Peter P.
  Hausback

  
	
   

  	
   

  	
  Title: Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DHW LEASING, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald A
  Dunham, Jr.

  	
   

  
	
   

  	
  Title:

  	
  Managing Partner

  	
   

  
							

 

 5

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