Document:

Unassociated Document

     

    

      EMPLOYMENT
        AGREEMENT

      

      This
        employment agreement (this "Agreement"), dated as of May
        1st,
        2008 (the
        "Effective Date"), is made by and between Xin Ao Construction Materials,
        Inc., a
        British Virgin Islands corporation (the "Company"), and Yi YAO, with alias
        name
        Alex YAO, (the "Executive") (each, a "Party" and together, the
        "Parties").

       

      WHEREAS,
        the Company is seeking to be publicly traded company whose shares are quoted
        on
        the OTC Bulletin Board and to raise capital;

      WHEREAS,
        the Executive has and will provide managerial services in connection with
        certain matters relating to the Company during the period when the Executive
        is
        the Chief Financial Officer and Vice President of Finance (“VP of Finance”) of
        the Company and located in Beijing, China (“Management Services”);
        and

      

      WHEREAS,
        the Parties wish to establish the terms of the Executive's continued employment
        by the Company;

      NOW,
        THEREFORE, in consideration of the foregoing, of the mutual promises contained
        herein and of other good and valuable consideration, the receipt and sufficiency
        of which are hereby acknowledged, the Parties, intending to be legally bound,
        hereby agree as follows:

      

      1.  POSITION/DUTIES.

      

      (a)  During
        the Employment Term (as defined in Section 2 below), the Executive shall
        serve
        as a Chief Financial Officer and Vice President of Finance (“VP of Finance”) of
        the Company. In this capacity the Executive shall have such duties, authorities
        and responsibilities commensurate with the duties, authorities and
        responsibilities of persons in similar capacities in similarly sized companies
        and such other reasonable duties and responsibilities as the Board of Directors
        of the Company (the "Board") shall designate. The Executive shall report
        directly to both the Chief Executive Officer and Chairman of Board of Directors.
        The Executive shall obey the lawful directions of the Board, the Company's
        Chief
        Executive Officer and any other senior executive of the Company to whom the
        Executive reports and shall use his diligent efforts to promote the interests
        of
        the Company and to maintain and promote the reputation thereof. 

      

      (b)  During
        the Employment Term, the Executive shall use his best efforts to perform
        his
        duties under this Agreement and shall devote all of his business time, energy
        and skill in the performance of his duties with the Company. The Executive
        shall
        not during the Employment Term (except as a representative of the Company
        or
        with consent in writing of the Board) be directly or indirectly engaged or
        concerned in any other business activity. Notwithstanding the foregoing
        provisions, the Executive is not prohibited from (1) participating in
        charitable, civic, educational, professional or community affairs or serving
        on
        the board of directors or advisory committees of non-profit entities, and
        (2)
        managing his and his family's personal investments, in each case, provided that
        such
        activities in the aggregate do not materially interfere with his duties
        hereunder.

       

      
        
          
          

        

        
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      2.  EMPLOYMENT
        TERM.
        Except
        for earlier termination as provided in Section 5, the Executive's employment
        under this Agreement shall be for two (2) years starting on the Effective
        Date
        and ending on April 30th, 2010 (the "Initial Term"). Subject to Section 5,
        at
        the end of the Initial Term this Agreement may be extended for additional
        terms
        by mutual agreement of the parties (“Additional Term”). The amount of
        compensation payable to the Executive during any extension of the Initial
        Term
        shall be discussed and agreed upon by both parties 30 days before the Agreement
        termination date. The Initial Term and any Additional Term shall be referred
        to
        herein as the "Employment Term."

      

      3.  COMPENSATION.
        For
        the
        first year of the Initial Term, the Company agrees to pay the Executive the
        amount of RMB 30,000 (approximately US $4,273), on a monthly basis, which
        shall
        be payable in a single installment on the last day of each month (the “Monthly
        Salary”). For the second year of the Initial Term, the company agrees to raise
        the Monthly Salary to the amount of RMB 40,000 (approximately US $5,698).
        As
        additional compensation for providing the Management Services, the Company
        shall
        issue to the Executive a total of sixty five thousand (65,000) shares of
        the
        Company’s common stock, par value $.001 (the “Shares”), for services the
        Executive renders to the Company (the “Stock Grants”) during the Initial Term.
        The Shares become fully vested after one year from date of grant (the “Vesting
        Period”) and shall be subject to forfeiture as hereinafter provided in the event
        of termination of this Agreement by either party prior to the end of the
        Vesting
        Period. Upon termination of this Agreement for cause by the Company in
        accordance with the provisions of Section 5 hereof, the Company shall be
        entitled to cancel all or a portion of unvested Shares to the extent necessary
        to offset any losses or damages it has incurred as a result of breach of
        this
        Agreement by the Executive or to offset any debts or obligations of the
        Executive to the Company. In the event of termination of this Agreement by
        either party without cause prior to end of the Vesting Period, a portion
        of the
        Shares shall be forfeited by the Executive and shall be cancelled and returned
        to the status of authorized but unissued shares.  In that event, the number
        of Shares which the Executive shall be entitled to retain shall be based
        on a
        pro-rated calculation equal to the number of days of the Vesting Period served
        by the Executive, divided by 365 and multiplied by twenty five thousand or
        forty
        thousand as the case may be. The balance of the Shares shall be forfeited
        and
        cancelled.  

       

      25,000
        shares will be issued to the Executive, Yi YAO, upon the execution of this
        agreement, for the first year of service to be rendered to the Company. 40,000
        shares to compensate for the Executive’s second year of service will be issued
        to him on May 1st,
        2009.

       

      4.  OTHER
        BENEFITS. 

      

      (a)  Benefit
        Plans.
        The
        Executive shall be eligible to participate in any employee benefit plan of
        the
        Company, including, but not limited to, equity, pension, thrift, profit sharing,
        medical coverage, education, or other retirement or welfare benefits that
        the
        Company has adopted or may adopt, maintain or contribute to for the benefit
        of
        its senior executives, at a level commensurate with his positions, subject
        to
        satisfying the applicable eligibility requirements. The Company may at any
        time
        or from time to time amend, modify, suspend or terminate any employee benefit
        plan, program or arrangement for any reason in its sole discretion.

       

      
        
          
          

        

        
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      (b)  Vacation.
        The
        Executive shall be entitled to an annual paid vacation in accordance with
        the
        Company's policy applicable to senior executives from time to time in effect,
        but in no event less than two weeks per calendar year (as prorated for partial
        years), which vacation may be taken at such times as the Executive elects
        with
        due regard to the needs of the Company. The carry-over of vacation days shall
        be
        in accordance with the Company's policy applicable to senior executives from
        time to time in effect.

      

      (c)  Expenses.
        The
        Company shall reimburse the Executive for all invoiced and substantiated
        auto
        and telecommunication expenses, including, but not limited to gas, parking,
        regular maintenance, internet service, and domestic and international calls,
        but
        such expenses shall not exceed RMB 3,000 per quarter. The company shall
        reimburse the Executive upon presentation of auto & telecommunication
        expense report at end of each quarter. For all other expenses properly incurred
        for the Management Services, including, but not limited to travel, lodging,
        meals and business entertainment, the Company shall reimburse the Executive
        within one week of invoice. The Company shall not be responsible for any
        single
        expense in excess of US $500 unless it has given advance approval. 

       

      (d)  Relocation.To
        assist
        the Executive’s relocation to Beijing, the Company shall, on its own expense,
        provide the Executive with temporary accommodation while the he makes good
        efforts to search a long-term residence. The Company shall also, on its own
        expense, obtain a Beijing vehicle license plate & registration for the
        Executive. 

       

      5.  TERMINATION.
        The
        Executive's employment and the Employment Term shall terminate on the first
        of
        the following to occur:

      

      (a)  Disability.
        The
        thirtieth (30th)
        day
        following written notice by the Company to the Executive of termination due
        to
        Disability. For purposes of this Agreement, "Disability" shall mean a
        determination by the Company in accordance with applicable law that due to
        a
        physical or mental injury, infirmity or incapacity, the Executive is unable
        to
        perform the essential functions of his job with or without accommodation
        for 180
        days (whether or not consecutive) during any 12-month period.

      

      (b)  Death.
        Automatically on the date of death of the Executive.

      

      (c)  Cause.
        Immediately upon written notice by the Company to the Executive of a termination
        for Cause. "Cause" shall mean, as determined by the Board (or its designee)
        (1)
        conduct by the Executive in connection with his employment duties or
        responsibilities that is fraudulent, unlawful or grossly negligent; (2) the
        willful misconduct of the Executive; (3) the willful and continued failure
        of
        the Executive to perform the Executive's duties with the Company (other than
        any
        such failure resulting from incapacity due to physical or mental illness);
        (4)
        the commission by the Executive of any felony (or the equivalent under the
        law
        of the People's Republic of China) (other than traffic-related offenses)
        or any
        crime involving moral turpitude; (5) violation of any material policy of
        the
        Company or any material provision of the Company's code of conduct, employee
        handbook or similar documents; or (6) any material breach by the Executive
        of
        any provision of this Agreement or any other written agreement entered into
        by
        the Executive with the Company. 

       

      
        
          
          

        

        
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      (d)  Without
        Cause.
        On the
        sixtieth (60th) day following written notice by either Party to the other
        Party
        without Cause, other than for death or Disability of the Executive. The Company
        may also terminate this Agreement for cause at any time in the event of the
        failure of the Executive to perform duties assigned by the Company in a correct,
        timely and expeditious manner or in the event of material violation by the
        Executive of any term or condition of this Agreement.

      

      6.  CONSEQUENCES
        OF TERMINATION. 

      

      (a)  Disability.
        Upon
        termination of the Employment Term because of the Executive's Disability,
        the
        Company shall pay or provide to the Executive (1) any unpaid Base Salary
        and any
        accrued vacation through the date of termination; (2) any unpaid Annual Bonus
        accrued with respect to the fiscal year ending on or preceding the date of
        termination; (3) reimbursement for any unreimbursed expenses properly incurred
        through the date of termination; and (4) all other payments or benefits to
        which
        the Executive may be entitled under the terms of any applicable employee
        benefit
        plan, program or arrangement (collectively, "Accrued Benefits").

      

      (b)  Death.
        Upon the
        termination of the Employment Term because of the Executive's death, the
        Executive's estate shall be entitled to any Accrued Benefits.

      

      (c)  Termination
        for Cause.
        Upon the
        termination of the Employment Term by the Company for Cause or by either
        party
        in connection with a failure to renew this Agreement, the Company shall pay
        to
        the Executive any Accrued Benefits.

      

      (d)  Termination
        without Cause.
        Upon the
        termination of the Employment Term by the Company without Cause, the Company
        shall pay or provide to the Executive (1) the Accrued Benefits, and (2) subject
        to the Executive's execution (and non-revocation) of a general release of
        claims
        against the Company and its affiliates in a form reasonably requested by
        the
        Company, (A) continued payment of his Base Salary for two (2) months after
        termination, payable in accordance with the regular payroll practices of
        the
        Company, but off the payroll; and (B) payment of the Executive's cost of
        continued medical coverage for two (2) months after termination (subject
        to the
        Executive's co-payment of the costs in the same proportion as such costs
        were
        shared immediately prior to the date of termination).1
        Payments
        provided under this Section 6(d) shall be in lieu of any termination or
        severance payments or benefits for which the Executive may be eligible under
        any
        of the plans, policies or programs of the Company.

       

      ____________________

      
        1
          NOTE:
          typically the period for severance payments corresponds to the length of
          the
          noncompete and nonsolicitation period.

         

      

      
        
          
          

        

        
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      7.  NO
        ASSIGNMENT.
        This
        Agreement is personal to each of the Parties. Except as provided below, no
        Party
        may assign or delegate any rights or obligations hereunder without first
        obtaining the written consent of the other Party hereto; provided, however,
        that
        the Company may assign this Agreement to any successor (whether direct or
        indirect, by purchase, merger, consolidation or otherwise) to all or
        substantially all of the business or assets of the Company.

      

      8.  NOTICES.
        For the
        purpose of this Agreement, notices and all other communications provided
        for in
        this Agreement shall be in writing and shall be deemed to have been duly
        given
        (1) on the date of delivery if delivered by hand, (2) on the date of
        transmission, if delivered by confirmed facsimile, (3) on the first business
        day
        following the date of deposit if delivered by guaranteed overnight delivery
        service, or (4) on the fourth business day following the date delivered or
        mailed by United States registered or certified mail, return receipt requested,
        postage prepaid, addressed as follows:

      

        
          	 	
                  If
                    to the Executive:

                	 
	 	
                  At
                    the address (or to the facsimile number) shown on the records
                    of the
                    Company

                
	 	 	 
	 	
                  If
                    to the Company:

                	 
	 	 	 
	 	
                  Telephone:

                	
                  +86
                    10 8252 5301

                
	 	
                  Facsimile:

                	
                  +86
                    10 8252 5345

                
	 	
                  Attention:
                    

                	
                  Principal
                    Executive Officer/Principal Financial
                    Officer

                

        

        
          	 	
                  With
                    a copy to:

                
	 	 
	 	
                  Anslow
                    & Jaclin, LLP

                
	 	
                  195
                    Route 9 South, Suite 204

                
	 	
                  Manalapan,
                    New Jersey, 07726

                
	 	
                  Attention:
                    Richard Anslow

                
	 	
                  Facsimile:
                    (732) 577-1188

                

        

      

       

      or
        to
        such other address as either Party may have furnished to the other in writing
        in
        accordance herewith, except that notices of change of address shall be effective
        only upon receipt.

      

      9.  PROTECTION
        OF THE COMPANY'S BUSINESS. 

      

      (a)  Confidentiality.
        The
        Executive acknowledges that during the course of his employment by the Company
        (prior to and during the Employment Term) he has and will occupy a position
        of
        trust and confidence. The Executive shall hold in a fiduciary capacity for
        the
        benefit of the Company and shall not disclose to others or use, whether directly
        or indirectly, any Confidential Information regarding the Company, except
        (i) as
        in good faith deemed necessary by the Executive to perform his duties hereunder,
        (ii) to enforce any rights or defend any claims hereunder or under any other
        agreement to which the Executive is a party, provided that
        such
        disclosure is relevant to the enforcement of such rights or defense of such
        claims and is only disclosed in the formal proceedings related thereto, (iii)
        when required to do so by a court of law, by any governmental agency having
        supervisory authority over the business of the Company or by any administrative
        or legislative body (including a committee thereof) with jurisdiction to
        order
        him to divulge, disclose or make accessible such information, provided that
        the
        Executive shall give prompt written notice to the Company of such requirement,
        disclose no more information than is so required, and cooperate with any
        attempts by the Company to obtain a protective order or similar treatment,
        (iv)
        as to such Confidential Information that shall have become public or known
        in
        the Company's industry other than by the Executive's unauthorized disclosure,
        or
        (v) to the Executive's spouse, attorney and/or his personal tax and financial
        advisors as reasonably necessary or appropriate to advance the Executive's
        tax,
        financial and other personal planning (each an "Exempt Person"), provided,
        however,
        that
        any
        disclosure or use of Confidential Information by an Exempt Person shall be
        deemed to be a breach of this Section 9(a) by the Executive. The Executive
        shall
        take all reasonable steps to safeguard the Confidential Information and to
        protect it against disclosure, misuse, espionage, loss and theft. The Executive
        understands and agrees that the Executive shall acquire no rights to any
        such
        Confidential Information. "Confidential Information" shall mean information
        about the Company, its subsidiaries and affiliates, and their respective
        clients
        and customers that is not disclosed by the Company and that was learned by
        the
        Executive in the course of his employment by the Company, including, but
        not
        limited to, any proprietary knowledge, trade secrets, data and databases,
        formulae, sales, financial, marketing, training and technical information,
        client, customer, supplier and vendor lists, competitive strategies, computer
        programs and all papers, resumes, and records (including computer records)
        of
        the documents containing such Confidential Information.

       

      
        
          
          

        

        
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      (b)  Non-Competition.
        During
        the Employment Term and for the one-year period following the termination
        of the
        Executive's employment for any reason (the "Restricted Period"), the Executive
        shall not, directly or indirectly, without the prior written consent of the
        Company, provide employment (including self-employment), directorship,
        consultative or other services to any business, individual, partner, firm,
        corporation, or other entity that competes with any business conducted by
        the
        Company or any of its subsidiaries or affiliates on the date of the Executive's
        termination of employment or within one year of the Executive's termination
        of
        employment in the geographic locations where the Company and its subsidiaries
        or
        affiliates engage or propose to engage in such business (the "Business").
        Nothing herein shall prevent the Executive from having a passive ownership
        interest of not more than 2% of the outstanding securities of any entity
        engaged
        in the Business whose securities are traded on a national securities
        exchange.

      

      (c)  Non-Solicitation
        of Employees.
        The
        Executive recognizes that he possesses and will possess confidential information
        about other employees of the Company and its subsidiaries and affiliates
        relating to their education, experience, skills, abilities, compensation
        and
        benefits, and inter-personal relationships with customers of the Company
        and its
        subsidiaries and affiliates. The Executive recognizes that the information
        he
        possesses and will possess about these other employees is not generally known,
        is of substantial value to the Company and its subsidiaries and affiliates
        in
        developing their business and in securing and retaining customers, and has
        been
        and will be acquired by him because of his business position with the Company.
        The Executive agrees that, during the Restricted Period, he will not, directly
        or indirectly, (i) solicit or recruit any employee of the Company or any of
        its subsidiaries or affiliates (a "Current Employee") or any person who was
        an
        employee of the Company or any of its subsidiaries or affiliates during the
        twelve (12) month period immediately prior to the date the Executive's
        employment terminates (a "Former Employee") for the purpose of being employed
        by
        him or any other entity, or (ii) hire any Current Employee or Former
        Employee.

       

      
        
          
          

        

        
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      (d)  Non-Solicitation
        of Customers.
        The
        Executive agrees that, during the Restricted Period, he will not, directly
        or
        indirectly, solicit
        or attempt to solicit (i)
        any
        party who is a customer or client of the Company or its subsidiaries, who
        was a
        customer or client of the Company or its subsidiaries at any time during
        the
        twelve (12) month period immediately prior to the date the Executive's
        employment terminates or who is a prospective customer or client that has
        been
        identified and targeted by the Company or its subsidiaries for the purpose
        of
        marketing, selling or providing to any such party any services or products
        offered by or available from the Company or its subsidiaries, or (ii) any
        supplier or vendor to the Company or any subsidiary to terminate, reduce
        or
        alter negatively its relationship with the Company or any subsidiary or in
        any
        manner interfere with any agreement or contract between the Company or any
        subsidiary and such supplier or vendor.

      

      (e)  Property.
        The
        Executive acknowledges that all originals and copies of materials, records
        and
        documents generated by him or coming into his possession during his employment
        by the Company or its subsidiaries are the sole property of the Company and
        its
        subsidiaries ("Company Property"). During the Employment Term, and at all
        times
        thereafter, the Executive shall not remove, or cause to be removed, from
        the
        premises of the Company or its subsidiaries, copies of any record, file,
        memorandum, document, computer related information or equipment, or any other
        item relating to the business of the Company or its subsidiaries, except
        in
        furtherance of his duties under this Agreement. When the Executive's employment
        with the Company terminates, or upon request of the Company at any time,
        the
        Executive shall promptly deliver to the Company all copies of Company Property
        in his possession or control.

      

      (f)  Non-Disparagement.
        Executive shall not, and shall not induce others to, Disparage the Company
        or
        its subsidiaries or affiliates or their past and present officers, directors,
        employees or products. "Disparage" shall mean making comments or statements
        to
        the press, the Company's or its subsidiaries' or affiliates' employees or
        any
        individual or entity with whom the Company or its subsidiaries or affiliates
        has
        a business relationship which would adversely affect in any manner (1) the
        business of the Company or its subsidiaries or affiliates (including any
        products or business plans or prospects), or (2) the business reputation
        of the
        Company or its subsidiaries or affiliates, or any of their products, or their
        past or present officers, directors or employees.

      

      (g)  Cooperation.
        Subject
        to the Executive's other reasonable business commitments, following the
        Employment Term, the Executive shall be available to cooperate with the Company
        and its outside counsel and provide information with regard to any past,
        present, or future legal matters which relate to or arise out of the business
        the Executive conducted on behalf of the Company and its subsidiaries and
        affiliates, and, upon presentation of appropriate documentation, the Company
        shall compensate the Executive for any out-of-pocket expenses reasonably
        incurred by the Executive in connection therewith.

       

      
        
          
          

        

        
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      (h)  Equitable
        Relief and Other Remedies.
        The
        Executive acknowledges and agrees that the Company's remedies at law for
        a
        breach or threatened breach of any of the provisions of this Section 9 would
        be
        inadequate and, in recognition of this fact, the Executive agrees that, in
        the
        event of such a breach or threatened or attempted breach, in addition to
        any
        remedies at law, the Company, without posting any bond, shall be entitled
        to
        obtain equitable relief in the form of specific performance, a temporary
        restraining order, a temporary or permanent injunction or any other equitable
        remedy which may then be available. In addition, without limiting the Company's
        remedies for any breach of any restriction on the Executive set forth in
        this
        Section 9, except as required by law, the Executive shall not be entitled
        to any
        payments set forth in Section 6(d) hereof if the Executive has breached the
        covenants applicable to the Executive contained in this Section 9, the Executive
        will immediately return to the Company any such payments previously received
        under Section 6(d) upon such a breach, and, in the event of such breach,
        the
        Company will have no obligation to pay any of the amounts that remain payable
        by
        the Company under Section 6(d).

      

       Reformation.
        If it is
        determined by a court of competent jurisdiction in any state that any
        restriction in this Section 9 is excessive in duration or scope or is
        unreasonable or unenforceable under the laws of that state, it is the intention
        of the parties that such restriction may be modified or amended by the court
        to
        render it enforceable to the maximum extent permitted by the law of that
        state.
The
        Executive acknowledges that the restrictive covenants contained in this Section
        9 are a condition of this Agreement and are reasonable and valid in temporal
        scope and in all other respects.

      

      (i)  Liability.Notwithstanding
        the provisions in this Section 9 the Executive shall not be liable for any
        mistakes of fact, errors of judgment, for losses sustained by the Company
        or any
        subsidiary or for any acts or omissions of any kind, unless caused by the
        negligence or willful or intentional misconduct of the Executive or any person
        or entity acting for or on behalf of the Executive.

      

      (j)  Survival
        of Provisions.
        The
        obligations contained in this Section 9 shall survive in accordance with
        their
        terms the termination or expiration of the Executive's employment with the
        Company and shall be fully enforceable thereafter.

      

      10.  INDEMNIFICATION.
        The
        Company and its present and future subsidiaries jointly and severally agree
        to
        indemnify and hold harmless the Executive against any loss, claim, damage
        or
        liability whatsoever, (including reasonable attorneys’ fees and expenses), to
        which Executive may become subject as a result of performing any act (or
        omitting to perform any act) contemplated to be performed by the Executive
        pursuant to this Agreement unless such loss, claim, damage or liability arose
        out of Executive’s willful or intentional misconduct. The Company and its
        subsidiaries agree to reimburse Executive for the reasonable costs of defense
        of
        any action or investigation (including reasonable attorney’s fees and expenses)
        in connection with any loss, claim, damage or liability; provided, however,
        that
        the Executive agrees to repay the Company or its subsidiaries if it is
        ultimately determined that Executive is not entitled to such indemnity. In
        case
        any action, suit or proceeding shall be brought or threatened, in writing,
        against the Executive, he shall notify the Company within three (3) days
        after
        the Executive receives notice of such action, suit or threat. The Company
        shall
        have the right to appoint the Company’s counsel to defend such action, suit or
        proceeding, provided that Executive consents to such representation by such
        counsel, which consent shall not be unreasonably withheld. In the event any
        counsel appointed by the Company shall not be acceptable to Executive, then
        the
        Company shall have the right to appoint alternative counsel for the Executive
        reasonably acceptable to the Executive, until such time as acceptable counsel
        can be appointed. In any event, the Company shall, at its sole cost and expense,
        be entitled to appoint counsel to appear and participate as co-counsel in
        the
        defense thereof.  The Executive, or his co-counsel, shall promptly supply
        the Company’s counsel with copies of all documents, pleadings and notices which
        are filed, served or submitted in any of the aforementioned. The Executive
        shall
        not enter into any settlement without the prior written consent of the Company,
        which consent shall not be unreasonably withheld.

       

      
        
          
          

        

        
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      11.  SECTION
        HEADINGS AND INTERPRETATION.
        The
        section headings used in this Agreement are included solely for convenience
        and
        shall not affect, or be used in connection with, the interpretation of this
        Agreement. Expressions of inclusion used in this agreement are to be understood
        as being without limitation.

       

      12.  SEVERABILITY.
        The
        provisions of this Agreement shall be deemed severable and the invalidity
        of
        unenforceability of any provision shall not affect the validity or
        enforceability of the other provisions hereof. 

       

      13.  GOVERNING
        LAW AND VENUE.
        The
        validity, interpretation, construction and performance of this Agreement
        shall
        be governed by the laws of Beijing, China without regard to its conflicts
        of law
        principles. The
        Parties agree irrevocably to submit to the exclusive jurisdiction
        of the courts located in Beijing, China, for the purposes of any suit, action
        or
        other proceeding brought by any Party arising out of any breach of any of
        the
        provisions of this Agreement and hereby waive, and agree not to assert by
        way of
        motion, as a defense or otherwise, in any such suit, action, or proceeding,
        any
        claim that it is not personally subject to the jurisdiction of the above-named
        courts, that the suit, action or proceeding is brought in an inconvenient
        forum,
        that the venue of the suit, action or proceeding is improper, or that the
        provisions of this Agreement may not be enforced in or by such courts.

       

      14.  ENTIRE
        AGREEMENT.
        This
        Agreement contains the entire agreement between the Parties with respect
        to the
        subject matter hereof and supersedes all prior agreements, written or oral,
        with
        respect thereto. No agreements or representations, oral or otherwise, express
        or
        implied, with respect to the subject matter hereof have been made by either
        party which are not expressly set forth in this Agreement.

      

      15.  WAIVER
        AND AMENDMENT.
        No
        provision of this Agreement may be modified, amended, waived or discharged
        unless such waiver, modification, amendment or discharge is agreed to in
        writing
        and signed by the Executive and such officer or director as may be designated
        by
        the Board. No waiver by either Party at any time of any breach by the other
        Party hereto of, or compliance with, any condition or provision of this
        Agreement to be performed by such other Party shall be deemed a waiver or
        similar or dissimilar provisions or conditions at the same or at any prior
        or
        subsequent time. 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      16.  WITHHOLDING.
        The
        Company may withhold from any and all amounts payable under this Agreement
        such
        federal, state, local and foreign taxes as may be required to be withheld
        pursuant to any applicable law or regulation.

      

      17.  AUTHORITY
        AND NON-CONTRAVENTION.
        The
        Executive represents and warrants to the Company that he has the legal right
        to
        enter into this Agreement and to perform all of the obligations on his part
        to
        be performed hereunder in accordance with its terms and that he is not a
        party
        to any agreement or understanding, written or oral, which could prevent him
        form
        entering into this Agreement or performing all of his obligations
        hereunder.

      

      18.  COUNTERPARTS.
        This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original but all of which shall constitute one and the same
        instrument.

      

      

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF,
        the
        Parties have executed this Agreement as of the date first written
        above.

      

                      XIN
        AO CONSTRUCTION
        MATERIALS, INC.

       

      

                         
/s/
        Xianfu Han               

                      By:
Xianfu
        Han                 

                      Title:
        Chief
        Executive Officer

      

      

                      EXECUTIVE

      
                   
        /s/ Alex Yao                

      

      
         

        
          
            
            

          

          
            11Unassociated Document

     

    2007
      EQUITY INCENTIVE PLAN

    OF

    ECOSOLUTIONS
      INTL 

    

      
        	
                1.

              	
                PURPOSES
                  OF THE PLAN

              

      

       

    

    The
      purposes of the 2007 Equity Incentive Plan (the “Plan”) of ecoSolutions Intl
      (formerly “360 Interchange, Inc.”), a Nevada corporation (the “Company”), are
      to:

     

    1.1  Encourage
      selected employees, directors, consultants and advisers to improve operations
      and increase the profitability of the Company;

     

    1.2  Encourage
      selected employees, directors, consultants and advisers to accept or continue
      employment or association with the Company or its Affiliates; and

     

    1.3  Increase
      the interest of selected employees, directors, consultants and advisers in
      the
      Company’s welfare through participation in the growth in value of the common
      stock of the Company (the “Common Stock”). All references herein to stock or
      shares, unless otherwise specified, shall mean Common Stock.

    

      
        	
                2.

              	
                TYPES
                  OF AWARDS; ELIGIBLE
                  PERSONS

              

      

       

    

    2.1  The
      Administrator (as defined below) may, from time to time, take the following
      action, separately or in combination, under the Plan: (i) grant “incentive stock
      options” (“ISOs”) intended to satisfy the requirements of Section 422 of the
      Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
      “Code”); (ii) grant “non-qualified options” (“NQOs,” and together with ISOs,
“Options”); (iii) grant or sell Common Stock subject to restrictions
      (“restricted stock”) and (iv) grant stock appreciation rights (any such right
      would permit the holder to receive the excess of the fair market value of Common
      Stock on the exercise date over its fair market value (or a greater base value)
      on the grant date (“SARs”)), either in tandem with Options or as separate and
      independent grants. Any such awards may be made to employees, including
      employees who are officers or directors, and to individuals described in Section
      1 of the Plan who the Administrator believes have made or will make a
      contribution to the Company or any Affiliate (as defined below); provided,
      however,
      that
      only a person who is an employee of the Company or any Affiliate at the date
      of
      the grant of an Option is eligible to receive ISOs under the Plan. The term
      “Affiliate” as used in the Plan means a parent or subsidiary corporation as
      defined in the applicable provisions (currently Sections 424(e) and (f),
      respectively) of the Code. The term “employee” includes an officer or director
      who is an employee of the Company. The term “consultant” includes persons
      employed by, or otherwise affiliated with, a consultant. The term “adviser”
includes persons employed by, or otherwise affiliated with, an
      adviser.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.2  Except
      as
      otherwise expressly set forth in the Plan, no right or benefit under the Plan
      shall be subject in any manner to anticipation, alienation, hypothecation,
      or
      charge, and any such attempted action shall be void. No right or benefit under
      the Plan shall in any manner be liable for or subject to debts, contracts,
      liabilities, or torts of any option holder or any other person except as
      otherwise may be expressly required by applicable law.

    

      
        	
                3.

              	
                STOCK
                  SUBJECT TO THE PLAN; MAXIMUM NUMBER OF
                  GRANTS

              

      

       

    

    Subject
      to the provisions of Sections 6.1.1 and 8.2 of the Plan, the total number of
      shares of Common Stock which may be offered, or issued as restricted stock
      or on
      the exercise of Options or SARs under the Plan shall not exceed ten million
      (10,000,000) shares of Common Stock. The shares subject to an Option or SAR
      granted under the Plan which expire, terminate or are cancelled unexercised
      shall become available again for grants under the Plan. If shares of restricted
      stock awarded under the Plan are forfeited to the Company or repurchased by
      the
      Company, the number of shares forfeited or repurchased shall again be available
      under the Plan. Where the exercise price of an Option is paid by means of the
      optionee’s surrender of previously owned shares of Common Stock or the Company’s
      withholding of shares otherwise issuable upon exercise of the Option as may
      be
      permitted herein, only the net number of shares issued and which remain
      outstanding in connection with such exercise shall be deemed “issued” and no
      longer available for issuance under the Plan. No eligible person shall be
      granted Options or other awards during any twelve-month period covering more
      than one million (1,000,000) shares.

    

      
        	
                4.

              	
                ADMINISTRATION

              

      

       

    

    4.1  The
      Plan
      shall be administered by the Board of Directors of the Company (the “Board”) or
      by a committee (the “Committee”) to which administration of the Plan, or of part
      of thereof, is delegated by the Board (in either case, the “Administrator”). The
      Board shall appoint and remove members of the Committee in its discretion in
      accordance with applicable laws. At the Board’s discretion, the Committee may be
      comprised solely of “non-employee directors” within the meaning of Rule 16b-3
      under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
“outside directors” within the meaning of Section 162(m) of the Code. The
      Administrator may delegate non-discretionary administrative duties to such
      employees of the Company as the Administrator deems proper and the Board, in
      its
      absolute discretion, may at any time and from time to time exercise any and
      all
      rights and duties of the Administrator under the Plan.

     

    4.2  Subject
      to the other provisions of the Plan, the Administrator shall have the authority,
      in its discretion: (i) to grant Options and SARs and grant or sell restricted
      stock; (ii) to determine the fair market value of the Common Stock subject
      to
      Options or other awards; (iii) to determine the exercise price of Options
      granted, which shall be no less than the fair market value of the Common Stock
      on the date of grant, the economic terms of SARs granted, which shall provide
      for a benefit of the appreciation on Common Stock over not less than the value
      of the Common Stock on the date of grant, or the offering price of restricted
      stock; (iv) to determine the persons to whom, and the time or times at which,
      Options or SARs shall be granted or restricted stock granted or sold, and the
      number of shares subject to each Option or SAR or the number of shares of
      restricted stock granted or sold; (v) to construe and interpret the terms and
      provisions of the Plan, of any applicable agreement and all Options and SARs
      granted under the Plan, and of any restricted stock award under the Plan; (vi)
      to prescribe, amend, and rescind rules and regulations relating to the Plan;
      (vii) to determine the terms and provisions of each Option and SAR granted
      and
      award of restricted stock (which need not be identical), including but not
      limited to, the time or times at which Options and SARs shall be exercisable
      or
      the time at which the restrictions on restricted stock shall lapse; (viii)
      with
      the consent of the grantee, to rescind any award or exercise of an Option or
      SAR
      and to modify or amend the terms of any Option, SAR or restricted stock; (ix)
      to
      reduce the purchase price of restricted stock; (x) to accelerate or defer (with
      the consent of the grantee) the exercise date of any Option or SAR or the date
      on which the restrictions on restricted stock lapse; (xi) to issue shares of
      restricted stock to an optionee in connection with the accelerated exercise
      of
      an Option by such optionee; (xii) to authorize any person to execute on behalf
      of the Company any instrument evidencing the grant of an Option. SAR or award
      of
      restricted stock; (xiii) to determine the duration and purposes of leaves of
      absence which may be granted to participants without constituting a termination
      of their employment for the purposes of the Plan; and (xiv) to make all other
      determinations deemed necessary or advisable for the administration of the
      Plan,
      any applicable agreement, Option, SAR or award of restricted stock.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    4.3  All
      questions of interpretation, implementation, and application of the Plan or
      any
      agreement or Option, SAR or award of restricted stock shall be determined by
      the
      Administrator, which determination shall be final and binding on all
      persons.

    

      
        	
                5.

              	
                GRANTING
                  OF OPTIONS AND SARS;
                  AGREEMENTS

              

      

       

    

    5.1  No
      Options or SARs shall be granted under the Plan after ten (10) years from the
      date of adoption of the Plan by the Board.

     

    5.2  Each
      Option and SAR shall be evidenced by a written agreement, in form satisfactory
      to the Administrator, executed by the Company and the person to whom such grant
      is made. In the event of a conflict between the terms or conditions of an
      agreement and the terms and conditions of the Plan, the terms and conditions
      of
      the Plan shall govern.

     

    5.3  Each
      agreement shall specify whether the Option it evidences is an NQO or an ISO,
      provided,
      however,
      all
      Options granted under the Plan to non-employee directors, consultants and
      advisers of the Company are intended to be NQOs.

     

    5.4  Subject
      to Section 6.3.3 with respect to ISOs, the Administrator may approve the grant
      of Options or SARs under the Plan to persons who are expected to become
      employees, directors, consultants or advisers of the Company, but are not
      employees, directors, consultants or advisers at the date of
      approval.

    

      
        	
                6.

              	
                TERMS
                  AND CONDITIONS OF OPTIONS AND
                  SARS

              

      

       

    

    Each
      Option and SAR granted under the Plan shall be subject to the terms and
      conditions set forth in Section 6.1. NQOs and SARs shall also be subject to
      the
      terms and conditions set forth in Section 6.2, but not those set forth in
      Section 6.3. ISOs shall also be subject to the terms and conditions set forth
      in
      Section 6.3, but not those set forth in Section 6.2. SARs shall be subject
      to
      the terms and conditions of Section 6.4.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    6.1  Terms
      and Conditions to Which All Options and SARs Are Subject.
      All
      Options and SARs granted under the Plan shall be subject to the following terms
      and conditions:

     

    6.1.1  Changes
      in Capital Structure.
      Subject
      to Section 6.1.2, if the Common Stock of the Company is changed by reason of
      a
      stock split, reverse stock split, stock dividend, recapitalization, combination
      or reclassification, or if the Company effects a spin-off of the Company’s
      subsidiary, appropriate adjustments shall be made by the Administrator, in
      its
      sole discretion, in (a) the number and class of shares of stock subject to
      the
      Plan and each Option and SAR outstanding under the Plan, and (b) the exercise
      price of each outstanding Option; provided,
      that
      the Company shall not be required to issue fractional shares as a result of
      any
      such adjustments. Any adjustment, however, in an outstanding Option shall be
      made without change in the total price applicable to the unexercised portion
      of
      the Option but with a corresponding adjustment in the price for each share
      covered by the unexercised portion of the Option. Adjustments under this Section
      6.1.1 shall be made by the Administrator, whose determination as to the nature
      of the adjustments that shall be made, and the extent thereof, shall be final,
      binding, and conclusive. If an adjustment under this Section 6.1.1 would result
      in a fractional share interest under an option or any installment, the
      Administrator’s decision as to inclusion or exclusion of that fractional share
      interest shall be final, but no fractional shares of stock shall be issued
      under
      the Plan on account of any such adjustment.

     

    6.1.2  Corporate
      Transactions.
      Except
      as otherwise provided in the applicable agreement, in the event of a Corporate
      Transaction (as defined below), the Administrator shall notify each holder
      of an
      Option or SAR at least thirty (30) days prior thereto or as soon as may be
      practicable. To the extent not then exercised all Options and SARs shall
      terminate immediately prior to the consummation of such Corporate Transaction
      unless the Administrator determines otherwise in its sole discretion;
provided.
      however,
      that
      the Administrator, in its sole discretion, may (i) permit exercise of any
      Options or SARs prior to their termination, even if such Options or SARs would
      not otherwise have been exercisable, and/or (ii) provide that all or certain
      of
      the outstanding Options and SARs shall be assumed or an equivalent Option or
      SAR
      substituted by an applicable successor corporation or entity or any Affiliate
      of
      the successor corporation or entity. A “Corporate Transaction” means (i) a
      liquidation or dissolution of the Company; (ii) a merger or consolidation of
      the
      Company with or into another corporation or entity (other than a merger with
      a
      wholly-owned subsidiary); (iii) a sale of all or substantially all of the assets
      of the Company; or (iv) a purchase or other acquisition of more than 50% of
      the
      outstanding stock of the Company by one person or by more than one person acting
      in concert.

     

    6.1.3  Time
      of Option or SAR Exercise.
      Subject
      to Section 5 and Section 6.3.4, an Option or SAR granted under the Plan shall
      be
      exercisable (a) immediately as of the effective date of the of the applicable
      agreement or (b) in accordance with a schedule or performance criteria as may
      be
      set by the Administrator and specified in the applicable agreement. However,
      in
      no case may an Option or SAR be exercisable until a written agreement in form
      and substance satisfactory to the Company is executed by the Company and the
      grantee.

     

    6.1.4  Grant
      Date.
      The
      date of grant of an Option or SAR under the Plan shall be the date approved
      or
      specified by the Administrator and reflected as the effective date of the
      applicable agreement.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    6.1.5  Non-Transferability
      of Rights.
      Except
      with the express written approval of the Administrator, which approval the
      Administrator is authorized to give only with respect to NQOs and SARs, no
      Option or SAR granted under the Plan shall be assignable or otherwise
      transferable by the grantee except by will or by the laws of descent and
      distribution. During the life of the grantee, an Option or SAR shall be
      exercisable only by the grantee or permitted transferee.

     

    6.1.6  Payment.
      Except
      as provided below, payment in full, in cash, shall be made for all Common Stock
      purchased at the time written notice of exercise of an Option is given to the
      Company and the proceeds of any payment shall be considered general funds of
      the
      Company. The Administrator, in the exercise of its absolute discretion after
      considering any tax, accounting and financial consequences, may authorize any
      one or more of the following additional methods of payment:

     

    (a)  Subject
      to the Sarbanes-Oxley Act of 2002, acceptance of the optionee’s full recourse
      promissory note for all or part of the Option price, payable on such terms
      and
      bearing such interest rate as determined by the Administrator (but in no event
      less than the minimum interest rate specified under the Code at which no
      additional interest or original issue discount would be imputed), which
      promissory note may be either secured or unsecured in such manner as the
      Administrator shall approve (including, without limitation, by a security
      interest in the shares of the Company);

     

    (b)  Subject
      to the discretion of the Administrator and the terms of the stock option
      agreement granting the Option, delivery by the optionee of shares of Common
      Stock already owned by the optionee for all or part of the Option price,
      provided the fair market value (determined as set forth in Section 6.1.9) of
      such shares of Common Stock is equal on the date of exercise to the Option
      price, or such portion thereof as the optionee is authorized to pay by delivery
      of such stock; 

     

    (c)  Subject
      to the discretion of the Administrator, through the surrender of shares of
      Common Stock then issuable upon exercise of the Option, provided the fair market
      value (determined as set forth in Section 6.1.9) of such shares of Common Stock
      is equal on the date of exercise to the Option price, or such portion thereof
      as
      the optionee is authorized to pay by surrender of such stock; and

     

    (d)  By
      means
      of so-called cashless exercises as permitted under applicable rules and
      regulations of the Securities and Exchange Commission and the Federal Reserve
      Board.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    6.1.7  Withholding
      and Employment Taxes.
      At the
      time of exercise and as a condition thereto, or at such other time as the amount
      of such obligation becomes determinable, the grantee of an Option or SAR shall
      remit to the Company in cash all applicable federal and state withholding and
      employment taxes. Such obligation to remit may be satisfied, if authorized
      by
      the Administrator in its sole discretion, after considering any tax, accounting
      and financial consequences, by the holder’s (i) delivery of a promissory note in
      the required amount on such terms as the Administrator deems appropriate, (ii)
      tendering to the Company previously owned shares of Common Stock or other
      securities of the Company with a fair market value equal to the required amount,
      or (iii) agreeing to have shares of Common Stock (with a fair market value
      equal
      to the required amount), which are acquired upon exercise of the Option or
      SAR,
      withheld by the Company.

     

    6.1.8  Other
      Provisions.
      Each
      Option and SAR granted under the Plan may contain such other terms, provisions,
      and conditions not inconsistent with the Plan as may be determined by the
      Administrator, and each ISO granted under the Plan shall include such provisions
      and conditions as are necessary to qualify the Option as an “incentive stock
      option” within the meaning of Section 422 of the Code.

     

    6.1.9  Determination
      of Value.
      For
      purposes of the Plan, the fair market value of Common Stock or other securities
      of the Company shall be determined as follows:

     

    (a)  If
      the
      stock of the Company is listed on a securities exchange or is regularly quoted
      by a recognized securities dealer, and selling prices are reported, its fair
      market value shall be the closing price of such stock on the date the value
      is
      to be determined, but if selling prices are not reported, its fair market value
      shall be the mean between the high bid and low asked prices for such stock
      on
      the date the value is to be determined (or if there are no quoted prices for
      the
      date of grant, then for the last preceding business day on which there were
      quoted prices).

     

    (b)  In
      the
      absence of an established market for the stock, the fair market value thereof
      shall be determined in good faith by the Administrator, with reference to the
      Company’s net worth, prospective earning power, dividend-paying capacity, and
      other relevant factors, including the goodwill of the Company, the economic
      outlook in the Company’s industry, the Company’s position in the industry, the
      Company’s management, and the values of stock of other corporations in the same
      or a similar line of business.

     

    6.1.10  Option
      and SAR Term.
      No
      Option or SAR shall be exercisable more than 10 years after the date of grant,
      or such lesser period of time as is set forth in the applicable agreement (the
      end of the maximum exercise period stated in the agreement is referred to in
      the
      Plan as the “Expiration Date”).

     

    6.2  Terms
      and Conditions to Which Only NQOs and SARs Are Subject.
      Options
      granted under the Plan which are designated as NQOs and SARs shall be subject
      to
      the following terms and conditions:

     

    6.2.1  Exercise
      Price.
      The
      exercise price of an NQO and the base value of an SAR shall be the amount
      determined by the Administrator as specified in the option or SAR agreement,
      but
      shall not be less than the fair market value of the Common Stock on the date
      of
      grant (determined under Section 6.1.9).

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    6.2.2  Termination
      of Employment.
      Except
      as otherwise provided in the applicable agreement, if for any reason a grantee
      ceases to be employed by the Company or any of its Affiliates, Options that
      are
      NQOs and SARs held at the date of termination (to the extent then exercisable)
      may be exercised in whole or in part at any time only within ninety (90) days
      of
      the date of such termination (but in no event after the Expiration Date). For
      purposes of this Section 6.2.2, “employment” includes service as a director,
      consultant or adviser. For purposes of this Section 6.2.2, a grantee’s
      employment shall not be deemed to terminate by reason of the grantee’s transfer
      from the Company to an Affiliate, or vice versa, or sick leave, military leave
      or other leave of absence approved by the Administrator, if the period of any
      such leave does not exceed ninety (90) days or, if longer, if the grantee’s
      right to reemployment by the Company or any Affiliate is guaranteed either
      contractually or by statute.

     

    6.3  Terms
      and Conditions to Which Only ISOs Are Subject.
      Options
      granted under the Plan which are designated as ISOs shall be subject to the
      following terms and conditions:

     

    6.3.1  Exercise
      Price.
      The
      exercise price of an ISO shall not be less than the fair market value
      (determined in accordance with Section 6.1.9) of the stock covered by the Option
      at the time the Option is granted. The exercise price of an ISO granted to
      any
      person who owns, directly or by attribution under the Code (currently Section
      424(d)), stock possessing more than ten percent (10%) of the total combined
      voting power of all classes of stock of the Company or of any Affiliate (a
“Ten
      Percent Stockholder”) shall in no event be less than one hundred ten percent
      (110%) of the fair market value (determined in accordance with Section 6.1.9)
      of
      the stock covered by the Option at the time the Option is granted.

     

    6.3.2  Disqualifying
      Dispositions.
      If
      stock acquired by exercise of an ISO granted pursuant to the Plan is disposed
      of
      in a “disqualifying disposition” within the meaning of Section 422 of the Code
      (a disposition within two (2) years from the date of grant of the Option or
      within one year after the issuance of such stock on exercise of the Option),
      the
      holder of the stock immediately before the disposition shall promptly notify
      the
      Company in writing of the date and terms of the disposition and shall provide
      such other information regarding the Option as the Company may reasonably
      require.

     

    6.3.3  Grant
      Date.
      If an
      ISO is granted in anticipation of employment as provided in Section 5.4, the
      Option shall be deemed granted, without further approval, on the date the
      grantee assumes the employment relationship forming the basis for such grant,
      and, in addition, satisfies all requirements of the Plan for Options granted
      on
      that date.

     

    6.3.4  Term.
      Notwithstanding Section 6.1.10, no ISO granted to any Ten Percent Stockholder
      shall be exercisable more than five (5) years after the date of
      grant.

     

    6.3.5  Termination
      of Employment.
      Except
      as otherwise provided in the stock option agreement, if for any reason an
      optionee ceases to be employed by the Company or any of its Affiliates, Options
      that are ISOs held at the date of termination (to the extent then exercisable)
      may be exercised in whole or in part at any time only within 90 days of the
      date
      of termination (but in no event after the Expiration Date). For purposes of
      this
      Section 6.3.5, an optionee’s employment shall not be deemed to terminate by
      reason of the optionee’s transfer from the Company to an Affiliate, or vice
      versa, or sick leave, military leave or other leave of absence approved by
      the
      Administrator, if the period of any such leave does not exceed ninety (90)
      days
      or, if longer, if the optionee’s right to reemployment by the Company or any
      Affiliate is guaranteed either contractually or by statute.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    6.4  Terms
      and Conditions Applicable Solely to SARs.
      In
      addition to the other terms and conditions applicable to SARs in this Section
      6,
      the holder shall be entitled to receive on exercise of an SAR only Common Stock
      at a fair market value equal to the benefit to be received by the
      exercise.

    

      
        	
                7.

              	
                MANNER
                  OF EXERCISE

              

      

       

    

    7.1  An
      optionee wishing to exercise an Option or SAR shall give written notice to
      the
      Company at its principal executive office, to the attention of the officer
      of
      the Company designated by the Administrator, accompanied by payment of the
      exercise price and/or withholding taxes as provided in Sections 6.1.6 and 6.1.7.
      The date the Company receives written notice of an exercise hereunder
      accompanied by the applicable payment will be considered as the date such Option
      or SAR was exercised.

     

    7.2  Promptly
      after receipt of written notice of exercise and the applicable payments called
      for by Section 7.1, the Company shall, without stock issue or transfer taxes
      to
      the holder or other person entitled to exercise the Option or SAR, deliver
      to
      the holder or such other person a certificate or certificates for the requisite
      number of shares of Common Stock. A holder or permitted transferee of an Option
      or SAR shall not have any privileges as a stockholder with respect to any shares
      of Common Stock to be issued until the date of issuance (as evidenced by the
      appropriate entry on the books of the Company or a duly authorized transfer
      agent) of such shares.

    

      
        	
                8.

              	
                RESTRICTED
                  STOCK

              

      

       

    

    8.1  Grant
      or Sale of Restricted Stock.
      

     

    8.1.1  No
      awards
      of restricted stock shall be granted under the Plan after ten (10) years from
      the date of adoption of the Plan by the Board.

     

    8.1.2  The
      Administrator may issue Common Stock under the Plan as a grant or for such
      consideration (including services, and, subject to the Sarbanes-Oxley Act of
      2002, promissory notes) as determined by the Administrator. Common Stock issued
      under the Plan shall be subject to the terms, conditions and restrictions
      determined by the Administrator. The restrictions may include restrictions
      concerning transferability, repurchase by the Company and forfeiture of the
      shares issued, together with such other restrictions as may be determined by
      the
      Administrator. If shares are subject to forfeiture or repurchase by the Company,
      all dividends or other distributions paid by the Company with respect to the
      shares may be retained by the Company until the shares are no longer subject
      to
      forfeiture or repurchase, at which time all accumulated amounts shall be paid
      to
      the recipient. All Common Stock issued pursuant to this Section 8 shall be
      subject to a purchase or grant agreement, which shall be executed by the Company
      and the prospective recipient of the Common Stock prior to the delivery of
      certificates representing such stock to the recipient. The purchase or grant
      agreement may contain any terms, conditions, restrictions, representations
      and
      warranties required by the Administrator. The certificates representing the
      shares shall bear any legends required by the Administrator. The Administrator
      may require any purchaser of restricted stock to pay to the Company in cash
      upon
      demand amounts necessary to satisfy any applicable federal, state or local
      tax
      withholding requirements. If the purchaser fails to pay the amount demanded,
      the
      Administrator may withhold that amount from other amounts payable by the Company
      to the purchaser, including salary, subject to applicable law. With the consent
      of the Administrator in its sole discretion, a purchaser may deliver Common
      Stock to the Company to satisfy this withholding obligation. Upon the issuance
      of restricted stock, the number of shares reserved for issuance under the Plan
      shall be reduced by the number of shares issued.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    8.2  Changes
      in Capital Structure.
      In the
      event of a change in the Company’s capital structure, as described in Section
      6.1.1, appropriate adjustments shall be made by the Administrator, in its sole
      discretion, in the number and class of restricted stock subject to the Plan
      and
      the restricted stock outstanding under the Plan; provided,
      however,
      that
      the Company shall not be required to issue fractional shares as a result of
      any
      such adjustments.

     

    8.3  Corporate
      Transactions.
      In the
      event of a Corporate Transaction, as defined in Section 6.1.2 hereof, to the
      extent not previously forfeited, all restricted stock shall be forfeited
      immediately prior to the consummation of such Corporate Transaction unless
      the
      Administrator determines otherwise in its sole discretion; provided,
      however,
      that
      the Administrator, in its sole discretion, may remove any restrictions as to
      any
      restricted stock. The Administrator may, in its sole discretion, provide that
      all outstanding restricted stock participate in the Corporate Transaction with
      an equivalent stock substituted by an applicable successor corporation subject
      to the restriction.

    

      
        	
                9.

              	
                EMPLOYMENT
                  OR CONSULTING RELATIONSHIP

              

      

       

    

    Nothing
      in the Plan or any Option granted under the Plan shall interfere with or limit
      in any way the right of the Company or of any of its Affiliates to terminate
      the
      employment, consulting or advising of any optionee or restricted stock holder
      at
      any time, nor confer upon any optionee or restricted stock holder any right
      to
      continue in the employ of, or consult with, or advise, the Company or any of
      its
      Affiliates.

    

      
        	
                10.

              	
                CONDITIONS
                  UPON ISSUANCE OF SHARES

              

      

       

    

    10.1  Securities
      Act.
      Shares
      of Common Stock shall not be issued pursuant to the exercise of an Option or
      the
      receipt of restricted stock unless the exercise of such Option or such receipt
      of restricted stock and the issuance and delivery of such shares pursuant
      thereto shall comply with all relevant provisions of law, including, without
      limitation, the Securities Act of 1933, as amended (the “Securities
      Act”).

     

    10.2  Non-Compete
      Agreement.
      As a
      further condition to the receipt of Common Stock pursuant to the exercise of
      an
      Option or the receipt of restricted stock, the optionee or recipient of
      restricted stock may be required not to render services for any organization,
      or
      engage directly or indirectly in any business, competitive with the Company
      at
      any time during which (i) an Option is outstanding to such Optionee and for
      six
      (6) months after any exercise of an Option or the receipt of Common Stock
      pursuant to the exercise of an Option and (ii) restricted stock is owned by
      such
      recipient and for six (6) months after the restrictions on such restricted
      stock
      lapse. Failure to comply with this condition shall cause such Option and the
      exercise or issuance of shares thereunder and/or the award of restricted stock
      to be rescinded and the benefit of such exercise, issuance or award to be repaid
      to the Company.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

      
        	
                11.

              	
                NON-EXCLUSIVITY
                  OF THE PLAN

              

      

       

    

    The
      adoption of the Plan shall not be construed as creating any limitations on
      the
      power of the Company to adopt such other incentive arrangements as it may deem
      desirable, including, without limitation, the granting of stock options other
      than under the Plan.

    

      
        	
                12.

              	
                MARKET
                  STAND-OFF

              

      

       

    

    Each
      optionee, holder of an SAR or recipient of restricted stock, if so requested
      by
      the Company or any representative of the underwriters in connection with any
      registration of the offering of any securities of the Company under the
      Securities Act, shall not sell or otherwise transfer any shares of Common Stock
      acquired upon exercise of Options, SARs or receipt of restricted stock during
      the 180-day period following the effective date of a registration statement
      of
      the Company filed under the Securities Act; provided,
      however,
      that
      such restriction shall apply only to a registration statement of the Company
      which includes securities to be sold on behalf of the Company to the public
      in
      an underwritten public offering under the Securities Act and the restriction
      period shall not exceed 90 days after the registration statement becomes
      effective.

    

      
        	
                13.

              	
                AMENDMENTS
                  TO PLAN

              

      

       

    

    The
      Board
      may at any time amend, alter, suspend or discontinue the Plan. Without the
      consent of an optionee, holder of an SAR or holder of restricted stock, no
      amendment, alteration, suspension or discontinuance may adversely affect such
      person’s outstanding Option(s), SAR(s) or the terms applicable to restricted
      stock except to conform the Plan and ISOs granted under the Plan to the
      requirements of federal or other tax laws relating to ISOs. No amendment,
      alteration, suspension or discontinuance shall require stockholder approval
      unless (a) stockholder approval is required to preserve incentive stock option
      treatment for federal income tax purposes or (b) the Board otherwise concludes
      that stockholder approval is advisable.

    

      
        	
                14.

              	
                EFFECTIVE
                  DATE OF PLAN; TERMINATION

              

      

       

    

    The
      Plan
      shall become effective upon adoption by the Board; provided,
      however,
      that no
      Option or SAR shall be exercisable unless and until written consent of the
      stockholders of the Company, or approval of stockholders of the Company voting
      at a validly called stockholders’ meeting, is obtained within twelve (12) months
      after adoption by the Board. If any Options or SARs are so granted and
      stockholder approval shall not have been obtained within twelve (12) months
      of
      the date of adoption of the Plan by the Board, such Options and SARs shall
      terminate retroactively as of the date they were granted. Awards may be made
      under the Plan and exercise of Options and SARs shall occur only after there
      has
      been compliance with all applicable federal and state securities laws. The
      Plan
      (but not Options and SARs previously granted under the Plan) shall terminate
      ten
      (10) years from the date of its adoption by the Board. Termination shall not
      affect any outstanding Options or SARs or the terms applicable to previously
      awarded restricted stock.

     

    
      
         

      

      
        10

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