Document:

IQ BIOMETRIX, INC.

                        2005 CONSULTANT COMPENSATION PLAN

1.    Purpose.

      The IQ Biometrix, Inc. 2005 Consultant Compensation Plan (the "Plan") is
intended to promote the interests of IQ Biometrix, Inc. and its subsidiaries
(collectively the "Corporation") by offering those outside consultants of the
Corporation who assist in the development and success of the business of the
Corporation, the opportunity to participate in a compensation plan designed to
reward them for their services and to encourage them to continue to provide
services to the Corporation.

2.    Definitions.

      For all purposes of this Plan, the following terms shall have the
following meanings:

      "Common Stock" means IQ Biometrix, Inc. common stock, $.01 par value.

      "Conditional Shares" means shares of Common Stock awarded under this Plan
subject to conditions imposed by the Administrator (as defined herein) or the
conditions set forth in Section 6.2 or both.

      "IQ Biometrix" means IQ Biometrix, Inc., a Delaware corporation.

      "Subsidiary" means any company of which IQ Biometrix, Inc. owns, directly
or indirectly, the majority of the combined voting power of all classes of
stock.

      "Unconditional Shares" means shares of Common Stock awarded under this
Plan subject to no conditions.

3.    Administration.

      The Plan shall be administered by a the Board of Directors of IQ
Biometrix, Inc. (the "Board") or a Administrator (the "Administrator") of not
less than two directors of IQ Biometrix selected by, and serving at the pleasure
of the Board (the "Administrator").

      IQ Biometrix or any Subsidiary will recommend to the Administrator persons
to whom shares may be awarded. The Administrator shall make all final decisions
with respect to the persons to whom awards shall be granted ("Participants"),
the number of shares that shall be covered by each award or sale, the time or
times at which awards shall be granted or sales shall be made, the timing of
when awards shall vest, the terms and provisions of the instruments by which
awards or sales shall be evidenced, the interpretation of the Plan and all
determinations necessary or advisable for its administration. The
Administrator's decisions, determinations and interpretations shall be final and
binding on all Participants.

<PAGE>

4.    Eligibility.

      Only individuals who are outside consultants, or directors, officers,
partners or employees of outside consultants, of IQ Biometrix or any Subsidiary
(a "Service Provider") shall be granted awards.

5.    Stock Subject to the Plan.

      The stock, which may be awarded or sold pursuant to this Plan, shall be
shares of Common Stock. When shares of Common Stock are awarded or sold, IQ
Biometrix may award or sell authorized but unissued Common Stock, or IQ
Biometrix may award or sell issued Common Stock held in its treasury. Each of
the respective boards of IQ Biometrix and all Subsidiaries involved in the award
or sale will fund the Plan to the extent so required to provide Common Stock for
the benefit of Participants. The total number of shares of Common Stock which
may be granted or sold under this Plan shall not exceed 250,000 shares in the
aggregate. Any shares awarded and later forfeited are again subject to award or
sale under the Plan.

6.    Share Awards and Sales.

      6.1   Grant of Share Awards.

      The Administrator may award to Participants Unconditional Shares and
Conditional Shares. The Administrator will determine for each Participant
selected to be awarded Unconditional Shares and Conditional Shares the time or
times when Unconditional Shares or Conditional Shares shall be awarded and the
number of shares of Common Stock to be covered by each Unconditional Shares or
Conditional Share award. Unless expressly specified as Conditional Shares by the
Administrator, all shares of Common Stock awarded under this Plan shall be
Unconditional Shares. No Unconditional Shares or Conditional Shares shall be
awarded unless IQ Biometrix (in the judgment of the Administrator) has received
from the Participant either (a) a full performance of the services for which the
Unconditional Shares or Conditional Shares are being awarded, or (b) (i) a
partial performance of the services for which the Unconditional Shares or
Conditional Shares are being awarded and the value of such partial performance
(in the judgment of the Administrator) equals or exceeds the aggregate par value
of the Unconditional Shares or Conditional Shares to be awarded and (ii) a
binding obligation from the Participant to provide in the future the remainder
of the services for which the Unconditional Shares or Conditional Shares are
being awarded.

                                      -2-
<PAGE>

      6.2   Conditions.

      Shares of Common Stock issued to a Participant as a Conditional Shares
award will be subject to the following conditions as well as all other
conditions imposed by the Administrator ("Share Conditions"):

            (a) Except as set forth in Paragraphs 6.4 and 6.5, if Share
      Conditions are not satisfied, Conditional Shares will be forfeited and
      returned to IQ Biometrix or, in the event such Conditional Shares were
      provided to the Participant from shares of Common Stock purchased by the
      Subsidiary, then the Conditional Shares will be returned to the
      Subsidiary. In either case, all rights of the Participant to such
      Conditional Shares will terminate without any payment of consideration by
      IQ Biometrix or the Subsidiary with which the Participant is associated,
      at such time as Participant ceases to be a Service Provider to IQ
      Biometrix or a Subsidiary.

            (b) During the condition period ("Condition Period") relating to a
      Conditional Share award, none of the Conditional Shares subject to such
      award may be sold, assigned, bequeathed, transferred, pledged,
      hypothecated or otherwise disposed of in any way by the Participant.

            (c) The Administrator may require the Participant to enter into an
      escrow agreement providing that the certificates representing Conditional
      Shares sold or granted pursuant to the Plan will remain in the physical
      custody of IQ Biometrix or the applicable Subsidiary or an escrow holder
      during the Condition Period.

            (d) Certificates representing Conditional Shares sold or granted
      pursuant to the Plan may bear a legend making an appropriate reference to
      the conditions imposed on the Conditional Shares.

            (e) The Administrator may impose other conditions on any Conditional
      Shares issued pursuant to the Plan as it may deem advisable, including
      without limitations, restrictions under the Securities Act of 1933, as
      amended, under the requirements of any stock exchange upon which such
      share or shares of the same class are then listed and under any state
      securities laws or other securities laws applicable to such shares.

      6.3   Rights of a Stockholder.

      Except as set forth in Paragraph 6.2(b), the recipient of a Conditional
Share award will have all of the rights of a stockholder of IQ Biometrix with
respect to the Conditional Shares, including the right to vote the Conditional
Shares and to receive all dividends or other distributions made with respect to
the Conditional Shares.

                                      -3-
<PAGE>

      6.4   Lapse of Conditions.

      In the event of the termination of association of a Participant during the
Condition Period by reason of death, disability, or termination of association,
the Administrator may, at its discretion, remove Share Conditions on Conditional
Shares.

      Conditional Shares to which the Share Conditions have not so lapsed will
be forfeited and returned to the Corporation as provided in Paragraph 6.2(a).

      6.5   Lapse of Conditions at Discretion of the Administrator.

      The Administrator may shorten the Condition Period or remove any or all
Share Conditions if, in the exercise of its absolute discretion, it determines
that such action is in the best interests of the Corporation and equitable to
the Participant.

      6.6   Listing and Registration of Shares.

      IQ Biometrix may, in its reasonable discretion, postpone the issuance
and/or delivery of any shares of Common Stock awarded or sold pursuant to this
Plan until completion of stock exchange listing, or registration, or other
qualification of such shares under any law, rule or regulation.

      6.7   Designation of Beneficiary.

      A Participant may, with the consent of the Administrator, designate a
person or persons to receive, in the event of death, any shares of Common Stock
to which such Participant would then be entitled pursuant to this Plan. Such
designation will be made upon forms supplied by and delivered to the
Administrator and may be revoked in writing by the Participant. If a Participant
fails effectively to designate a beneficiary, then such Participant's estate
will be deemed to be the beneficiary.

7.    Capital Adjustments.

      The number and consideration of Common Stock covered by each award granted
or each sale under this Plan and the total number of shares that may be granted
or sold under the Plan shall be proportionally adjusted to reflect, subject to
any required action by stockholders, any stock dividend or split,
recapitalization, merger, consolidation, spin-off, reorganization, combination
or exchange of shares or other similar corporate change.

8.    Approvals.

      The issuance of shares pursuant to this Plan is expressly conditioned upon
obtaining all necessary approvals from all regulatory agencies from which
approval is required.

                                      -4-
<PAGE>

9.    Investment Representations.

      As a condition to the Award, the Corporation may require the Participant
to represent and warrant at the time of any such exercise that the Shares are
being acquired only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Corporation, such a
representation is required.

10.   Effective Date of Plan.

      The effective date of the Plan is February 28, 2005.

11.   Term and Amendment of Plan.

      This Plan shall expire on December 31, 2005 (except to Conditional Shares
outstanding on that date). IQ Biometrix Board may terminate or amend the Plan in
any respect at any time, except no action of the IQ Biometrix Board, the
Administrator or IQ Biometrix's stockholders, however, may, without the consent
of a Participant, alter or impair such Participant's rights under any
Conditional Shares previously granted.

      Neither the Plan nor any Award shall confer upon a Participant any right
with respect to continuing the Participant's relationship as a Service Provider
with the Corporation, nor shall they interfere in any way with the Participant's
right or the Corporation's right to terminate such relationship at any time,
with or without cause.

12.   No Right of Association.

      Neither the action of IQ Biometrix in establishing this Plan, nor any
action taken by any IQ Biometrix Board or any Subsidiary or the Administrator,
nor any provision of the Plan itself, shall be construed to limit in any way the
right of IQ Biometrix to terminate a Participant's association with the
Corporation at any time.

13.   Withholding Taxes.

      IQ Biometrix or any Subsidiary, as applicable, shall have the right to
deduct withholding taxes from any payments made pursuant to the Plan or to make
such other provisions as it deems necessary or appropriate to satisfy its
obligations to withhold federal, state or local income or other taxes incurred
by reason of payment or the issuance of Common Stock under the Plan. Whenever
under the Plan, Common Stock is to be delivered upon vesting of Conditional
Shares, the Administrator shall be entitled to require as a condition of
delivery that the Participant remit or provide for the withholding of an amount
sufficient to satisfy all federal, state and other government withholding tax
requirements related thereto.

                                      -5-
<PAGE>

14.   Plan not a Trust.

      Nothing contained in the Plan and no action taken pursuant to the Plan
shall create or be construed to create a trust of any kind, or a fiduciary
relationship, between the Corporation and any Participant, the executor,
administrator or other personal representative, or designated beneficiary of
such Participant, or any other persons. If and to the extent that any
Participant or such Participant's executor, administrator or other personal
representative, as the case may be, acquires a right to receive any payment from
the Corporation pursuant to the Plan, such right shall be no greater than the
right of an unsecured general creditor of the Corporation.

15.   Notices.

      Each Participant shall be responsible for furnishing the Administrator
with the current and proper address for the mailing of notices and delivery of
Common Stock pursuant to the Plan. Any notices required or permitted to be given
shall be deemed given if addressed to the person to be notified at such address
given to the Administrator by such person and mailed by regular United States
mail, first-class and prepaid. If any item mailed to such address is returned as
undeliverable to the addressee, mailing will be suspended until the Participant
furnishes the proper address. This provision shall not be construed as requiring
the mailing of any notice or notification if such notice is not required under
the terms of the Plan or any applicable law.

16.   Severability of Provisions.

      If any provisions of this Plan shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions
hereof, and this Plan shall be construed and enforced as if such provisions had
not been included.

17.   Payment to Minors, etc.

      Any benefit payable to or for the benefit of a minor, an incompetent
person or other person incapable of receipting therefor shall be deemed paid
when paid to such person's guardian or the party providing or reasonably
appearing to provide for the care of such person, and such payment shall fully
discharge the Administrator, the IQ Biometrix Board, the Corporation and other
parties with respect thereto.

18.   Headings and Captions.

      The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.

                                      -6-
<PAGE>

19.   Controlling Law.

      This Plan shall be construed and enforced according to the laws of the
State of California to the extent not preempted by federal law, which shall
otherwise control.

20.   Enforcement of Rights.

      In the event the Corporation or a Participant is required to bring any
action to enforce the terms of this Plan, the prevailing party shall be
reimbursed by the non-prevailing party for all costs and fees, including actual
attorney fees, for bringing and pursuing such action.

                                      -7-EXHIBIT 10.53

                           NEOMEDIA TECHNOLOGIES, INC

                      POLICY STATEMENT ON ETHICAL BEHAVIOR

A. PURPOSE

      It is the policy of NeoMedia Technologies, Inc. (the "Company") to do
      business in compliance with all applicable laws, rules and regulations and
      accepted community ethical and moral standards. It has been the Company's
      longstanding policy to maintain the highest ethical standards in the
      conduct of its affairs and in its relationship with customers, suppliers,
      employees, advisors and the communities and countries in which its
      operations are located.

      As an integral member of the Company team, you are expected to accept
      certain responsibilities, adhere to acceptable business principles in
      matters of personal conduct, and exhibit a high degree of personal
      integrity at all times. This not only involves sincere respect for the
      rights and feelings of others, but also demands that in both your business
      and personal life, you refrain from any behavior that might be harmful to
      you, your co-workers, or the Company, or that might be viewed unfavorably
      by current or potential customers, or by the public at large. Whether you
      are on duty or off, your conduct reflects on the Company. You are,
      therefore, encouraged to observe the highest standards of professionalism
      at all times.

      It would be virtually impossible to cite examples of every type of
      activity which might give rise to a question of unethical conduct.
      Therefore, it is important that each of us rely on our own good judgment
      in the performance of our duties and responsibilities. When those
      situations occur where the proper course of action is unclear, request
      advice and counsel from an officer of the Company. The reputation and good
      name of the Company depends entirely upon the honesty and integrity of
      each one of us.

      Employees should read this Policy Statement with the following in mind:

      1.    The Company requires every employee to comply with these standards.

      2.    This list is not comprehensive. The Company encourages employees who
            have questions about these standards and their application to
            employee conduct to discuss them with their manager, the Company's
            counsel, or with the manager in charge of human resources or the
            Chief Financial Officer.

      3.    An employee who knows or has reason to know of any activity that
            violates or could violate these standards must promptly report the
            matter to the President or the Chief Financial Officer.

      4.    Each employee will be given a copy of this Policy Statement and be
            asked to sign an Employee Acknowledgement Form.

B. RESPONSIBILITY FOR POLICY ENFORCEMENT

      These principles set forth in this Policy Statement are to be strictly
      observed. Each manager should insure that appropriate procedures are in
      place such that at the time of employment or promotion into a management,
      supervisory, sales or purchasing position an acknowledged copy of this
      Policy Statement is obtained for permanent retention in the employees'
      personnel file.

      In January of each year,

      1.    each Corporate officer and senior management personnel will be asked
            to reaffirm this Policy Statement by signing and returning to the
            Corporate office a copy of this Policy Statement, and

      2.    each manager will ask all employees to reaffirm this Policy
            Statement by reviewing the statements with each employee, obtaining

                                    10.53-1
<PAGE>

            two signed copies on the attached form, one copy of which will be
            retained in the employee's personnel file. Each manager will notify
            the President or the Chief Financial Officer in writing of refusals
            to sign, or any exceptions requested to, this requirement.

      Because violations are serious matters, any infraction of this Policy
      Statement will subject an employee, without regard to position, to
      disciplinary action, which may include reprimand, probation, suspension,
      reduction in salary, demotion or discharge depending on the seriousness of
      the offense. Claims of ignorance, overzealousness, good intentions or lack
      of injury cannot excuse or justify acts which violate this Policy
      Statement. In addition, similar disciplinary measures will apply to any
      employee who directs, orders or approves of such prohibited activities, or
      has knowledge of them and does not act promptly to correct them in
      accordance with this Policy Statement. Appropriate disciplinary measures
      will be imposed on any employee who fails to carry out the management
      responsibility to insure that subordinates are adequately informed about
      this Policy Statement.

      The Company's attorneys will advise management concerning the legality of
      corporate conduct and, upon approval from an officer of the Company,
      should be called upon for guidance and counsel if any questions arise
      regarding Company policy or concerning any proposed activities that raise
      any question of possible conflict with this Policy Statement.

            As used in this Policy Statement, the term "Company" means and
      refers to NeoMedia Technologies, Inc. and all of its divisions and
      subsidiaries, domestic and foreign, and the term "employee" means and
      refers to the directors, officers and employees of NeoMedia Technologies,
      Inc. and all of its divisions and subsidiaries.

C. COMPLIANCE WITH LAWS AND REGULATIONS

      All activities of the Company and its employees shall be conducted in
      compliance with all federal, state and other laws, rules, regulations,
      orders and judicial decrees. An officer or employee having any question as
      to the validity of any action proposed to be taken on behalf of the
      Company shall submit it to the President for opinion.

      No claim of business exigency, increased sales or profits or business
      opportunity shall excuse any violation of this Policy Statement.

      In addition to literal compliance with legal requirements, each officer
      and employee must adhere to and comply with the overriding moral and
      ethical standards of our society in the conduct of business. The Company's
      interests are not served by unethical practices and activities even though
      not in technical violation of the law.

D.    GIFTS OF ALL KINDS.

      The purpose of the policy relating to entertainment, gifts, favors and
      gratuities is to avoid any implication that unfair or preferential
      treatment will be granted or received by the Company's employees in their
      course of dealing on behalf of the Company. A basic consideration should
      be that public disclosure would not be embarrassing to the Company or the
      recipient. The following guidelines are provided for the applications of
      this policy:

      1.    Gifts of cash, or cash equivalents, are never permissible regardless
            of amount;

      2.    An especially strict standard is imposed on gifts, services, or
            considerations of any kind from suppliers. Only those considerations
            which are deemed common business courtesies and are of an
            insignificant or nominal value to the recipient will be permitted;

      3.    Gifts, favors, and entertainment may be given to others at the
            Company's expense only if they are consistent with accepted business
            practices and are of such limited value that they cannot be
            considered as a bribe or payoff.

E. FAVORS.

      Employees may not give or receive any gifts or favors to or from any
      customer, supplier, competitor (other than a gift of nominal value)
      without the prior consent of a manager. In no event shall an employee give
      or receive a gift in the form of cash, stocks, bonds, options, or similar
      types of items.

      It is impermissible and may be unlawful to give, offer, or promise
      anything of value for the purpose of influencing someone in connection

                                    10.53-2
<PAGE>

      with Company business or a Company transaction. Similarly, it is
      impermissible and may be unlawful to solicit, demand, or accept anything
      of value with the intent of being influenced or rewarded in connection
      with any Company business or transaction. Therefore, no employee may give
      or receive any gift it could reasonably be viewed as being done to gain a
      business advantage.

      Employees are not prevented from incurring normal business-related
      expenses for entertainment or from accepting personal mementos of minimal
      value. It is acceptable to occasionally allow a supplier or customer to
      pay for a business meal.

F.    BRIBES.

      The Company will pay only those agents with whom it has a formal written
      agreement and from whom it has an invoice detailing the amount to be paid.
      Employees must insure that vouchers properly identify commissions.

      An employee may make payment to an agent for only the amount that
      constitutes the proper remuneration for the service rendered by the agent.
      An employee may not make a commission or any other payment if that
      employee knows or has reason to know the payment will be used as a bribe.

G.    ANTITRUST LAWS AND TRADE REGULATIONS

      The antitrust laws and regulations shall be observed at all times, in all
      situations, by all employees of the Company. At the heart of these laws,
      price-fixing, including the exchange of pricing information with
      competitors, and bid-rigging acts or arrangements with competitors to
      divide or allocate markets or customers or exclude others from the market,
      are absolutely prohibited. Jail sentences, fines and heavy damages have
      been imposed on individuals and corporations violating the antitrust laws.

      It is expected that employees whose activities are significantly affected
      by the antitrust laws will have a working knowledge of permissible and
      impermissible activities involved in their work and will consult with
      their superiors and the Company's attorneys, through appropriate channels,
      concerning any matter on which there is any question.

      It is the responsibility of all officers and managers to make this policy
      known to, and regularly stress its importance to, employees over whom they
      have supervision, and to administer and execute this policy. They shall
      continue to call upon the Company's attorneys, after having obtained
      proper authorization, for such assistance and reviews of compliance
      procedures as they and the Company's attorneys deem advisable to insure
      the effectiveness of this policy.

H.    ELECTION CAMPAIGN LAWS

      Federal law prohibits a corporation from making a contribution or
      expenditure in connection with any election at which Presidential and
      Vice-Presidential electors, or a Senator or Representative to Congress,
      are to be voted for, or in connection with any primary election or
      political convention or caucus held to select candidates for any of these
      offices.

      Most states of the United States and many foreign countries have similar
      laws prohibiting corporate political contributions in connection with
      elections to political office.

      It is the policy of the Company that such laws shall be observed by all
      officers and employees and that no corporate funds shall be contributed,
      expended or reimbursed, directly or indirectly, for any purpose contrary
      to such laws. Any officer or employee asked to contribute corporate funds,
      or to contribute funds in such a manner or amount leading to the belief
      that corporate funds would be used in connection with any political
      campaign, shall immediately notify the President or the Chief Financial
      Officer.

      This policy, it is emphasized, relates not only to direct disbursement of
      Company funds but also to indirect contributions or payments made in any
      form or through any means, such as through consultants, suppliers,

                                    10.53-3
<PAGE>

      customers or other third parties or by reimbursement to employees for
      personal contributions or payments.

      Even where political contributions are permitted by law, no Company funds
      in excess of $100.00 in each case shall be used for such purposes unless
      authorized by the President or Chief Financial Officer.

      Each manager is responsible;

      1.    for disseminating this policy and stressing its importance to
            employees over whom they have supervision who are in a position to
            make a contribution of corporate funds or obtain reimbursements from
            the Company therefore,

      2.    for reviewing with the Company's attorneys any questions as to the
            propriety of any contribution or expenditure which could possibly
            violate this policy before such contribution or expenditure is made,
            and

      3.    for reporting directly to the President or Chief Financial Officer
            of the Company any violation or apparent violation of this policy.

      This policy does not prohibit or discourage any officers or employees from
      engaging in political activities in an individual capacity on their own
      time at their own expense, or during an unpaid leave of absence, or from
      making political contributions or expenditures of their personal funds, or
      from expressing views and taking appropriate action as Company officers or
      employees with respect to legislative or political matters affecting the
      Company.

I.    RELATIONSHIP WITH GOVERNMENTAL AGENCIES AND OFFICIALS

      Payments, regardless of amount, or gifts or entertainment of more than
      nominal value to employees of the United States and any other domestic or
      foreign jurisdiction, regardless of motive, are viewed by the Company as
      improper and they are not to be permitted. In addition federal law imposes
      criminal penalties on Corporations and individuals violating these laws.
      It is important that all Company personnel realize that our relationship
      with agencies and public officials should in all respects be of such a
      nature that the integrity and reputation of the officials and the Company
      will not be impugned in the event the full details of the relationship,
      including any gifts or entertainment, become a matter of public record.

J.    PROPER ACCOUNTING FOR FUNDS, ASSETS AND DISBURSEMENTS

      Employees are forbidden to use, directly or indirectly, corporate funds
      and assets for any unlawful purpose or to accomplish any unlawful goal.
      The Company also prohibits the establishment or maintenance of undisclosed
      or unrecorded funds and assets.

      All reporting information should be accurate and timely. Employees may not
      make any false or misleading entries in any books and records.

      It is essential that at all times there be full and accurate accounting
      for funds and other assets of the Company by those entrusted with control
      over them and that all disbursements or uses of Company funds be legal and
      be fully documented, and be accurately recorded in its accounts. To this
      end, these standards must be observed:

      1.    The use of assets of the Company for any personal, unlawful or
            improper purpose is strictly prohibited.

      2.    No undisclosed or unrecorded fund or asset of the Company shall be
            established for any purpose.

      3.    No false or misleading entries shall be made in the books and
            records of the Company for any reason, and no employee shall engage
            in any arrangement that results in such prohibited acts.

      4.    No payment on behalf of the Company shall be approved without
            adequate supporting documentation or made with the intention or
            understanding that any part of such payment is to be used for any
            purpose other than that described by the documents supporting the
            payment.

      5.    No employee shall accept any bribes or kickbacks or make or offer
            any bribe to anyone within or outside the Company for any purpose of
            advantage to the Company or to any individual.

                                    10.53-4
<PAGE>

      6.    All employees having management, supervisory, auditing, accounting,
            bookkeeping, and other similar and related responsibilities shall be
            familiar with the accounting responsibilities of the Foreign Corrupt
            Practices Act, and regulations thereunder and shall observe its
            provisions.

      7.    Employees dealing with or in foreign countries shall be familiar
            with the provisions of the Foreign Corrupt Practices Act, and
            regulations thereunder, and shall observe its provisions in all
            transactions with foreign nationals or companies.

      Any officer or employee having knowledge of any act or circumstance which
      is prohibited by the foregoing paragraphs shall immediately report the
      matter to the President or Chief Financial Officer of the Company. Any
      question as to the legality of any payment for consultants or other
      similar fees shall be submitted to the President or Chief Financial
      Officer of the Company for opinion.

      The Chief Financial Officer shall maintain procedures to preclude the
      accumulation of funds which are not recorded on the books and records of
      the Company. The internal accounting department shall maintain suitable
      written audit and other controls to monitor compliance and reveal any
      violations of these policies.

K.    CONFLICTS OF INTEREST - OUTSIDE ACTIVITIES

      If an employee is hired for a position that gives the employee the
      authority to spend Company funds or set Company policy, it is an implicit
      condition of his or her employment that the employee use the authority in
      the Company's interest.

      Every employee is prohibited from partaking in any activity or association
      that creates or appears to create a conflict between the employee's
      personal interest and the Company's business interests. In addition, no
      employee must allow any situation or personal interests to interfere with
      the exercise of independent judgment or with that employee's ability to
      act in the best interests of the Company.

      The term "conflict of interest" describes any circumstance that would cast
      doubt on an employee's ability to act with total objectivity with regard
      to the Company's interest. Each employee is expected to avoid any action
      or involvement which would in any way compromise his or her actions on
      behalf of the Company.

      Circumstances in which a conflict of interest on the part of any employee
      shall be deemed to exist include, but are not limited to, the following:

      1.    Relationships with suppliers, contractors or customers:

            (a)   Ownership of a material interest in any supplier, contractor,
                  subcontractor, customer or other entity (other than an
                  affiliate of the Company) with which the Company does
                  business.

            (b)   Acting in any capacity - including director, officer, partner,
                  consultant, employee, distributor, agent or the like - for
                  suppliers, contractors, subcontractors, customers or other
                  entities (other than an affiliate of the Company) with which
                  the Company does business.

            (c)   Acceptance of payments, services or loans from a supplier,
                  contractor, subcontractor, customer or other entity (other
                  than an affiliate of the Company) with which the Company does
                  business. This includes gifts, trips, entertainment or other
                  favors of more than nominal value.

      2.    Ownership of property affected by Company action:

            (a)   Ownership or acquisition of property, the value of which is
                  likely to be affected by any action of the Company or
                  influenced by a decision or recommendation of the employee
                  owning such property.

            (b)   Ownership or acquisition of any property or interest where
                  confidential or unpublished information obtained through the
                  Company has in any way been considered in such ownership or
                  acquisition.

                                    10.53-5
<PAGE>

      3.    Appropriation or diversion of corporate opportunity:

            (a)   The appropriation by an officer or employee or the diversion
                  to others of any business opportunity in which it is known or
                  it could reasonably be anticipated that the Company would be
                  interested.

            (b)   The disclosure of any "insider" non-public information about
                  the Company.

      4.    Interest in or position with competitor:

            (a)   Ownership by an employee of a material interest in an
                  enterprise in competition with the Company.

            (b)   Acting as director, officer, partner, consultant, employee or
                  agent of any enterprise which is in competition with the
                  Company.

      These prohibitions and requirements are applicable to close relatives or
      members of the immediate family of any employee.

      An interest is "material" within the meaning of this policy when it is
      significant either by reference to the employee's financial position or in
      reference to the size of the entity involved. In case of doubt,
      materiality should be presumed.

      The legal form of ownership will be of no significance in determining
      whether a possible conflict of interest may exist except that ownership of
      an aggregate of less than one tenth of 1% of the securities of any
      corporation which has total assets of $50 million or more shall not be
      deemed to involve a conflict of interest under this policy and need not be
      reported.

      Employees shall not engage in any outside interest, activity or investment
      which may be adverse to the Company or conflict with its best interests.
      This includes engaging in an illegal or immoral enterprise, or accepting
      sales commissions, professional fees, or other forms of remuneration from
      outside the Company in connection with or resulting from duties or
      responsibilities as an employee of the Company; provided, however, that an
      employee may, with management approval, serve as a director of another
      company, whether or not an affiliate of the Company, give lectures,
      conduct seminars, publish articles and books, serve as a committee member,
      trustee, or regent or in other similar capacities, and retain any fees,
      honorariums, or similar compensation received therefor.

      Any outside interest or activities which have been fully disclosed to the
      Company, and approved in writing, either at the time of initial employment
      of subsequent thereto, may continue in the manner approved until and
      unless advised to the contrary. Any employee who has doubt as to the
      propriety of any outside interests or activities may obtain a
      clarification at any time by submitting a written request through the
      employee's manager and in cases where there is any doubt about the
      application of the policy to outside interests, the Company's attorneys,
      after receiving written authorization from the President or Chief
      Financial Officer to consult with the Company's attorneys.

L.    SECURITIES LAWS AND REGULATIONS

      United States securities regulations, which regulate transactions in
      corporate securities (such as stocks and bonds), impose severe sanctions
      against the use of "inside" information in the purchase and sale of
      securities by officers and employees of a company for their own benefit
      and profit. "Inside" information includes any important material fact
      which may affect the decision of anyone (including a speculator) to buy,
      sell or hold a particular security.

      Until released to the public, material information concerning Company
      plans, operations or financial results is considered "inside" information
      and, therefore, confidential. Such data does not belong to the individual
      employee who may handle it or otherwise come to know of it. For any person
      to use such information for personal benefit, especially in connection
      with the trading of any Company securities, or to disclose such
      information to others outside the Company, violates the law and is
      contrary to the Company's interests.

      Under the rules of the United States Securities and Exchange Commission,
      anyone who is in possession of material inside information is an
      "insider". This includes not only knowledgeable directors and officers but
      also non-management employees and persons outside the Company (wives,
      friends, brokers, printers and others) who may have acquired the
      information directly or indirectly from inside the Company. These rules

                                    10.53-6
<PAGE>

      prohibit insiders from trading in or recommending the Company's securities
      while such inside information remains undisclosed to the general public.
      The securities include not only those of the Company, but also the
      securities of any company of which you have acquired important, non-public
      knowledge as a result of your employment. Specifically, you should not
      trade in the securities of any company which, to your knowledge, is under
      consideration as an acquisition by the Company.

      The insider is allowed to purchase, sell or recommend Company securities
      or the securities of another company only after the inside information has
      been publicly disclosed, and then only after a reasonable time has elapsed
      for the information to be absorbed by the general public.

      The Company has rigidly defined channels through which data proposed for
      public release must flow. No disclosure of inside information which could
      be material should be made without first consulting the Company's
      attorneys, after receiving written authorization from the President or
      Chief Financial Officer to consult with the Company's attorneys.

      Regulations which are designed to protect the investing public are
      strictly enforced, and both civil and criminal action can be taken against
      both the individual and company involved. If you have any doubts as to
      whether a contemplated securities transaction might be deemed a violation
      of the "insider" trading rule, you may, after receiving proper
      authorization, request an opinion of the Company's attorneys.

      Employees are prohibited from investing in any of the Company's customers,
      suppliers, or competitors unless the securities are publicly traded and
      the investments are on the same terms available to the general public and
      not based on any "inside information". This prohibition applies to all
      forms of investments and to all employees, directors, officers, and agents
      of the Company and their immediate families.

      In general, employees should not have any financial interest in a
      customer, supplier, or competitor that could cause divided loyalty, or
      even the appearance of a divided loyalty.

M.    DISCLOSING CONFIDENTIAL INFORMATION

      Employees have an ethical duty not to disclose confidential information
      gleaned from business transactions and to protect confidential
      relationships between the Company and its customers, suppliers, and
      shareholders.

      Business information that has not been made public (e.g., insider
      information) shall not be released to private individuals, organizations,
      or government bodies unless demanded by legal process such as a subpoena
      or court order. Employees shall not use confidential information obtained
      in the course of their employment for the purpose of advancing any private
      interest or otherwise for personal gain.

      Employees should refer any requests for information (reference checks,
      credit reporting, etc.) about present or former employees of the Company
      to the manager in charge of the human resources function or Chief
      Financial Officer for handling.

N.    CONFIDENTIALITY

      The Company possesses and will continue to possess information that has
      been created, discovered, and developed by the Company; has been disclosed
      to the Company under the obligation of confidentiality; or has otherwise
      become known to the Company or in which property rights have been assigned
      or conveyed to the Company, which information is confidential to the
      Company and which information has commercial value in the business of the
      Company. All such information, except such information as is known or
      becomes known to the public without violation of the terms of this
      paragraph, is hereafter called "Confidential and Proprietary Information".

      By way of illustration, but not limitation, Confidential and Proprietary
      Information includes customer lists, subscriptions lists, details of
      author or consultant contracts, pricing policies, financial statements,
      projections, marketing plans or strategies, new product developments or
      plans, business acquisition plans, new personnel acquisition plans, trade
      secrets, operation methods, software and computer programs.

      During the employee's employment with the Company and after termination
      (whether voluntary or involuntary) of the employee's employment with the
      Company or any of its affiliates, the employee shall keep secret and

                                    10.53-7
<PAGE>

      retain in strictest confidence all such Confidential and Proprietary
      Information. Nothing contained in this paragraph shall be deemed to
      prevent the employee from utilizing his or her general knowledge,
      intellect, experience, and skills for gainful employment after termination
      of employment with the Company.

O.    DOCUMENTS

      All memoranda, notes, lists, records and other documents (and all copies
      thereof) made or complied by the employee or made available to the
      employee concerning the business of the Company or any of its affiliates
      shall be the Company's property and shall be delivered to the Company
      promptly upon the termination of the employee's employment with the
      Company or any of its affiliates or at any other time on request.

P.    OUTSIDE EMPLOYMENT

      No employee may serve as an employee, director, or officer of any supplier
      or customer without the prior written approval of the manager in charge of
      human resources or the Chief Financial Officer. An employee may never
      serve as an employee, director, or officer of a competitor but may serve
      as an adviser or consultant to a supplier or customer if that employee
      conducts business as a representative of the Company. Officers of the
      Company may not engage in any outside employment other than work as a
      volunteer, which is done on such individual's own time, and other than
      employment for an affiliated company of the Company which such employment
      has been approved by the Board of Directors of the Company.

      Any employee who does perform outside work has a special responsibility to
      avoid any conflict with the Company's business interests. Outside work
      cannot be performed on the Company's time other than any employment for an
      affiliated company of the Company which such employment has been approved
      by the Board of Directors of the Company.

Q.    DOING BUSINESS WITH FAMILY MEMBERS

      If an employee wishes to do business on behalf of the Company with a
      member of that employee's immediate family or other relative or with a
      company of which a relative is an officer, director, or principal, the
      employee must first disclose the relationship and obtain the prior written
      approval of the President or the Chief Financial Officer of the Company.

R.    PRODUCT INTEGRITY

      In connection with the design, development, testing, manufacture,
      advertising, sale or service of the Company's products, all employees are
      directed to adhere to engineering, manufacturing and ethical standards
      which provide proper design, performance, operation and maintenance of the
      Company's products.

      In connection with the sale of Company products, its advertising, sales
      promotions and customer presentations should accurately set forth any
      product specifications, capabilities or limitations. Representations of
      this type must be fully documented by sound engineering and testing. Any
      overstatement or misstatement either affirmatively or by omission is to be
      strictly avoided.

      At the time of its sale, each Company product should comply with all
      applicable industry standards, and all state, federal or foreign statutes,
      regulations or codes, then in existence.

      The individual or individuals having continuing design and manufacturing
      responsibility for a product shall be responsible for seeing that the
      product is in compliance with applicable standards, statutes, codes or
      regulations, and for certification of product compliance. Every such
      individual is expected to have and maintain a good working knowledge of
      the applicable standards, statutes, codes and regulations relating to the
      products over which they have supervisory responsibility.

      Managers who have any questions under this policy should call upon the
      President or the Chief Financial Officer for an opinion as to the proper
      course of action.

      Any employee who believes he has knowledge of any Company product not in
      conformity with these standards is expected to call it to the attention of
      the relevant management personnel so that appropriate corrective action
      can be taken.

                                    10.53-8
<PAGE>

S.    REPORTS AND ASSURANCES

      Officers and employees having responsibilities within the areas covered by
      this Policy Statement will be required to execute periodic written reports
      and assurances (under oath if deemed necessary) regarding compliance by
      them and by those under their supervision with the principles set forth in
      this Policy Statement.

                                    10.53-9
<PAGE>

                            EMPLOYEE ACKNOWLEDGEMENT

I hereby certify that I have received and read copies of the Company's Policy
Statement on Ethical Behavior and that I fully understand my obligations and
responsibilities and agree to fully comply with these policies.

      Witness:

      -------------------------       -----------------------------------------
      Signature                       Signature

      -------------------------       -----------------------------------------
      Name                            Name

      -------------------------       -----------------------------------------
      Date                            Division, Subsidiary or Branch

                                      -----------------------------------------
                                      Title

                                      -----------------------------------------
                                      Date

                                    10.53-10

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