Document:

2006 Stock Option Plan

    
      

    

    Exhibit
      10.21

    
      

    

    VALCENT
      PRODUCTS, INC.

    2006
      STOCK OPTION PLAN

    

    1. Purposes
      of and Benefits Under the Plan.
      This
      2006 Stock Option Plan (the “Plan”) is intended to encourage stock ownership by
      employees, consultants and directors of Valcent Products, Inc. and its
      controlled, affiliated and subsidiary entities (collectively, the
“Corporation”), so that they may acquire or increase their proprietary interest
      in the Corporation, and is intended to facilitate the Corporation’s efforts to:
      (i) induce qualified persons to become employees, officers and directors
      (whether or not they are employees) and consultants to the Corporation; (ii)
      compensate employees, officers, directors and consultants for services to the
      Corporation; and (iii) encourage such persons to remain in the employ of or
      associated with the Corporation and to put forth maximum efforts for the success
      of the Corporation. It is further intended that options granted by the Committee
      pursuant to Section 6 of this Plan shall constitute “incentive stock options”
(“Incentive Stock Options”) within the meaning of Section 422 of the Internal
      Revenue Code, and the regulations issued thereunder, and options granted by
      the
      Committee pursuant to Section 7 of this Plan shall constitute “non-qualified
      stock options” (“Non-qualified Stock Options”). The term “Options” includes both
      Incentive Stock Options and Non-qualified Stock Options.

    

    2. Definitions.
      As used
      in this Plan, the following words and phrases shall have the meanings
      indicated:

     

    (a) “Board”
      shall mean the Board of Directors of the Corporation.

    

    (b) “Bonus”
      means any Common Stock bonus issued pursuant to the provisions of this
      Plan.

    

    (c) “Committee”
      shall mean any Committee appointed by the Board to administer this Plan, if
      one
      has been appointed. If no Committee has been appointed, the term “Committee”
shall mean the Board.

    

    (d) “Common
      Stock” shall mean the Corporation’s common stock, without par
      value.

    

    (e) “Disability”
      shall mean a Recipient’s inability to engage in any substantial gainful activity
      by reason of any medically determinable physical or mental impairment that
      can
      be expected to result in death or that has lasted or can be expected to last
      for
      a continuous period of not less than 12 months. If the Recipient has a
      disability insurance policy, the term “Disability” shall be as defined
      therein.

    

    (f) “Fair
      Market Value” per share as of a particular date shall mean the last sale price
      of the Corporation’s Common Stock as reported on a national securities exchange
      or by NASDAQ, or if the quotation for the last sale reported is not available
      for the Corporation’s Common Stock, the average of the closing bid and asked
      prices of the Corporation’s Common Stock as so reported or, if such quotations
      are unavailable, the value determined by the Committee in accordance with its
      discretion in making a bona fide, good faith determination of fair market value.
      Fair Market Value shall be determined without regard to any restriction other
      than a restriction which, by its terms, never will lapse. In the case of Options
      and Bonuses granted at a time when the Corporation does not have a registration
      statement in effect relating to the shares issuable hereunder, the value at
      which the Bonus shares are issued may be determined by the Committee at a
      reasonable discount from Fair Market Value to reflect the restricted nature
      of
      the shares to be issued and the inability of the Recipient to sell those shares
      promptly.

    

    (g) “Recipient”
      means any person granted an Option or awarded a Bonus hereunder. 

    

    (h) “Internal
      Revenue Code” shall mean the United States Internal Revenue Code of 1986, as
      amended from time to time (codified as Title 26 of the United States Code)
      and
      any successor legislation.

    

    

    

    

    

    

    

    
      
         

        
        

      

      
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    3. Administration.

    

    (a) The
      Plan
      shall be administered by the Committee. The Committee shall have the authority
      in its discretion, subject to and not inconsistent with the express provisions
      of the Plan, to administer the Plan and to exercise all the powers and
      authorities either specifically conferred under the Plan or necessary or
      advisable in the administration of the Plan, including the authority: to grant
      Options and Bonuses; to determine the vesting schedule and other restrictions,
      if any, relating to Options and Bonuses; to determine the purchase price of
      the
      shares of Common Stock covered by each Option (the “Option Price”); to determine
      the persons to whom, and the time or times at which, Options and Bonuses shall
      be granted; to determine the number of shares to be covered by each Option
      or
      Bonus; to determine Fair Market Value per share; to interpret the Plan; to
      prescribe, amend and rescind rules and regulations relating to the Plan; to
      determine the terms and provisions of the Option agreements (which need not
      be
      identical) entered into in connection with Options granted under the Plan;
      and
      to make all other determinations deemed necessary or advisable for the
      administration of the Plan. The Committee may delegate to one or more of its
      members or to one or more agents such administrative duties as it may deem
      advisable, and the Committee or any person to whom it has delegated duties
      as
      aforesaid may employ one or more persons to render advice with respect to any
      responsibility the Committee or such person may have under the
      Plan.

    

    (b) Options
      and Bonuses granted under the Plan shall be evidenced by duly adopted
      resolutions of the Committee included in the minutes of the meeting at which
      they are adopted or in a unanimous written consent. 

    

    (c) The
      Committee shall endeavor to administer the Plan and grant Options and Bonuses
      hereunder in a manner that is compatible with the obligations of persons subject
      to Section 16 of the U.S. Securities Exchange Act of 1934 (the “1934 Act”),
      although compliance with Section 16 is the obligation of the Recipient, not
      the
      Corporation. Neither the Committee, the Board nor the Corporation can assume
      any
      legal responsibility for a Recipient’s compliance with his obligations under
      Section 16 of the 1934 Act. 

    

    (d) No
      member
      of the Committee or the Board shall be liable for any action taken or
      determination made in good faith with respect to the Plan or any Option or
      Bonus
      granted hereunder.

    

    4. Eligibility.

    

    (a) Subject
      to certain limitations hereinafter set forth, Options and Bonuses may be granted
      to employees (including officers) and consultants to and directors (whether
      or
      not they are employees) of the Corporation or its present or future divisions,
      affiliates and subsidiaries. In determining the persons to whom Options or
      Bonuses shall be granted and the number of shares to be covered by each Option
      or Bonus, the Committee shall take into account the duties of the respective
      persons, their present and potential contributions to the success of the
      Corporation, and such other factors as the Committee shall deem relevant to
      accomplish the purposes of the Plan.

    

    (b) A
      Recipient shall be eligible to receive more than one grant of an Option or
      Bonus
      during the term of the Plan, on the terms and subject to the restrictions herein
      set forth.

    

    5. Stock
      Reserved.

    

    (a) The
      stock
      subject to Options or Bonuses hereunder shall be shares of Common Stock. Such
      shares, in whole or in part, may be authorized but unissued shares or shares
      that shall have been or that may be reacquired by the Corporation. The aggregate
      number of shares of Common Stock as to which Options and Bonuses may be granted
      from time to time under the Plan shall not exceed 20% (the “Plan Maximum”) of
      the Company’s issued and outstanding shares of Common Stock. In addition, the
      aggregate number of shares of Common Stock to which Incentive Stock Options
      may
      be granted shall not exceed 3,100,000 shares out of the Plan Maximum. The
      aggregate number of shares of Common Stock that may be granted from time to
      time
      under the Plan shall be subject to adjustment as provided in Section 8(i)
      hereof.

    
      
         

        
        

      

      
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    5. Stock
      Reserved.
      -
      continued

     

    (b) If
      any
      Option outstanding under the Plan for any reason expires or is terminated
      without having been exercised in full, or if any Bonus granted is forfeited
      because of vesting or other restrictions imposed at the time of grant, the
      shares of Common Stock allocable to the unexercised portion of such Option
      or
      the forfeited portion of the Bonus shall become available for subsequent grants
      of Options and Bonuses under the Plan.

    

    6. Incentive
      Stock Options.
      

    

    (a) Options
      granted pursuant to this Section 6 are intended to constitute Incentive Stock
      Options and shall be subject to the following special terms and conditions,
      in
      addition to the general terms and conditions specified in Section 8 hereof.
      Only
      employees of the Corporation shall be entitled to receive Incentive Stock
      Options.

    

    (b) The
      aggregate Fair Market Value (determined as of the date the Incentive Stock
      Option is granted) of the shares of Common Stock with respect to which Incentive
      Stock Options granted under this and any other plan of the Corporation or any
      parent or subsidiary of the Corporation are exercisable for the first time
      by a
      Recipient during any calendar year may not exceed the amount set forth in
      Section 422(d) of the Internal Revenue Code.

    

    (c) Incentive
      Stock Options granted under this Plan are intended to satisfy all requirements
      for incentive stock options under Section 422 of the Internal Revenue Code
      and
      the Treasury Regulations promulgated thereunder and, notwithstanding any other
      provision of this Plan, the Plan and all Incentive Stock Options granted under
      it shall be so construed, and all contrary provisions shall be so limited in
      scope and effect and, to the extent they cannot be so limited, they shall be
      void.

    

    7. Non-qualified
      Stock Options.
      Options
      granted pursuant to this Section 7 are intended to constitute Non-qualified
      Stock Options and shall be subject only to the general terms and conditions
      specified in Section 8 hereof.

    

    8. Terms
      and Conditions of Options.
      Each
      Option granted pursuant to the Plan shall be evidenced by a written Option
      agreement between the Corporation and the Recipient, which agreement shall
      be
      substantially in the form of Exhibit
      A
      hereto
      as modified from time to time by the Committee in its discretion, and which
      shall comply with and be subject to the following terms and
      conditions:

    

    (a) Number
      of Shares.
      Each
      Option Agreement shall state the number of shares of Common Stock covered by
      the
      Option.

    

    (b) Type
      of Option.
      Each
      Option Agreement shall specifically identify the portion, if any, of the Option
      which constitutes an Incentive Stock Option and the portion, if any, which
      constitutes a Non-qualified Stock Option.

    

    (c) Option
      Price.
      Subject
      to adjustment as provided in Section 8 (i) hereof, each Option agreement shall
      state the Option Price, which shall be determined by the Committee subject
      only
      to the following restrictions:

    

    (1) Each
      Option Agreement shall state the Option Price, which (except as otherwise set
      forth in paragraphs 8(c)(2) and (3) hereof) shall not be less than 100% of
      the
      Fair Market Value per share on the date of grant of the Option.

    

    (2) Any
      Incentive Stock Option granted under the Plan to a person owning more than
      ten
      percent of the total combined voting power of the Common Stock shall be at
      a
      price of no less than 110% of the Fair Market Value per share on the date of
      grant of the Incentive Stock Option.

    

    (3) Any
      Non-qualified Stock Option granted under the Plan shall be at a price no less
      than 80% of the Fair Market Value per share on the date of grant of the
      Non-qualified Stock Option. 

    
      
         

        
        

      

      
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    8. Terms
      and
      Conditions of Options.
      -
      continued

    
 

    (4) The
      date
      on which the Committee adopts a resolution expressly granting an Option shall
      be
      considered the day on which such option is granted, unless a future date is
      specified in the resolution.

    

    (d) Term
      of Option.
      Each
      Option agreement shall state the period during and times at which the Option
      shall be exercis-able, in accordance with the following
      limitations:

    

    (1) The
      date
      on which the Committee adopts a resolution expressly granting an Option shall
      be
      considered the day on which such Option is granted, unless a future date is
      specified in the resolution, although any such grant shall not be effective
      until the Recipient has executed an Option agreement with respect to such
      Option.

    

    (2) The
      exercise period of any Option shall not exceed ten years from the date of grant
      of the Option.

    

    (3) Incentive
      Stock Options granted to a person owning more than ten percent of the total
      combined voting power of the Common Stock of the Corporation shall be for no
      more than five years.

    

    (4) The
      Committee shall have the authority to accelerate or extend the exercisability
      of
      any outstanding Option at such time and under such circumstances as it, in
      its
      sole discretion, deems appropriate. In any event, no exercise period may be
      so
      extended to increase the term of the Option beyond ten years from the date
      of
      the grant. 

    

    (5) The
      exercise period shall be subject to earlier termination as provided in Sections
      8(f) and 8(g) hereof, and, furthermore, shall be terminated upon surrender
      of
      the Option by the holder thereof if such surrender has been authorized in
      advance by the Committee.

    

    (e) Method
      of Exercise and Medium and Time of Payment.
      

    

    (1) An
      Option
      may be exercised as to any or all whole shares of Common Stock as to which
      it
      then is exercisable, provided, however, that no Option may be exercised as
      to
      less than 100 shares (or such number of shares as to which the Option is then
      exercisable if such number of shares is less than 100).

    

    (2) Each
      exercise of an Option granted hereunder, whether in whole or in part, shall
      be
      effected by written notice to the Secretary of the Corporation designating
      the
      number of shares as to which the Option is being exercised, and shall be
      accompanied by payment in full of the Option Price for the number of shares
      so
      designated, together with any written statements required by, or deemed by
      the
      Corporation’s counsel to be advisable pursuant to, any applicable securities
      laws.

    

    (3) The
      Option Price shall be paid in cash, or in shares of Common Stock having a Fair
      Market Value equal to such Option Price, or in property or in a combination
      of
      cash, shares and property and, subject to approval of the Committee, may be
      effected in whole or in part with funds received from the Corporation at the
      time of exercise as a compensatory cash payment. 

    

    (4) The
      Committee shall have the sole and absolute discretion to determine whether
      or
      not property other than cash or Common Stock may be used to purchase the shares
      of Common Stock hereunder and, if so, to determine the value of the property
      received.

    

    (5) The
      Recipient shall make provision for the withholding of taxes as required by
      Section 10 hereof.

    

    

    

    

    

      
        
           

          
          

        

        
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    8. Terms
      and
      Conditions of Options.
      -
      continued

     

    (f) Termination.
      

    (1) Unless
      otherwise provided in the Option Agreement by and between the Corporation and
      the Recipient, if the Recipient ceases to be an employee, officer, director
      or
      consultant of the Corporation (other than by reason of death, Disability or
      retirement), all Options theretofore granted to such Recipient but not
      theretofore exercised shall terminate three months following the date the
      Recipient ceased to be an employee, officer, director or consultant of the
      Corporation, and shall terminate upon the date of termination of employment
      or
      other relationship if discharged for cause.

    

    (2) Nothing
      in the Plan or in any Option or Bonus granted hereunder shall confer upon an
      individual any right to continue in the employ of or other relationship with
      the
      Corporation or interfere in any way with the right of the Corporation to
      terminate such employment or other relationship between the individual and
      the
      Corporation.

    

    (g) Death,
      Disability or Retirement of Recipient.
      Unless
      otherwise provided in the Option Agreement by and between the Corporation and
      the Recipient, if a Recipient shall die while an employee, officer, director
      or
      consultant of the Corporation, or within ninety days after the termination
      of
      such Recipient as an employee, officer, director or consultant, other than
      termination for cause, or if the Recipient’s relationship with the Corporation
      shall terminate by reason of Disability or retirement, all Options theretofore
      granted to such Recipient (whether or not otherwise exercisable) unless earlier
      terminated in accordance with their terms, may be exercised by the Recipient
      or
      by the Recipient’s estate or by a person who acquired the right to exercise such
      Options by bequest or inheritance or otherwise by reason of the death or
      Disability of the Recipient, at any time within one year after the date of
      death, Disability or retirement of the Recipient; provided, however, that in
      the
      case of Incentive Stock Options such one-year period shall be limited to three
      months in the case of retirement.

    

    (h) Transferability
      Restriction.

    

    (1) Options
      granted under the Plan shall not be transferable other than by will or by the
      laws of descent and distribution or pursuant to a qualified domestic relations
      order as defined by the Internal Revenue Code or Title I of the Employee
      Retirement Income Security Act of 1974, or the rules thereunder. Options may
      be
      exercised during the lifetime of the Recipient only by the Recipient and
      thereafter only by his legal representative.

    

    (2) Any
      attempted sale, pledge, assignment, hypothecation or other transfer of an Option
      contrary to the provisions hereof and/or the levy of any execution, attachment
      or similar process upon an Option, shall be null and void and without force
      or
      effect and shall result in a termination of the Option.

    

    (3) (A)
      As a
      condition to the transfer of any shares of Common Stock issued upon exercise
      of
      an Option granted under this Plan, the Corporation may require an opinion of
      counsel, satisfactory to the Corporation, to the effect that such transfer
      will
      not be in violation of the U.S. Securities Act of 1933, as amended (the “1933
      Act”) or any other applicable securities laws or that such transfer has been
      registered under federal and all applicable state securities laws. (B) Further,
      the Corporation shall be authorized to refrain from delivering or transferring
      shares of Common Stock issued under this Plan until the Committee determines
      that such delivery or transfer will not violate applicable securities laws
      and
      the Recipient has tendered to the Corporation any federal, state or local tax
      owed by the Recipient as a result of exercising the Option or disposing of
      any
      Common Stock when the Corporation has a legal liability to satisfy such tax.
      (C)
      The Corporation shall not be liable for damages due to delay in the delivery
      or
      issuance of any stock certificate for any reason whatsoever, including, but
      not
      limited to, a delay caused by listing requirements of any securities exchange
      or
      any registration requirements under the 1933 Act, the 1934 Act, or under any
      other state, federal or provincial law, rule or regulation. (D) The Corporation
      is under no obligation to take any action or incur any expense in order to
      register or qualify the delivery or transfer of shares of Common Stock under
      applicable securities laws or to perfect any exemption from such registration
      or
      qualification. (E) Furthermore, the Corporation will not be liable to any
      Recipient for failure to deliver or transfer shares of Common Stock if such
      failure is based upon the provisions of this paragraph.

    
      
         

        
        

      

      
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    8. Terms
      and
      Conditions of Options.
      -
      continued

    
 

    (i) Effect
      of Certain Changes.

    

    (1) If
      there
      is any change in the number of shares of outstanding Common Stock through the
      declaration of stock dividends, or through a recapitalization resulting in
      stock
      splits or combinations or exchanges of such shares, the number of shares of
      Common Stock available for Options and the number of such shares covered by
      outstanding Options, and the exercise price per share of the outstanding
      Options, shall be proportionately adjusted by the Committee to reflect any
      increase or decrease in the number of issued shares of Common Stock; provided,
      however, that any fractional shares resulting from such adjustment shall be
      eliminated.

    

    (2) In
      the
      event of the proposed dissolution or liquidation of the Corporation, or any
      corporate separation or division, including, but not limited to, split-up,
      split-off or spin-off, or a merger or consolidation of the Corporation with
      another corporation, the Committee may provide that the holder of each Option
      then exercisable shall have the right to exercise such Option (at its then
      current Option Price) solely for the kind and amount of shares of stock and
      other securities, property, cash or any combination thereof receivable upon
      such
      dissolution, liquidation, corporate separation or division, or merger or
      consolidation by a holder of the number of shares of Common Stock for which
      such
      Option might have been exercised immediately prior to such dissolution,
      liquidation, corporate separation or division, or merger or consolidation;
      or,
      in the alternative the Committee may provide that each Option granted under
      the
      Plan shall terminate as of a date fixed by the Committee; provided, however,
      that not less than 30 days’ written notice of the date so fixed shall be given
      to each Recipient, who shall have the right, during the period of 30 days
      preceding such termination, to exercise the Option as to all or any part of
      the
      shares of Common Stock covered thereby, including shares as to which such Option
      would not otherwise be exercisable.

    

    (3) Paragraph
      2 of this Section 8 (i) shall not apply to a merger or consolidation in which
      the Corporation is the surviving corporation and shares of Common Stock are
      not
      converted into or exchanged for stock, securities of any other corporation,
      cash
      or any other thing of value. Notwithstanding the preceding sentence, in case
      of
      any consolidation or merger of another corporation into the Corporation in
      which
      the Corporation is the surviving corporation and in which there is a
      reclassification or change (including a change to the right to receive cash
      or
      other property) of the shares of Common Stock (excluding a change in par value,
      or from no par value to par value, or any change as a result of a subdivision
      or
      combination, but including any change in such shares into two or more classes
      or
      series of shares), the Committee may provide that the holder of each Option
      then
      exercisable shall have the right to exercise such Option solely for the kind
      and
      amount of shares of stock and other securities (including those of any new
      direct or indirect parent of the Corporation), property, cash or any combination
      thereof receivable upon such reclassification, change, consolidation or merger
      by the holder of the number of shares of Common Stock for which such Option
      might have been exercised.

    

    (4) In
      the
      event of a change in the Common Stock of the Corporation as presently
      constituted into the same number of shares with a different par
      value, the shares resulting from any such change shall be deemed to be the
      Common Stock of the Corporation within the meaning of the Plan.

    

    (5) To
      the
      extent that the foregoing adjustments relate to stock or securities of the
      Corporation, such adjustments shall be made by the Committee, whose
      determination in that respect shall be final, binding and conclusive, provided
      that each Incentive Stock Option granted pursuant to this Plan shall not be
      adjusted in a manner that causes such option to fail to continue to qualify
      as
      an Incentive Stock Option within the meaning of Section 422 of the Internal
      Revenue Code.

    

    (6) Except
      as
      expressly provided in this Section 8(i), the Recipient shall have no rights
      by
      reason of any subdivision or consolidation of shares of stock of any class,
      or
      the payment of any stock dividend or any other increase or decrease in the
      number of shares of stock of any class, or by reason of any dissolution,
      liquidation, merger, or consolidation or spin-off of assets or stock of another
      corporation; and any issue by the Corporation of shares of stock of any class,
      or securities convertible into shares of stock of any class, shall not affect,
      and no adjustment by reason thereof shall be made with respect to, the number
      or
      price of shares of Common Stock subject to an Option. The grant of an Option
      pursuant to the Plan shall not affect in any way the right or power of the
      Corporation to make adjustments, reclassifications, reorganizations or changes
      of its capital or business structures, or to merge or consolidate, or to
      dissolve, liquidate, or sell or transfer all or any part of its business or
      assets.

    
      
         

        
        

      

      
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    8. Terms
      and
      Conditions of Options.
      -
      continued

    
 

    (j) No
      Rights as Shareholder - Non-Distributive Intent.

    

    (1) Neither
      a
      Recipient of an Option nor such Recipient’s legal representative, heir, legatee
      or distributee, shall be deemed to be the holder of, or to have any rights
      of a
      holder with respect to, any shares subject to such Option until after the Option
      is exercised and the shares are issued.

    

    (2) No
      adjustment shall be made for dividends (ordinary or extraordinary, whether
      in
      cash, securities or other property) or distributions or other rights for which
      the record date is prior to the date such stock certificate is issued, except
      as
      provided in Section 8(i) hereof.

    

    (3) Upon
      exercise of an Option at a time when there is no registration statement in
      effect under the 1933 Act relating to the shares issuable upon exercise, shares
      may be issued to the Recipient only if the Recipient represents and warrants
      in
      writing to the Corporation that the shares purchased are being acquired for
      investment and not with a view to the distribution thereof and provides the
      Corporation with sufficient information to establish an exemption from the
      registration requirements of the 1933 Act. A form of subscription agreement
      containing representations and warranties deemed sufficient as of the date
      of
      adoption of this Plan is attached hereto as Exhibit
      B.

    

    (4) No
      shares
      shall be issued upon the exercise of an Option unless and until there shall
      have
      been compliance with any then applicable requirements of the U.S. Securities
      and
      Exchange Commission or any other regulatory agencies having jurisdiction over
      the Corporation.

    

    (k) Other
      Provisions.
      Option
      Agreements authorized under the Plan may contain such other provisions,
      including, without limitation, (i) the imposition of restrictions upon the
      exercise, and (ii) in the case of an Incentive Stock Option, the inclusion
      of
      any condition not inconsistent with such Option qualifying as an Incentive
      Stock
      Option, as the Committee shall deem advisable.

    

    9. Grant
      of Stock Bonuses.
      In
      addition to, or in lieu of, the grant of an Option, the Committee may grant
      Bonuses.

    

    (a) At
      the
      time of grant of a Bonus, the Committee may impose a vesting period of up to
      ten
      years, and such other restrictions which it deems appropriate. Unless otherwise
      directed by the Committee at the time of grant of a Bonus, the Recipient shall
      be considered a shareholder of the Corporation as to the Bonus shares which
      have
      vested in the grantee at any time regardless of any forfeiture provisions which
      have not yet arisen.

    

    (b) The
      grant
      of a Bonus and the issuance and delivery of shares of Common Stock pursuant
      thereto shall be subject to approval by the Corporation’s counsel of all legal
      matters in connection therewith, including compliance with the requirements
      of
      the 1933 Act, the 1934 Act, other applicable securities laws, rules and
      regulations, and the requirements of any stock exchanges upon which the Common
      Stock then may be listed. Any certificates prepared to evidence Common Stock
      issued pursuant to a Bonus grant shall bear legends as the Corporation’s counsel
      may seem necessary or advisable. Included among the foregoing requirements,
      but
      without limitation, any Recipient of a Bonus at a time when a registration
      statement relating thereto is not effective under the 1933 Act shall execute
      a
      Subscription Agreement substantially in the form of Exhibit
      B.

    

    10. Agreement
      by Recipient Regarding Withholding Taxes.
      Each
      Recipient agrees that the Corporation, to the extent permitted or required
      by
      law, shall deduct a sufficient number of shares due to the Recipient upon
      exercise of the Option or the grant of a Bonus to allow the Corporation to
      pay
      federal, provincial, state and local taxes of any kind required by law to be
      withheld upon the exercise of such Option or payment of such Bonus from any
      payment of any kind otherwise due to the Recipient. The Corporation shall not
      be
      obligated to advise any Recipient of the existence of any tax or the amount
      which the Corporation will be so required to withhold.

    

    11. Term
      of Plan.
      Options
      and Bonuses may be granted under this Plan from time to time within a period
      of
      ten years from the date the Plan is adopted by the Board.

    
      
         

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    12. Amendment
      and Termination of the Plan.
      

    

    (a)     (1) Subject
      to the policies, rules and regulations of any lawful authority having
      jurisdiction (including any exchange with which the shares of the Corporation
      are listed for trading), the Board of Directors may at any time, without further
      action by the shareholders, amend the Plan or any Option granted hereunder
      in
      such respects as it may consider advisable and, without limiting the generality
      of the foregoing, it may do so to ensure that Options granted hereunder will
      comply with any provisions respecting stock options in the income tax and other
      laws in force in any country or jurisdiction of which any Option holders may
      from time to time be a resident or citizen, or it may at any time without action
      by shareholders terminate the Plan.

    

    (2) provided,
      however, that any amendment that would: (A) materially increase the number
      of
      securities issuable under the Plan to persons who are subject to Section 16(a)
      of the 1934 Act; or (B) grant eligibility to a class of persons who are subject
      to Section 16(a) of the 1934 Act and are not included within the terms of the
      Plan prior to the amendment; or (C) materially increase the benefits accruing
      to
      persons who are subject to Section 16(a) of the 1934 Act under the Plan; or
      (D)
      require shareholder approval under applicable state law, the rules and
      regulations of any national securities exchange on which the Corporation’s
      securities then may be listed, the Internal Revenue Code or any other applicable
      law, shall be subject to the approval of the shareholders of the Corporation
      as
      provided in Section 13 hereof.

    

    (3) provided
      further that any such increase or modification that may result from adjustments
      authorized by Section 8(i) hereof or which are required for compliance with
      the
      1934 Act, the Internal Revenue Code, the Employee Retirement Income Security
      Act
      of 1974, their rules or other laws or judicial order, shall not require such
      approval of the shareholders.

    

    (b) Except
      as
      provided in Section 8 hereof, no suspension, termination, modification or
      amendment of the Plan may adversely affect any Option previously granted, unless
      the written consent of the Recipient is obtained.

    

    13. Approval
      of Shareholders.
      The
      Plan shall take effect upon its adoption by the Board but shall be subject
      to
      approval at a duly called and held meeting of stockholders in conformance with
      the vote required by the Corporation’s governing documents, resolution of the
      Board, any other applicable law and the rules and regulations thereunder, or
      the
      rules and regulations of any national securities exchange upon which the
      Corporation’s Common Stock is listed and traded, each to the extent
      applicable.

    

    14. Termination
      of Right of Action.
      Every
      right of action arising out of or in connection with the Plan by or on behalf
      of
      the Corporation or any of its subsidiaries, or by any shareholder of the
      Corporation or any of its subsidiaries against any past, present or future
      member of the Board, or against any employee, or by an employee (past, present
      or future) against the Corporation or any of its subsidiaries, will,
      irrespective of the place where an action may be brought and irrespective of
      the
      place of residence of any such shareholder, director or employee, cease and
      be
      barred by the expiration of three years from the date of the act or omission
      in
      respect of which such right of action is alleged to have risen.

    

    15. Tax
      Litigation.
      The
      Corporation shall have the right, but not the obligation, to contest, at its
      expense, any tax ruling or decision, administrative or judicial, on any issue
      which is related to the Plan and which the Board believes to be important to
      holders of Options issued under the Plan and to conduct any such contest or
      any
      litigation arising therefrom to a final decision.

    

    16. Adoption.

    

    (a) This
      Plan
      was approved by resolution of the Board of Directors of the Corporation on
      December 14, 2006.

    
      
         

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    16. Adoption.
      -
      continued

    
 

    (b) If
      this
      Plan is not approved by the shareholders of the Corporation within 12 months
      of
      the date the Plan was approved by the Board as required by Section 422(b)(1)
      of
      the Internal Revenue Code, this Plan and any Options granted hereunder to
      Recipients shall be and remain effective, but the reference to Incentive Stock
      Options herein shall be deleted and all Options granted hereunder shall be
      Non-qualified Stock Options pursuant to Section 7 hereof. 

    

    

    [End
      of
      Plan]

    

    

    
      
        
           

        

        
        

      

      
        9

        
          

        

      

      
        
        

        
        

      

    

    Exhibit
      A

    

    

    FORM
      OF STOCK OPTION AGREEMENT

    

    

    STOCK
      OPTION AGREEMENT made as of this ___ day of ____________, ______, by and between
      Valcent Products, Inc., an Alberta corporation (the “Corporation”), and
      ________________ __________________________ (the “Recipient”).

    

    In
      accordance with the Corporation’s 2006 Stock Option Plan (the “Plan”), the
      provisions of which are incorporated herein by reference, the Corporation
      desires, in connection with the services of the Recipient, to provide the
      Recipient with an opportunity to acquire shares of the Corporation’s common
      stock, without par value (“Common Stock”) on favorable terms and thereby
      increase the Recipient’s proprietary interest in the Corporation and incentive
      to put forth maximum efforts for the success of the business of the Corporation.
      Capitalized terms used but not defined herein are used as defined in the
      Plan.

    

    NOW,
      THEREFORE, in consideration of the premises and mutual covenants herein set
      forth and other good and valuable consideration, the Corporation and the
      Recipient agree as follows:

    

    1. Confirmation
      of Grant of Option.
      Pursuant to a determination of the Committee or, in the absence of a Committee,
      by the Board of Directors of the Corporation made on ___________, _____ (the
      “Date of Grant”), the Corporation, subject to the terms of the Plan and of this
      Agreement, confirms that the Recipient has been irrevocably granted on the
      Date
      of Grant, as a matter of separate inducement and agreement, and in addition
      to
      and not in lieu of salary or other compensation for services, a Stock Option
      (the “Option”) exercisable to purchase an aggregate of ______ shares of Common
      Stock on the terms and conditions herein set forth, subject to adjustment as
      provided in Paragraph 8 hereof.

    

    2. Option
      Price.
      The
      Option Price of shares of Common Stock covered by the Option will be $_____
      per
      share (the “Option Price”) subject to adjustment as provided in Paragraph 8
      hereof. 

    

    3. Vesting
      and Exercise of Option.
      (a)
      Except as otherwise provided herein or in Section 8 of the Plan, the Option
      [shall
      vest and become exercisable as follows: (insert vesting schedule), provided,
      however, that no option shall vest or become exercisable unless the Recipient
      is
      an employee of the Corporation on such vesting date/or may be exercised in
      whole
      or in part at any time during the term of the Option.]
      (b) The
      Option may not be exercised at any one time as to fewer than 100 shares (or
      such
      number of shares as to which the Option is then exercisable if such number
      of
      shares is less than 100). (c) The Option may be exercised by written notice
      to
      the Secretary of the Corporation accompanied by payment in full of the Option
      Price as provided in Section 8 of the Plan. 

     

    4. Term
      of Option.
      The
      term of the Option will be through __________, ____, subject to earlier
      termination or cancellation as provided in this Agreement. The holder of the
      Option will not have any rights to dividends or any other rights of a
      shareholder with respect to any shares of Common Stock subject to the Option
      until such shares shall have been issued (as evidenced by the appropriate
      transfer agent of the Corporation) upon purchase of such shares through exercise
      of the Option. 

    

    5. Transferability
      Restriction.
      The
      Option may not be assigned, transferred or otherwise disposed of, or pledged
      or
      hypothecated in any way (whether by operation of law or otherwise) except in
      strict compliance with Section 8 of the Plan. Any assignment, transfer, pledge,
      hypothecation or other disposition of the Option or any attempt to make any
      levy
      of execution, attachment or other process will cause the Option to terminate
      immediately upon the happening of any such event; provided, however, that any
      such termination of the Option under the provisions of this Paragraph 5 will
      not
      prejudice any rights or remedies which the Corporation may have under this
      Agreement or otherwise.

    
      
         

        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    6. Exercise
      Upon Termination.
      The
      Recipient’s rights to exercise this Option upon termination of employment or
      cessation of service as an officer, director or consultant shall be as set
      forth
      in Section 8(f) of the Plan.

    

    7. Death,
      Disability or Retirement of Recipient.
      The
      exercisability of this Option upon the death, Disability or retirement of the
      Recipient shall be as set forth in Section 8(g) of the Plan. 

    

    8. Adjustments.
      The
      Option shall be subject to adjustment upon the occurrence of certain events
      as
      set forth in Section 8(i) of the Plan. 

    

    9. No
      Registration Obligation.
      The
      Recipient understands that the Option is not registered under the 1933 Act
      and,
      unless by separate written agreement, the Corporation has no obligation to
      so
      register the Option or any of the shares of Common Stock subject to and issuable
      upon the exercise of the Option, although it may from time to time register
      under the 1933 Act the shares issuable upon exercise of Options granted pursuant
      to the Plan. The Recipient represents that the Option is being acquired for
      the
      Recipient’s own account and that unless registered by the Corporation, the
      shares of Common Stock issued on exercise of the Option will be acquired by
      the
      Recipient for investment. The Recipient understands that the Option is, and
      the
      underlying securities may be, issued to the Recipient in reliance upon
      exemptions from the 1933 Act, and acknowledges and agrees that all certificates
      for the shares issued upon exercise of the Option may bear the following legend
      unless such shares are registered under the 1933 Act prior to their issuance:
      

    

    The
      shares represented by this Certificate have not been registered under the
      Securities Act of 1933 (the “1933 Act”), and are “restricted securities” as that
      term is defined in Rule 144 under the 1933 Act. The shares may not be offered
      for sale, sold or otherwise transferred except pursuant to an effective
      registration statement under the 1933 Act or pursuant to an exemption from
      registration under the 1933 Act, the availability of which is to be established
      to the satisfaction of the Company.

    

    The
      Recipient further understands and agrees that the Option may be exercised only
      if at the time of such exercise the underlying shares are registered and/or
      the
      Recipient and the Corporation are able to establish the existence of an
      exemption from registra-tion under the 1933 Act and applicable state or other
      laws. 

    

    10. Notices.
      Each
      notice relating to this Agreement will be in writing and delivered in person
      or
      by certified mail to the proper address. Notices to the Corporation shall be
      addressed to the Corporation, attention: President, 789 West Pender, Suite
      1010,
      Vancouver, B.C., V6C-1H2, or at such other address as may constitute the
      Corporation’s principal place of business at the time, with a copy to: Theresa
      M. Mehringer, Esq., Burns, Figa & Will, P.C., 6400 S. Fiddlers Green Circle,
      Suite 1000, Greenwood Village, CO 80111. Notices to the Recipient or other
      person or persons then entitled to exercise the Option shall be addressed to
      the
      Recipient or such other person or persons at the Recipient’s address below
      specified. Anyone to whom a notice may be given under this Agreement may
      designate a new address by notice to that effect given pursuant to this
      Paragraph 10. 

    

    11. Approval
      of Counsel.
      The
      exercise of the Option and the issuance and delivery of shares of Common Stock
      pursuant thereto shall be subject to approval by the Corporation’s counsel of
      all legal matters in connection therewith, including compliance with the
      requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended,
      applicable state and other securities laws, the rules and regulations
      thereunder, and the requirements of any national securities exchange(s) upon
      which the Common Stock then may be listed. 

    

    12. Benefits
      of Agreement.
      This
      Agreement will inure to the benefit of and be binding upon each successor and
      assignee of the Corporation. All obligations imposed upon the Recipient and
      all
      rights granted to the Corporation under this Agreement will be binding upon
      the
      Recipient’s heirs, legal representatives and successors. 

    

    13. Effect
      of Governmental and Other Regulations.
      The
      exercise of the Option and the Corporation’s obligation to sell and deliver
      shares upon the exercise of the Option are subject to all applicable federal
      and
      state laws, rules and regulations, and to such approvals by any regulatory
      or
      governmental agency which may, in the opinion of counsel for the Corporation,
      be
      required.

    

    14. Plan
      Governs.
      In the
      event that any provision in this Agreement conflicts with a provision in the
      Plan, the provision of the Plan shall govern.

    

    
      
         

        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    Executed
      in the name and on behalf of the Corporation by one of its duly authorized
      officers and by the Recipient all as of the date first above
      written.

    

    VALCENT
      PRODUCTS, INC.

    

    

    Date
      ______________, _______ By:

     M.
      Glen
      Kertz, President

    

    The
      undersigned Recipient has read and understands the terms of this Option
      Agreement and the attached Plan and hereby agrees to comply
      therewith.

     

    Date
      ______________, _______ 

    Signature
      of Recipient

    

    

    Tax
      ID
      Number: 

    

    Address: 

    

     

    

    

    
      
        
           

        

        
        

      

      
        A-3

        
          

        

      

      
        
        

        
        

      

    

    Exhibit
      B

    

    SUBSCRIPTION
      AGREEMENT

    

    THE
      SECURITIES BEING ACQUIRED BY THE UNDERSIGNED HAVE NOT BEEN REGISTERED UNDER
      THE
      U.S. SECURITIES ACT OF 1933 OR ANY OTHER LAWS AND ARE OFFERED UNDER EXEMPTIONS
      FROM THE REGISTRATION PROVISIONS OF SUCH LAWS. THESE SECURITIES CANNOT BE SOLD,
      TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE
      RESTRICTIONS ON TRANSFER CONTAINED IN THIS STOCK SUBSCRIPTION AGREEMENT AND
      APPLICABLE SECURITIES LAWS.

    

    This
      Subscription Agreement is entered for the purpose of the undersigned acquiring
      _____________ shares of common stock, no par value (the “Securities”) of Valcent
      Products, Inc., an Alberta corporation (the “Corporation”) from the Corporation
      as a Bonus or pursuant to exercise of an Option granted pursuant to the
      Corporation's 2006 Stock Option Plan (the “Plan”). All capitalized terms not
      otherwise defined herein shall be as defined in the Plan.

    

    It
      is
      understood that no grant of any Bonus or exercise of any Option at a time when
      no registration statement relating thereto is effective under the U.S.
      Securities Act of 1933, as amended (the “1933 Act”) can be completed until the
      undersigned executes this Subscription Agreement and delivers it to the
      Corporation, and that such grant or exercise is effective only in accordance
      with the terms of the Plan and this Subscription Agreement.

    

    In
      connection with the undersigned’s acquisition of the Securities, the undersigned
      represents and warrants to the Corporation as follows:

    

    1. The
      undersigned has been provided with, and has reviewed the Plan, and such other
      information as the undersigned may have requested of the Corporation regarding
      its business, operations, management, and financial condition (all of which
      is
      referred to herein as the “Available Information”).

    

    2. The
      Corporation has given the undersigned the opportunity to ask questions of and
      to
      receive answers from persons acting on the Corporation’s behalf concerning the
      terms and conditions of this transaction and the opportunity to obtain any
      additional information regarding the Corporation, its business and financial
      condition or to verify the accuracy of the Available Information which the
      Corporation possesses or can acquire without unreasonable effort or
      expense.

    

    3. The
      Securities are being acquired by the undersigned for the undersigned’s own
      account and not on behalf of any other person or entity.

    

    
      
        
          

        

        
        

      

      
        B-1

        
          

        

      

      
        
        

        
        

      

    

    4. The
      undersigned understands that the Securities being acquired hereby have not
      been
      registered under the 1933 Act or any state or foreign securities laws, and
      are,
      and unless registered will continue to be, restricted securities within the
      meaning of Rule 144 of the General Rules and Regulations under the 1933 Act
      and
      other statutes, and the undersigned consents to the placement of appropriate
      restrictive legends on any certificates evidencing the Securities and any
      certificates issued in replacement or exchange therefor and acknowledges that
      the Corporation will cause its stock transfer records to note such
      restrictions.

    

    5. By
      the
      undersigned’s execution below, it is acknowledged and understood that the
      Corporation is relying upon the accuracy and completeness hereof in complying
      with certain obligations under applicable securities laws.

    

    6. This
      Agreement binds and inures to the benefit of the representatives, successors
      and
      permitted assigns of the respective parties hereto.

    

    7. The
      undersigned acknowledges that the grant of any Bonus or Option and the issuance
      and delivery of shares of Common Stock pursuant thereto shall be subject to
      prior approval by the Corporation’s counsel of all legal matters in connection
      therewith, including compliance with the requirements of the 1933 Act and other
      applicable securities laws, the rules and regulations thereunder, and the
      requirements of any national securities exchange(s) upon which the Common Stock
      then may be listed.

    

    8. The
      undersigned acknowledges and agrees that the Corporation has withheld
      ___________ shares for the payment of taxes as a result of the grant of the
      Bonus or the exercise of an Option. 

    

    9. The
      Plan
      is incorporated herein by reference. In the event that any provision in this
      Agreement conflicts with ANY provision in the Plan, the provisions of the Plan
      shall govern.      

    

    Date:
      ______________, ______ 

    Signature
      of Recipient

    

    Tax
      ID
      Number:

    

    Address:

    

    B-2AGREEMENT FOR DIRECT RESPONSE SERVICES

    
      

    

    Exhibit
      10.22
      
        

      

    

    

    
      
        	 	
                 InPulse
                  Response Group, Incorporated-Valcent Products Inc. 

                 January
                  12, 2007

                Page
                  1
                  of 6 

              

      

    

     

    AGREEMENT
      FOR DIRECT RESPONSE SERVICES

    

    THIS
      Agreement (“Agreement”) is made as of January
      12, 2007,
      by and
      between InPulse Response Group, Inc., an Arizona corporation (“InPulse”), and
      Valcent Products Inc. located at 1057 Doniphan Park Circle, Suite H, El Paso,
      Texas 9922 the entity whose signature is below (“Client”), for the furnishing of
      Services related to Client’s direct response marketing campaigns.

    

    
      	 	
              1.

            	
              InPulse
                Responsibilities
                --
                InPulse will provide live operators and recorded telephone answering
                services to third party consumers who are identified by Client through
                Client’s direct response marketing campaign as set forth in this Agreement
                and in the manner and method identified in separate addendums to
                this
                Agreement (the ”Services”). Each such addendum will outline the pricing
                associated with Client’s campaign and may contain additional Services
                detail. InPulse’s responsibilities in providing Services may
                include:

            

    

    

    
      	 	
              A.

            	
              Inbound
                calls

            

    

    Receive
      telephone calls from consumers generated by Client’s advertising and promote and
      sell the Client’s product and services by using scripts pre-approved by Client.
      InPulse shall not cross sell or up sell any products unless first approved
      by
      Client. InPulse shall receive inbound calls twenty-four (24) hours a day, seven
      (7) days a week, fifty-two (52) weeks a year.

    
      	 	
              B.

            	
              Outbound
                calls 

            

    

    Generate
      outbound telephone calls to Client’s list(s) to promote and sell approved
      products and/or services by using scripts pre-approved by Client. InPulse shall
      not cross sell or up sell any products unless first approved by Client.

    
      	 	
              C.

            	
              Scripts

            

    

    Implement,
      in conjunction with and subject to the approval of Client, sales scripts for
      InPulse sales representatives to use in the selling of the product and
      authorized cross sells and up sells. All sales scripts will be submitted to
      Client for review for accuracy and completeness and will not be used unless
      Client has approved them in writing. 

    
      	 	
              D.

            	
              Contact
                Person

            

    

    InPulse
      shall designate one (1) primary contact to the Client account who will be
      available during regular business hours (9:00 a.m. to 5:00 p.m. Pacific time)
      and InPulse will assign an alternate contact for the Client account when the
      primary contact is not present and readily accessible.

    
      	 	
              E.

            	
              Monitoring

            

    

    InPulse
      will monitor its telephone operators’ performance on a regular basis for quality
      assurance purposes. InPulse will record and archive all sales verifications
      and
      shall keep all such recordings for a minimum of two years from the inception
      date of each recording. For purposes of this provision, the sales verification
      portion of the call shall include disclosure of all material terms of the
      product offer and the customer’s acceptance of the offer.

    
      	 	
              F.

            	
              Data
                Transmission

            

    

    InPulse
      agrees to transmit all completed orders for Client’s campaign to Client (or
      Client’s designee) in the format reasonably requested by Client. This format
      shall be mutually agreed upon prior to beginning a campaign and will require
      Client approval before campaign begins. InPulse will not be responsible or
      liable for any costs relating to any checking or credit card accounts, or any
      related fees and taxes. Client shall be responsible for establishing policies
      and rules for the collection and payment of shipping charges, handling charges,
      insurance charges, and all state and local sales/transaction privilege taxes
      and
      any other applicable taxes. Client shall be responsible for the reporting and
      payment of all state and local sales/transaction privilege taxes and any other
      applicable taxes.

    

    
      	 	
              2.

            	
              Client
                Responsibilities
                -
                Client will assist and cooperate to the best of its ability with
                InPulse
                to facilitate the provision of such Services and Client agrees to
                provide
                all materials reasonably required by InPulse to perform Services,
                including as applicable, but not limited to: hiring profiles; scripts;
                program content and materials; Client or third party databases; forecasts;
                current process performance statistics; Client or third party software,
                hardware, systems, routing and network addresses and configurations;
                and
                key contacts for problem escalation (collectively the “Client Materials”).
                Client agrees to provide this assistance and cooperation within a
                24-hour
                period for requests from InPulse. If Client’s products, programs,
                materials, goods and property are objectionable, misleading,
                fraudulent, prohibited by law or sexually explicit as determined
                by
                InPulse, InPulse may, upon notice to Client, immediately terminate
                its
                rendering of further Services under this Agreement without liability
                and
                Client shall be responsible for payments for those Services already
                provided as outlined within this Agreement.
                

            

    

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

      
        
          	 	
                   InPulse
                    Response Group, Incorporated-Valcent Products Inc. 

                   January
                    12, 2007

                  Page
                    2
                    of 6 

                

        

      

    

    

    

    
      	 	
              3.

            	
              Confidentiality
                - Both
                parties recognize and mutually agree that all information regarding
                the
                other party’s proprietary technologies, services, pricing and information
                are confidential and proprietary, and as such, all confidential
                information may not be disclosed or used for any purpose whatsoever
                except
                to perform under this Agreement. All consumer information captured
                over
                the telephone (including, but not limited to, names, addresses, telephone
                numbers, ANI, credit card numbers) is the confidential information
                of
                Client. InPulse’s confidential information shall include, but not be
                limited to the trade secrets, business affairs, computer systems,
                software, analytical procedures, techniques, phone numbers, skills,
                ideas,
                models, and research of InPulse, its Affiliates or their employees,
                suppliers or agents and all technical, financial, business and analytical
                marketing information derived from the performance of the Services.
                Each
                party shall exclusively own its confidential information and no rights
                to
                such information are transferred by this Agreement. The confidentiality
                obligations of is paragraph does not apply to (i) information known
                or
                which has become public through no fault of either party, including
                but
                not limited to, information either party already had in its possession
                prior to the date of disclosure of such information, (ii) information
                either party obtains from a third party on a non-confidential basis;
                or
                (iii) any information that InPulse or Client is required by law rule
                or
                regulation to disclose(and then only after providing prior notice
                to the
                discloser). 

            

    

    

    
      	 	
              4.

            	
              No
                Hire-
                Client, or any successor in interest to Client or any company, person
                or
                entity under control of Client, shall not employ any InPulse employee
                in
                any capacity, including subcontractor status, unless authorized in
                writing
                by InPulse. Client agrees that such action without prior written
                authorization from InPulse would result in significant damage to
                InPulse,
                and Client agrees to pay one times the annual compensation of the
                employee
                and any costs associated with replacing that employee as liquidated
                damages for its breach of this
                provision.

            

    

    

    
      	 	
              5.

            	
              Telephone
                Number Utilization
                -
                In the event that Client utilizes inbound telesales Services InPulse,
                will
                provide to Client inbound telephone coverage via exclusive toll-free
                long
                distance telephone numbers and Client shall direct customers to call
                specific telephone numbers as assigned to Client by InPulse. Client
                shall
                use these telephone numbers only during the term of the Agreement
                and such
                telephone numbers are and will remain the exclusive property of InPulse.
                InPulse will be responsible for completing the programming of such
                telephone numbers as agreed between the Client and InPulse.
                Upon
                termination of this Agreement, InPulse will terminate the Client’s right
                to utilize such telephone numbers. In the event that this Agreement
                is
                terminated per Paragraph 9 InPulse may direct sales consultants to
                inform
                callers on a particular telephone number that InPulse is not taking
                calls
                for such program, service or product. In such event as InPulse continues
                to take such calls for Client, Client shall pay InPulse a per-second
                charge for InPulse operators handling such calls, a charge for
                informational announcement time and commission per sale as defined
                in this
                or any other agreement between the parties. InPulse will not be liable
                to
                Client or any other person for direct or indirect claim, loss, injury,
                damage or cost sustained in connection with the termination of the
                Client’s right to utilize an telephone
                number.

            

    

    

    In
      the
      event Client utilizes outbound teleservices, InPulse will utilize its own
      telecommunications services to enable the calling campaign to proceed on
      Client’s behalf.

    

    
      	 	
              6.

            	
              Payment
                for Services -
                InPulse will invoice Client for Services on a weekly basis. Payment
                is due
                14 days from invoice date. Any amount not paid within 14 days old
                shall be
                subject to a five percent (5%) late fee. Furthermore, any amount
                that is
                not paid within fourteen (14) days will accrue interest at 1.5% per
                month,
                or the maximum allowable by law. Payment of InPulse’s invoices is neither
                dependent upon Client’s collection from customers nor dependent on
                Client’s customer returns. It is the responsibility of Client to charge
                and collect upon customer’s credit cards or other payment options, and to
                facilitate and fulfill customer orders promptly. Based on the information
                provided by Client and InPulse’s account analysis, InPulse will establish
                a credit limit for Client. InPulse may
                require a security deposit prior to initiating Services. If Client
                exceeds
                the established credit limit, the amount above the credit limit is
                immediately due and payable. If Client is unable to resolve any credit
                issue to the satisfaction of InPulse, InPulse may
                immediately terminate Services for Client and terminate Client’s right to
                utilize any telephone number belonging to InPulse. At InPulse’s option,
                InPulse may
                continue to take orders but hold them from fulfillment until such
                time as
                the credit condition is removed by mutual agreement. If there remain
                unencumbered funds following completion of Client’s projects and Client
                has paid all outstanding invoices, InPulse will refund any balance
                of the
                security deposit within fourteen (14) days of request by
                Client.

               

              Client
                Shall be responsible for, and shall
                promptly pay, all sales taxes, service taxes, use taxes, fees or
                charges
                levied or assessed by any governmental authority or agency thereof
                as a
                result of this Agreement or the Services to be provided to Client
                thereunder except taxes levied or assessed on the net income or profit
                of
                InPulse.

            

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    
      

      
        
          	 	
                   InPulse
                    Response Group, Incorporated-Valcent Products Inc. 

                   January
                    12, 2007

                  Page 3
                    of 6 

                

        

      

       

    

    

    
      	 	
              7.

            	
              Program
                Pricing - InPulse
                shall provide to Client the specific charges and fees for each requested
                Service as defined in attached addendums. InPulse reserves the right
                to
                modify these charges on the basis of a requested change in Services
                by
                Client.

            

    

    

    
      	 	
              8.

            	
              Duration
                and Termination - This
                Agreement will be in effect for a period of one (1) year from the
                date of
                this Agreement, with an automatic renewal on an annual basis. Both
                parties
                reserve the right to terminate this Agreement by providing thirty
                (30)
                days written notice to the other party, provided however, the terms
                and
                conditions of this Agreement shall remain in full force and effect
                regarding any unfulfilled obligations of either
                party.

            

    

    

    
      	 	
              9.

            	
              Representations
                and Warranties - 

            

    

    

    
      	 	
              A.

            	
              Each
                party represents and warrants to the other that such party’s execution and
                performance of this Agreement will not violate any provision of law,
                rule,
                regulation, order, permit or license to which such party is subject
                or
                pursuant to which such party conducts its business, and that each
                party
                will comply with all laws, rules, regulations, orders, permits or
                licenses
                pursuant to which such party conducts its business, including without
                limitation compliance with all consumer protection laws applicable
                to any
                product or service offered by such
                party.

            

    

    

    
      	 	
              B.

            	
              Client
                represents and warrants: (i) that the Client Materials, all
                representations to be made by InPulse to callers as a part of Client's
                programs, and, if applicable, the content and nature of all promotions
                and
                advertising to induce calls to Client's programs will be in compliance
                with laws, rules, regulations, orders, permits, agreements, or licenses;
                and (ii) Client is solely responsible for the content and rights
                to use
                the Client Materials and InPulse’s use of the Client Materials shall not
                violate the rights of any third party or any law, rule or regulation.
                Client specifically acknowledges and agrees that InPulse has not
                and is
                not expected to provide Client with any analysis, interpretation
                or advice
                regarding the compliance of any aspect of Client's Materials or program
                with any laws, regulations guidelines or third party
                rights.

            

    

    

    
      	 	
              10.

            	
              Assignment
                --
                InPulse may delegate or assign this Agreement, any portion thereof,
                or any
                duties under this Agreement at its discretion, at any time. Any such
                delegation or assignment shall provide that the assignees are subject
                to
                all the terms and conditions set forth in this
                Agreement.

            

    

    

    
      	 	
              11.

            	
              Inability
                to Perform - In
                the event that, due to circumstances beyond InPulse’s control, (including
                but not limited to labor disturbances, strikes, lockouts, failure
                of a
                carrier to provide lines of service, Government regulations or
                interference, accidents, fires, explosions, acts of terrorism or
                any
                similar interruption beyond InPulse’s reasonable control) InPulse is
                unable to provide Services, InPulse’s obligations under this Agreement
                will be suspended until such time as Services can be restored. However,
                that inability will not absolve Client of its responsibilities under
                this
                Agreement, including payment of any outstanding invoices as due.
                In the
                event of any interruption of Services, InPulse shall attempt to restore
                such Services as soon as possible. InPulse will
                work with Client to ensure there are adequate back up and contingency
                plans to reroute projects to overflow telemarketing companies in
                order to
                minimize the possibility of Client losses and to maintain the program
                for
                the Client in the event of such emergencies. Client will be responsible
                to
                arrange for such overflow telemarketing companies, should Client
                elect to
                provide overflow facilities and disaster recovery in the event
                InPulse is
                unable to perform. This contingency overflow and disaster recovery
                will be
                arranged at the sole expense of the Client. Additionally, Alternative
                Destination Routing features or any advanced telephone network routing
                features requested by Client will be implemented and billed to Client
                at
                InPulse’s cost. If InPulse’s obligations are suspended pursuant to this
                section, InPulse will
                not be liable to the Client or any other person or entity for any
                claims
                or causes of action in any way arising out of or related to such
                suspension.

            

    

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    
      

      
        
          	 	
                   InPulse
                    Response Group, Incorporated-Valcent Products Inc. 

                   January
                    12, 2007

                  Page 4
                    of 6 

                

        

      

      
        

        
          	 	
                  12.

                	
                  Limitation
                    of Liability - EXCEPT
                    AS EXPRESSLY PROVIDED HEREIN, INPULSE MAKES NO EXPRESS OR IMPLIED
                    WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
                    FITNESS
                    FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. PROVIDER EXPRESSLY
                    DENIES
                    ANY REPRESENTATION
                    OR WARRANTY ABOUT THE ACCURACY OR CONDITION OF DATA OR THAT THE
                    SERVICES
                    OR RELATED SYSTEMS WILL OPERATE UNINTERRUPTED OR ERROR-FREE.
                    CLIENT’S SOLE
                    AND EXCLUSIVE REMEDY FOR ANY BREACH OF THIS AGREEMENT BY INPULSE
                    SHALL BE
                    THE RIGHT TO TERMINATE THE AGREEMENT. UNDER NO CIRCUMSTANCES
                    SHALL INPULSE
                    BE LIABLE TO CLIENT FOR ANY INDIRECT, EXEMPLARY, DIRECT, SPECIAL,
                    PUNITIVE, CONSEQUENTIAL OR INCIDENTAL DAMAGES OR LOSS OF PROFITS
                    GOODWILL
                    OR DATA, OR COST OF COVER EVEN IF IT HAS BEEN ADVISED OF THE
                    POSSIBILITY
                    OF SUCH. InPulse and its suppliers do not warrant the performance
                    or
                    results Client may obtain by using InPulse’s Services. Results may vary
                    from time to time and neither payment for Services nor the
                    responsibilities of Client will be relieved by any changes in
                    the results
                    of Clients direct marketing programs. Any and all actions or
                    claims
                    brought against InPulse,
                    its
                    suppliers or successors for breach of Agreement must be commenced
                    within
                    six (6) months after Client becomes aware of such cause of action
                    or
                    claim, or such cause of action or claim shall be forever barred.
                    In the
                    event of differences between the terms and conditions of this
                    Agreement
                    and any other agreement between the parties, the terms and conditions
                    of
                    this Agreement shall
                    control.

                

        

      

    

    
      	 	
              13.

            	
              Indemnification
                -
                

            

    

    

    
      	 	
              A.

            	
              Client
                shall indemnify, defend and hold InPulse and its Affiliates and their
                officers, directors and employees harmless from any and all third-party
                claims, actions, suits, proceedings, costs, expenses, damages (including
                punitive, treble and enhanced damages) and liabilities, including
                reasonable attorneys’ fees arising out of, connected with or resulting
                from: (i) a breach by Client of any term of this Agreement; (ii)
                the
                Client Materials; or (iii) a claim by any customer of Client or any
                party
                called on Client’s or its customer’s behalf relating to any defect in any
                product or service offered by Client or any of its customers. InPulse
                shall indemnify, defend and hold Client and its officers, directors
                and
                employees harmless from any and all third-party claims, actions,
                suits,
                proceedings, costs, expenses, damages (including punitive, treble
                and
                enhanced damages) and liabilities, including reasonable attorneys’ fees
                which arise out of or result from a breach by InPulse of any term
                of this
                Agreement.

            

    

    

    
      	 	
              B.

            	
              The
                party claiming indemnification shall: (i) promptly notify the indemnifying
                party of any claim in respect of which the indemnity may apply; (ii)
                relinquish control of the defense of the claim to the indemnifying
                party;
                and (iii) provide the indemnifying party with all assistance reasonably
                requested in defense of the claim. The indemnifying party shall be
                entitled to settle any claim without the written consent of the
                indemnified party so long as such settlement only involves the payment
                of
                money by the indemnifying party and in no way affects any rights
                of the
                indemnified party.

            

    

     

    

    
      	 	
              14.

            	
              Entire
                Agreement - This
                Agreement constitutes the entire understanding between InPulse and
                Client and supersedes all negotiations, representations, prior discussions
                and preliminary agreements between the parties relating to the subject
                matter hereof. Any modification or addenda must be in writing and
                signed
                by both parties.

            

    

    

    
      	 	
              15.

            	
              Controlling
                Law
                -
                The validity, interpretation, and performance of this Agreement,
                will be
                controlled and construed under the laws of the State of Arizona.
                Client
                agrees to bring any litigation regarding this Agreement exclusively
                in the
                Maricopa County, Arizona Superior Court or the United States District
                Court for the District of Arizona, Phoenix Division. 

            

    

    

    
      	 	
              16.

            	
              Further
                Action - InPulse
                and Client shall execute and deliver all documents, provide all
                information and take or forebear from all such action as may be necessary
                or appropriate to achieve the purposes of this
                Agreement.

            

    

    

    
      	 	
              17.

            	
              Severability
                - In
                the event that any provision contained herein is held to be invalid,
                illegal or unenforceable by any court, such provision will be deemed
                severable from the remainder of this Agreement, and shall not affect
                the
                remaining provisions of this
                Agreement.

            

    

    

    
      	 	
              18.

            	
              Waiver
                - The
                failure of either InPulse or Client to take affirmative action, with
                respect to any conduct of the other which is in violation of this
                Agreement, shall not be construed as a waiver of the violation or
                breach,
                nor shall it be construed or deemed to be a waiver of any rights
                of the
                parties.

            

    

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    
      

      
        
          	 	
                   InPulse
                    Response Group, Incorporated-Valcent Products Inc. 

                   January
                    12, 2007

                  Page 5
                    of 6 

                

        

      

       

    
      	
            	19.	
              Publicity
                - Any
                publicity concerning the relationship established by this Agreement
                shall
                be released only upon mutual consent of both InPulse and
                Client. InPulse and
                Client agree that InPulse and/or any of its authorized representatives
                may
                use Client’s name as a reference, or as part of InPulse’s Client list, in
                any written or oral proposal which InPulse may make to prospective
                Clients, provided Client is notified prior to disclosure and that
                such use
                of this information shall not constitute a disclosure of confidential
                information.

            

    

    

    
      	
            	20.	
              Counterparts;
                Facsimiles
                -
                This Agreement may be executed in one or more counterparts, each
                of which
                shall be deemed to be an original, and all of which together shall
                constitute one and the same Agreement. This Agreement may be executed
                and
                delivered by electronic facsimile transmission with the same force
                and
                effect as if it were executed and delivered by the parties simultaneously
                in the presence of one another, and signatures on a facsimile copy
                hereof
                shall be deemed authorized original signatures. 

            

    

                                

         

     

    
      	
               InPulse Response Group, Incorporated   

              8970 E Raintree Dr. Suite #200 

              Scottsdale, AZ 85260

            	 	
              Valcent Products, Inc.

              1057 Doniphan Park Circle, Suite H

              El Paso, Texas 79922

            
	
               

              By:
                /s/ Steve Pittendrigh

            	 	
               

              By:

            
	 	 	 
	
              Steve
                Pittendrigh

              CEO

            	
               

            	 
	
               January
                12, 2007

            	 	
               January
                12, 2007

            
	
              Date

            	 	
              Date

            

    

    

    

    

    

    

    

    

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    
      

      
        
          	 	
                   InPulse
                    Response Group, Incorporated-Valcent Products Inc. 

                   January
                    12, 2007

                  Page
                    1
                    of 6 

                

        

      

       

    Exhibit
      A: Inbound Pricing Addendum

    Campaign
      Name: Nova Skincare System

    Client
      Name: Valcent Products, Inc.

    

    
      	
               Administrative
                Fees:

            	
               

            
	
              Program
                Set-Up Fee:

            	
              $1,500
                

            
	 	
               

            
	
              Monthly
                Service Minimum:

            	
              $3,000
                waived for 90 days 

            
	
              Any
                difference between actual Monthly billings (using media calendar)
                and the
                minimum will be billed to Client.

            	
               

            
	
              Security
                Deposit:

            	
              If
                required, after InPulse Credit Review

            
	
              If
                required, must be paid before calls commence.

            	
               

            
	
              *Telemarketing
                Fees:

            	
               

            
	
              Commission
                per Order 

            	
              Commission
                incentive will be 3% of the net sale, or $4.00 per basic offer, whichever
                is greater. Also, a $.50 commission per continuity sale will be assessed,
                if applicable.

            
	
              Talk
                Time Charge 

            	
              $0.0133
                per second 

            
	
              Informational
                Announcement Time

            	
              $0.004
                per second

            
	
              Training
                Fees:

            	
               

            
	
              Specialized
                Training after Program Launch

            	
              $15.00
                per telesales consultant, per hour

            
	
              Subsequent
                to initial agreed upon training

            	
               

            
	
              Reporting/Data
                Transmission Fees:

            	
               

            
	
              Customized
                Reporting

            	
              $150
                per customized programming hour

            
	
              As
                requested by Client and agreed to in writing

            	
               

            
	 	
               

            
	
              Additional
                services are available upon
                request

            

    

    

    *
      Any material change to the original offer structure (e.g. additional products,
      change in product pricing) may require a contract addendum defining additional
      and/or different Telemarketing Fees.

    

         

     

    
      	 InPulse
              Response Group Inc.	 	 Valcent
              Products Inc.
	
               

              By:
                /s/ Steve Pittendrigh

            	 	
               

              By:

            
	
              Steve
                Pittendrigh

              CEO

            	 	 
	
               January
                12, 2007

            	 	
               January
                12, 2007

            
	
              Date

            	 	
              Date

            

    

    
6

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