Document:

Exhibit
10.5

 

VITAL LIVING, INC.

 

Strategic Advisor
Agreement

 

 

This
Corporate Strategic Advisor Agreement (SAA) (“Agreement”) dated
October 14, 2003, (the “Effective Date”) is made by and between
Vital Living, Inc., a Nevada corporation, whose address is 5080 N. 40th
Street, #105, Phoenix, Arizona, 85018 (“Company” or “Vital Living”),
and (ii) Dr. Maynard Howe (“Consultant”), an individual whose address is
205 So. Helix, T-72, Solana Beach, California 92075

 

1.                                      INTRODUCTION

 

Vital Living has
established a Corporate Strategic Advisory Board,  (“CSAB”) to provide Vital Living the following services and
advice in connection with its strategy and plans for the development and
commercialization of its products and services (“Services”), including, but not
limited to:

 

Developing, manufacturing
and testing of nutraceutical formulations that are based on the best available
scientific research, shown to be safe and effective in appropriately designed
and controlled clinical trials, and proprietary to the Company ;

 

Assisting the Company in
the design and development of compliance and lifestyle programs intended to
enhance patient compliance with the Company’s nutraceuticals;

 

Advising the Company on
the needs of potential clients, partners, and other users, including practicing
physicians, academic researchers, other health professional, and patients, and
the design of products, services and offerings to address those needs, but not
helping to directly market to these individuals;

 

Working with other
thought leaders and health professionals to facilitate projects of mutual
benefit to the Company and said individuals: and,

 

Participating
in scientific exchange with thought leaders and other health professionals and
academic researchers regarding potential clinical benefits of Vital Living
products.

 

Consultant desires to be
a member of the CSAB and perform such Services, and Company desires to have
Consultant become a member of the CSAB and perform such Services.

 

2.                                      CONSULTING
SERVICES

 

(A)  Services.  Consultant agrees to serve as a member of
the CSAB and to endeavor to attend and participate in all CSAB meetings. Vital Living currently intends to convene one
(1) in-person meeting annually and approximately  (3) teleconference meetings of the CSAB per
year.

 

The Company retains
Consultant to provide the following consulting services (the “Consulting  Services.”) to the
Company:

 

(i)                                     Assist the Company in formulating, developing and
executing an ongoing strategic business strategy.

 

 

(ii)                                  Assist the Company effecting the clinical
evaluation of its products.

 

(iii)                               Assist in developing a brand identity and
marketing strategy for Company products, including the identifying, developing
and assessing of distribution channels, including mainstream physicians, and
formulating a Company identity and message to be communicated to investors,
physicians, researchers, patients, and other constituencies.

 

(iv)                              Advise the Company with respect to high-level
legal and regulatory issues, including strategies for the protection of Company
intellectual property.

 

(v)                                 Facilitate introductions to leading physicians
and other prominent healthcare industry professionals, including the
recruiting of highly qualified individuals to serve as members of the
Scientific Advisory Board.

 

(vi)                              Assist in the design, development and
implementation of a lifestyle and compliance program.

 

(vii)                           Assist the Company in identifying and assessing
opportunities for capital formation.

 

(viii)                        Appear at
and participate in medical conferences, meetings, conference calls, or other
corporate promotional functions as mutually agreed upon by both parties.

 

(ix)                                Perform
such additional services as the Company and Consultant may agree upon.

 

(b)  In
performing the duties required under this Agreement, Consultant, at all times
shall exercise his professional independent judgment, based on his training,
experience and expertise.  Consultant
shall at all times comply with the ethical rules and opinions of the
professional organizations of which he is a member.  If any conflict arises between Consultant’s duties hereunder and
Consultant’s ethical or other contractual obligations, Consultant shall
immediately bring the matter to the attention of the chief executive officer,
president or chairman of the board of directors of the Company.

 

(c)  Consultant
shall devote such time as is reasonably required to perform the Consulting
Services as mutually agreed upon by both parties.

 

(d)  Consultant
shall provide the Consulting Services at such locations as may be necessary or
desirable to perform such Consulting Services effectively as mutually agreed
upon by both parties.

 

(e)  Consultant
and Company presently believe that effective performance will require
Consultant to visit the Company’s offices at least once per calendar year and
be available for telconferences three times per year during the Term.

 

3.                                      SERVICES
COMPENSATION AND EXPENSE REIMBURSEMENT

 

Compensation
and Expense Reimbursement. 
As sole compensation for the performance of the Services, Company will
compensate Consultant as follows.

 

(i)                                     The
Company will reimburse Consultant for reasonable out-of-pocket expenses
incurred in the performance of the Services, including Economy Class travel to
CSAB Meetings; provided, however, that (a) all such out-of pocket expenses over
an aggregate of $500 during any calendar

 

 

month shall have been previously approved in writing by an officer of
the Company; and (b) all such out-of-pocket expenses are supported by
reasonable documentation;

 

(ii)                                  GRANT
OF OPTIONS.  The Company hereby
grants to Optionee, a Non-Qualified Option (“Options”)
to purchase all or any part of 20,000 Shares, upon and subject to the terms and
conditions of the Plan, which is incorporated in full herein by this reference,
and upon the other terms and conditions set forth herein at an exercise price
equal to the market price on the day of the closing of the transaction in which
the Company acquired all the stock of Doctors for Nutrition, Inc. but in no
event shall the option price be below $1.00 per share.  The Option is not intended to qualify as an
“incentive stock option” as that term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended from time to time.

 

(iii)                               OPTION
PERIOD/VESTING.

 

(a)                                  Subject
to the provisions of Section 8, the Options granted to purchase the Vested
Shares can be excercised at any time prior to expiration of the five (5) year
period, subject to certain restricted periods of excercise as governed by the
securities law, and certain board actions that may prohibit the exercise during
certain periods of time.  .

 

(b)                                 As
long as Holder is engaged by the Corporation pursuant to this CSAB Agreement,
Shares of Common Stock underlying this Option shall become “Vested Shares” as
follows:, 1,850 shares of Common Stock shall become Vested Shares on
November 1, 2003, and an additional 1,650 shares of common stock will
become vested shares on the 1st day of every third month for the
term of this agreement.

 

4.                                      RELATIONSHIP
OF PARTIES

 

4.1                                 Independent Contractor.  Consultant is an independent contractor and
is not an agent or employee of, and has no authority to bind, Company.  Consultant will perform the Services under
the general direction of Company, but Consultant will determine the manner and
means by which the Services are accomplished. Consultant acknowledges that
Vital Living shall not have any obligation to follow the advice of Consultant
or the CSAB. Except as set forth in this Agreement, Consultant will not be
entitled to receive benefits from or to participate in any plans designed to
provide benefits for Company’s employees.

 

 

5.                                      Intentionally
Omitted

 

 

6.                                      CONFIDENTIAL
INFORMATION

 

Consultant acknowledges
that Consultant will acquire information and materials from Company and
knowledge about Company including, without limitation, knowledge about
business, marketing plans, pricing practices, products, formulation,
ingredients, dosages, services, inventions, prototypes, cell lines, formula,
processes, programming techniques, experimental work, customers, clients and
suppliers of Company and that all such knowledge, information and materials
acquired, and the Designs and Materials, are and will be the trade secrets and
confidential and proprietary information of Company

 

 

(collectively “Confidential
Information”).  Confidential Information
will not include, however, any information which is or becomes part of the
public domain through no fault of Consultant or that Company regularly gives to
third parties without restriction on use or disclosure.  Consultant agrees to hold all such Confidential
Information in strict confidence, not to disclose it to others or use it in any
way, commercially or otherwise, except in performing the Services, and not to
allow any unauthorized person access to it, either before or after expiration
or termination of this Agreement. 
Consultant further agrees to take all action reasonably necessary and
satisfactory to protect the confidentiality of the Confidential Information.

 

7.                                      TERM
AND TERMINATION

 

This Agreement will commence on the Effective Date and
terminate three years thereafter. 
Either party may terminate this Agreement at any time, for any reason or
for no reason, upon thirty (30) days written notice.

 

8.                                      EFFECT
OF EXPIRATION OR TERMINATION   Upon
the expiration or termination of this Agreement for any reason, (a) each party
will be released from all obligations to the other arising after the date of
expiration or termination, except that expiration or termination of this
Agreement will not relieve either party of its obligations under Sections 3, 4,
5, 6, 8, 9 and 10, nor will expiration or termination relieve Consultant or
Company from any liability arising from any breach of this Agreement; and (b)
Consultant will promptly notify Company of all Confidential Information,
including but not limited to the Designs and Materials, in Consultant’s
possession and promptly deliver to Company, or destroy at Company’s request,
all such Confidential Information.

 

9.                                      WARRANTIES

 

Consultant represents and
warrants to the Company that (a) Consultant’s service on the CSAB does not
conflict with, result in the breach of any provisions of, or constitute a
default under any agreement or other obligation to which Consultant is a party,
and (b) Consultant’s principal place of employment has received full disclosure
as to the Consultant’s service on the CSAB and that such employer consents to
the Consultant’s participation.

 

10.                               GENERAL

 

10.1                           Publicity. 
Consultant shall not publicize or advertise in any manner that
Consultant is performing the Services hereunder, without the prior written
consent of Company.  Consultant hereby grants to Company the right to use
Consultant’s name, approved biography
and approved likenesses in connection with the Company’s business, including
advertising their products and services; and the Company may grant such rights
to others, but not for use as an endorsement of any other product or service.

 

10.2                           Assignment.  Consultant may not assign this Agreement or any of Consultant’s
rights or delegate Consultant’s duties under this Agreement either in whole or
in part, whether by operation of law or otherwise.  Any attempted assignment will be void and of no force and effect.

 

10.3                           Equitable Remedies.  Because the Services are personal and unique
and because Consultant will have access to Confidential Information of Company,
Company will have the right to enforce this Agreement and any of its provisions
by injunction, specific performance or other equitable relief without prejudice
to any other rights and remedies that Company may have for a breach of this
Agreement.

 

 

10.4                           Attorneys’ Fees.  If any action is necessary to enforce the terms of this
Agreement, the substantially prevailing party will be entitled to reasonable
attorneys’ fees, costs and expenses in addition to any other relief to which
such prevailing party may be entitled.

 

10.5                           Governing Law; Severability.  This Agreement will be governed by and
construed in accordance with the laws of the State of California excluding that
body of law pertaining to conflict of laws. 
If any provision of this Agreement is for any reason found to be
unenforceable, the remainder of this Agreement will continue in full force and
effect.

 

10.6                           Notices. 
Any notices under this Agreement will be sent by certified or registered
mail, return receipt requested, or a nationally recognized overnight courier to
the address set forth above or such other address as the party specifies in
writing.  Such notice will be effective
upon its mailing.

 

10.7                           Counterparts.  This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same document.

 

10.8                           Complete Understanding; Modification.  This Agreement constitutes the complete and
exclusive understanding and agreement of the parties and supersedes all prior
understandings and agreements, whether written or oral, with respect to the
subject matter hereof.  Any waiver,
modification or amendment of any provision of this Agreement will be effective
only if in writing and signed by the parties hereto.

 

IN WITNESS WHEREOF, the parties have signed this
Agreement as of the Effective Date.

 

 

	
  VITAL
  LIVING, INC.

  	
  CONSULTANT

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:EXHIBIT 10.1

                 HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.

                             1998 Stock Option Plan

         1. Purposes of Plan. This 1998 Stock Option Plan (the "Plan") is
intended to encourage and enable selected employees, officers, directors and
independent contractors of Health & Nutrition Systems International, Inc. (the
"Company") to acquire or to increase their holdings of shares of the common
stock of the Company, $.001 par value per share (the "Common Stock") in order to
promote a closer identification of their interests with those of the Company and
its stockholders, thereby further stimulating their efforts to enhance the
efficiency, soundness, profitability, growth and stockholder value of the
Company. This purpose will be carried out through the granting of incentive
stock options ("Incentive Stock Options") and nonqualified stock options
("Nonqualified Stock Options"). Incentive Stock Options and Nonqualified Stock
Options shall be collectively referred to herein as "Options."

         2. Administration. The Plan shall be administered by the Board of
Directors, or if appointed by the Board of Directors, by a committee, of not
less than two (2) Directors (the Board sitting as such Committee or such
Committee if appointed, is herein referred to as the "Committee"). The Committee
will administer the Plan and execute award agreements or other documents subject
to the express provisions of the Plan. In addition, the Committee shall have
plenary authority, in its discretion, to determine the individuals to whom, and
the time or times at which, awards of Options under the Plan shall be made,
whether the awards are to be Incentive Stock Options, or otherwise, and the
number of shares of Common Stock of the Company to be contained in each grant of
option, and to establish the terms and conditions of each award (which need not
be identical). Subject to the express provisions of the Plan, the Committee
shall have plenary authority in its discretion to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan,
prescribe and amend the terms and provisions of the stock option agreements
(which need not be identical) and to make all other determinations deemed
necessary or advisable for the administration of the Plan. The determinations of
the Committee on all matters with respect to the Plan shall be conclusive. All
expenses and liabilities incurred by the Committee in the administration of the
Plan shall be borne by the Company. The Committee may, with the approval of the
Board (if applicable) employ attorneys, consultants, accountants or other
persons to assist with the administration of the Plan.

         3. Stock Reserved for the Plan. For purposes of the Plan, 2,500,000
shares of Common Stock may be issued pursuant to the exercise of options granted
hereunder (subject to adjustment as provided in Section 11 below), and the
Company has reserved sufficient authorized shares to provide for the exercise of
such options. Such shares may consist, in whole or in part, of unissued or
treasury shares. If any shares that have been optioned or granted under the Plan
cease to be subject to option or grant or are later forfeited or reacquired by
the Company, as the case may be, such shares may again be made subject to awards
under the Plan.

         4. Participation. Officers, directors and other employees of the
Company, as well as independent contractors of and consultants to the Company,
are eligible to participate in the Plan.

         5. Eligibility for Incentive Stock Options. An Incentive Stock Option
may be granted only to an individual who satisfies all of the following
eligibility requirements on the Granting Date (as defined in Section 7(b)
below):

                  (a) The individual is an employee of the Company. For this
purpose, an individual is considered to be an "employee" only if there exists
between the individual and the Company the legal and bona fide relationship of
employer and employee. In determining whether such a relationship exists, the
regulations of the United States Treasury Department relating to the
determination of the employment relationship for the purpose of collection of
income tax on wages at the source shall be applied.

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<PAGE>

                  (b) The individual is an employee of the Company who the
Committee determines is in a position to affect the profits of the Company by
reason of the nature and extent of such employee's duties, responsibilities,
personal capabilities, performance and potential.

                  (c) With respect to the grant of an Incentive Stock Option,
the individual does not own, immediately before the time that the Incentive
Stock Option is granted, stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company; provided, that a
10% Holder (as defined in Section 7 below) may be granted an incentive option if
the price at which such option may be exercised is greater than or equal to one
hundred ten percent (110%) of the fair market value of the shares of Common
Stock of the fair market value of the Common Stock at the time of the grant of
the option and the period of the option does not exceed five (5) years. For this
purpose, an individual will be deemed to own stock which is attributed to him
under Section 424(d) of the Internal Revenue Code of 1986, as amended (the
"Code").

                  (d) The individual, being otherwise eligible under this
Section 5, is selected by the Committee as an individual to whom an option shall
be granted (a "Grantee").

         6. Eligibility for Nonqualified Stock Options. A Nonqualified Stock
Option may be granted only to an individual who satisfies the following
eligibility requirements on the Granting Date:

                  (a) The individual is an employee, officer or independent
contractor or consultant of the Company. For this purpose, an individual is an
considered to be an "employee" only if there exists between the individual and
the Company or a related corporation the legal and bona fide relationship of
employer and employee. In determining whether such a relationship exists, the
regulations of the United States Treasury Department relating to the
determination of the employment relationship for the purpose of collection of
income tax on wages at the source shall be applied. For this purpose, an
individual is considered an "independent contractor" if that individual performs
services for the Company in a capacity other than as an employee.

                  (b) The individual, being otherwise eligible under this
Section 6, is selected by the Committee as an Grantee.

         7. Terms and Conditions of Options. All Options granted under this plan
shall be subject to the following terms and conditions and any others as the
Committee shall deem desirable:

                  (a) Option Price. The purchase price per share of Common Stock
will be determined by the Committee but the purchase price for Incentive Stock
Options will not be less than one hundred percent (100%) of the fair market
value of the stock on the Granting Date. Such fair market value shall be
determined by the Committee in such manner as it shall deem reasonable and in
compliance with all applicable laws and regulations. The purchase price of the
stock subject to an Incentive Stock Option granted to the holder of ten percent
(10%) or more of the total combined voting power of all classes of stock of the
Company (a "10% Holder") shall be equal to at least one hundred ten percent
(110%) of the fair market value of the Common Stock at the time of the grant of
the option. In no event shall the purchase price per share under any Option be
less than the par value of such stock subject to the Option.

                  (b) Effective Date of Grant. The effective date of the grant
of an Option (the "Granting Date") shall be the date specified by the Committee
in its determination relating to the award of such Option, provided that such
date shall not be prior to the date of such action by the Committee. The
Committee shall promptly notify the Grantee of the grant of an Option, and a
written Stock Option Agreement shall promptly be executed and delivered by and
on behalf of the Company and the Grantee, provided that such grant of an Option
shall expire if a written Stock Option Agreement is not signed by said Grantee
(or his or her agent or attorney) and returned to the Company within sixty (60)
days from the Granting Date.

                  (c) Option Period. The term of each Option, including the
earliest date of exercise and the "vesting" periods for the exercise of the
Options over time shall be fixed by the Committee; provided, however that no
Option shall be exercisable after the expiration of ten (10) years from the
Granting Date (but no more than five (5) years from the Granting Date in the
case of a 10% Holder). The aggregate fair market value (determined as of the
time the Granting Date) of the Stock with respect to which Incentive Stock

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Options are exercisable for the first time by a grantee during any calendar year
(under all plans of the Company and its subsidiaries) shall not exceed One
Hundred Thousand Dollars ($100,000). To the extent Options which first become
exercisable during a calendar year exceed One Hundred Thousand Dollars
($100,000) to one employee, such Options shall be deemed non-qualified stock
Options.

                  (d) Exercise. An Option may be exercised by giving written
notice of exercise to the Company specifying the number of shares to be
purchased and by paying in full the purchase price in cash or certified check,
except to the extent the participant is permitted to defer such payment pursuant
to the Option Agreement with such participant or a separate agreement. The
Committee may make provision for so-called "cashless exercise" pursuant to the
Option Agreement or a separate agreement with the Grantee. The holder of an
Option shall have none of the rights of a stockholder with respect to the shares
subject thereto until such shares shall have been issued and registered on the
Company's transfer books upon such exercise.

                  (e) Non-transferability of Options. No Option or other right
granted under the Plan shall be transferable other than by will and laws of
descent and distribution. An Option or other right shall be exercisable during a
Grantee's lifetime only by the Grantee.

                  (f) Termination by Retirement. Except as may otherwise be
determined by the Committee, if a Grantee who is an employee retires pursuant to
any retirement plan of the Company, his or her outstanding Options may be
exercised (to the extent of the number of shares purchasable by such grantee at
the time of his or her retirement) for up to three months after his or her
retirement date or the stated period of the Option, whichever period is shorter.

                  (g) Termination by Disability. Except as may otherwise be
determined by the Committee, if a Grantee's employment is terminated due to a
disability qualifying such Grantee for payments under any disability plan of the
Company or a subsidiary, his or her outstanding Options may be exercised to the
extent of the remaining shares covered by the Option for up to twelve months
from the date of termination or the stated period of the Option, whichever
period is shorter.

                  (h) Other Termination. Except as may otherwise be determined
by the Committee from time to time, if a Grantee ceases to be an officer,
employee or director of the Company for any reason other than death, disability
or retirement, or in the case of contractors and consultants, ceases to be a
contractor or consultant to the Company, his or her outstanding Options shall
terminate and expire upon the termination of such relationship with the Company.

                  (i) Death of Grantee. In the event of the death of a Grantee
while he or she is employed by the Company, or within the three month period or
the twelve month period provided in Section 7(f) and 7(g) hereof, respectively,
the Options granted to him may be exercised by a legatee or legatees of the
Grantee under his or her last will, or by his or her personal representatives or
distributees, at any time within a period of one year after his or her death
(unless otherwise provided in his or her Stock Option Agreement), but not after
the date on which the Options otherwise expires within such period.

                  (j) Stock Option Agreements. The grant of any Option under the
Plan shall be evidenced by the execution of an agreement between the Company and
the Grantee in such form as may be adopted by the Committee from time to time in
its sole discretion (each a "Stock Option Agreement"). Stock Option Agreements
between the Company and Grantees of options need not be identical, but each such
agreement shall set forth the date of grant of the option, the Option Price, the
Option period, the designation of the Option as an Incentive Stock Option or a
Nonqualified Stock Option, and the time or times when and the conditions upon
the happening of which the Option shall become exercisable. Such agreement shall
also set forth the restrictions, if any, with respect to which the shares to be
purchased thereunder shall be subject, and such other terms and conditions as
the Committee shall determine, which are consistent with the provisions of the
Plan and applicable law and regulations.

                  (k) Incentive Stock Options. It is the intent of the Company
that certain Options granted under the Plan qualify as "incentive stock options"
under Section 422 of the Internal Revenue Code. Accordingly, the Plan is also

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deemed to contain such other terms and conditions necessary (and not contain any
terms and conditions inconsistent with said Section 422) so that certain Options
granted under the Plan shall qualify as Incentive Stock Options under said
Section 422.

                  (l) Discretion of the Committee. The Committee may at any
time, in its sole discretion, accelerate the time at which any or all
restrictions will lapse or remove any or all of such restrictions.

         8. Terms and Conditions. Any Option awarded to the participant under
the Plan shall be subject to the following terms and conditions and any others
as the Committee shall deem desirable:

                  (a) Vesting Acceleration. Except as may otherwise be
determined by the Committee in its sole discretion at any time, upon an
acquisition of the Company, as evidenced by the purchase (other than through the
issuance of stock by the Company) by an independent party of more than fifty
percent (50%) of the outstanding shares, a merger as a result of which more than
fifty percent (50%) of the outstanding capital stock of the Company is held by
persons who were not previously stockholders of the Company, or a sale of all or
substantially all of the Company's assets, all outstanding Options may
immediately be exercised by the grantee thereof. Except as may otherwise be
determined by the Committee in its sole discretion at any time, upon the closing
of the sale of shares of Common Stock in a fully underwritten public offering
(with underwriters approved by the Board of Directors of the Company) pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, where the aggregate sales price of such shares of Common Stock is not
less than $10,000,000, all outstanding Options may immediately be exercised by
the grantee thereof.

                  (b) Delivery of Stock. The Company shall deliver stock
certificates representing the number of shares of Common Stock that have been
fully paid as soon as practicable after receipt of payment from a Grantee. If a
Grantee is allowed under the terms of the Option to make payment of any part of
the purchase price of the Common Stock on a deferred basis, then stock
certificates representing shares of Common Stock shall be delivered to the
Grantee only to the extent that such shares are fully paid.

                  (c) Right as a Shareholder. Upon the exercise of an Option,
the payment in full of the Option price and the issuance of shares, the Grantee
shall have all of the rights of a shareholder with respect to such Common Stock
and the right to receive all dividends paid thereon.

         9. No Right to Company Employment. Nothing in this Plan or as a result
of any award pursuant to this Plan shall confer on any participant any right to
continue in the employ of the Company or of a subsidiary or interfere in any way
with the right of the Company or of a subsidiary to terminate a participant's
employment at any time. Awards granted under the Plan shall not be affected by
any change of employment so long as the participant continues to be an officer,
director, or employee of the Company.

         10. Right of First Refusal. Except as may otherwise be determined by
the Committee in its sole discretion at any time, upon or at any time after
termination of employment or association with the Company by death, disability,
retirement or any other reason, or in the event a Grantee desires to sell or
transfer his or her shares of Common Stock, the Company shall have the right to
purchase any shares owned by the participant at their then current fair market
value. The calculation of fair market value will be determined by the Committee,
in good faith, based upon relevant conditions and circumstances. If the Company
declines to purchase the shares within 30 days after the date the Committee
calculates and determines the fair market value, then the participant shall have
the right to offer the shares for sale to a third party for a period of thirty
days following the lapse of the right of first refusal to the Company;
thereafter such shares shall once again be subject to the right of first refusal
herein provided. The right of first refusal shall terminate at any time a
registration statement is filed by the Company under the Securities Act of 1933,
as amended (the "1933 Act") and is declared effective by the Securities and
Exchange Commission for the public issue of the Company's Common Stock;
provided, however, that the Company has no obligation to the Grantee to register
the Grantee's shares of Common Stock under the 1933 Act.

         11. Adjustments Upon Changes in Capitalization. If there is any change
in the outstanding shares of common stock of the Company as a result of a
merger, consolidation, reorganization, stock dividend, stock split to holders of
shares that is distributable in shares, or other change in the capital stock

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structure of the Company or a related corporation, the Committee shall make such
adjustments to options, to the number of shares reserved for issuance under the
Plan, and to any provisions of this Plan as the Committee deems equitable to
prevent dilution or enlargement of options or otherwise advisable to reflect
such change.

         12. Amendments and Termination. The Committee may amend, alter or
discontinue the Plan in such respects as it shall deem advisable; provided,
however, that the Committee may not, without approval by the holders of the
majority of the outstanding shares of Common Stock of the Company; (i) increase
the aggregate maximum number of shares as to which Options may be granted under
the Plan; or (ii) change the class of participants eligible to receive awards
under the Plan.

         13. Effective Date of the Plan. The Plan shall become effective as of
the date of adoption by the Board of Directors (the "Effective Date"), subject
to approval by the shareholders within one (1) year thereafter.

         14. Term of the Plan. No Options shall be granted pursuant to the Plan
after the date that is ten (10) years after the Effective Date. However,
unexpired options granted prior to such date will remain in effect.

         15. Government and Other Regulations. The obligations of the Company to
issue shares under the Plan, and the transferability of shares shall be subject
to all applicable laws, rules and regulations, and such approvals by any
governmental agencies as may be required, including, without limitation, if
necessary or appropriate, the effectiveness of a registration statement under
the Securities Act of 1933, as amended. All shares issued upon exercise of
options will contain restrictive legends as deemed appropriate by counsel to the
Company.

         16. Tax Withholding. When any Option is exercised, the grantee shall
pay the Company in cash any amount of withholding taxes which the Company may be
required by law to withhold.

         17. Limited Liability. Neither the Company nor any of its officers, or
employees, or any member of the Board of Directors or the Committee, or any
other person participating in any determination of any question under the Plan,
or in the interpretation, administration or applicable of the Plan, shall have
any liability for any action taken, or not taken, in good faith under the Plan,
or based on or arising out of the determination of any question under the Plan,
made in good faith.

         18. Non-Exclusivity of the Plan. Neither the adoption by the Board of
Directors nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board of Directors to adopt such other incentive arrangements as it may deem
desirable, including without limitation, the granting of stock options otherwise
than under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

         19. Applicable Law. The Plan shall be construed and enforced according
to the laws of the State of Florida.

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