Document:

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                                                                   Exhibit 10.65

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of April
___, 2001, by and among Interactive Telesis Inc., a Delaware corporation, with
headquarters located at 535 Encinitas Boulevard, Suite 116, Encinitas,
California 92024 (the "COMPANY"), the undersigned buyers (each, a "BUYER" and
collectively, the "BUYERS") and the Finders (as defined below).

         WHEREAS:

         A.       In connection with the Series B Preferred Stock and Warrants
Purchase Agreement by and among the parties hereto of even date herewith (the
"SERIES B PURCHASE AGREEMENT"), the Company has agreed, upon the terms and
subject to the conditions of the Series B Purchase Agreement, to issue and sell
to the Buyers (i) shares of the Company's Series B Convertible Preferred Stock,
$0.001 par value per share (the "SERIES B PREFERRED STOCK"), convertible into
shares of the Company's Common Stock, $0.001 par value per share ("COMMON
STOCK") and (ii) warrants (the "WARRANTS") to purchase shares of Series B
Preferred Stock (the "WARRANT SHARES"), convertible into shares of Common Stock;

         B.       In connection with the transactions contemplated under the
Securities Purchase Agreement, the Company has agreed to issue to each of Ira
Terk and Next Millennium Capital Holdings, LLC (each, a "FINDER" and
collectively, the "FINDERS"), as payment of a finders' fee, (i) shares of Common
Stock (the "FINDERS SHARES"), and (ii) warrants to purchase shares of Common
Stock (the "FINDERS WARRANTS"), as set forth on the Schedule of Investors
attached hereto.

         C.       To induce the Buyers to execute and deliver the Series B
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, the
Finders and the Buyers hereby agree as follows:

         1.       DEFINITIONS.

                  As used in this Agreement, the following terms shall have the
following meanings:

                  a.       "INVESTOR" means a Buyer or Finder, any transferee or
assignee thereof to whom a Buyer or Finder assigns its rights under this
Agreement and who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 and any transferee or assignee thereof to whom a
transferee or assignee assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9.

                  b.       "PERSON" means a corporation, a limited liability
company, an association, a partnership, an organization, a business, an
individual, a governmental or political subdivision thereof or a governmental
agency.

                  c.       "REGISTER," "REGISTERED," and "REGISTRATION" refer to
a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any

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successor rule providing for offering securities on a continuous basis ("RULE
415"), and the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange Commission (the
"SEC").

                  d.       "REGISTRABLE SECURITIES" means (i) the Finders
Shares, the Common Stock issued or issuable upon exercise of the Finders
Warrants, the Common Stock issued or issuable pursuant to the Series B Purchase
Agreement, including the Common Stock issued or issuable upon conversion of the
Series B Preferred Stock (including the Warrant Shares issued or issuable on
exercise of the Warrants) and (ii) any shares of capital stock issued or
issuable with respect to Registrable Securities, Series B Preferred Stock
(including the Warrant Shares issued or issuable on exercise of the Warrants),
Finders Warrants or Warrants as a result of any stock split, stock dividend,
recapitalization, anti-dilution adjustment, exchange or similar event or
otherwise, without regard to any limitation on exercise or conversion of the
Series B Preferred Stock (including the Warrant Shares issued or issuable on
exercise of the Warrants), Finders Warrants or Warrants.

                  e.       "REGISTRATION STATEMENT" means a registration
statement or registration statements of the Company filed under the 1933 Act.

         2.       REGISTRATION.

                  a.       DEMAND REGISTRATIONS. Subject to the terms of this
Section 2.a and Section 5, at any time after the date hereof, after receipt of a
written request (the "INVESTOR REQUEST") from the holders of Registrable
Securities requesting that the Company effect a registration under the
Securities Act covering at least 40% of the Registrable Securities then
outstanding, and specifying the intended method of disposition thereof, the
Company shall promptly notify all Investors in writing of the receipt of such
request and each such Investor may elect (by written notice sent to the Company
within ten (10) business days from the date of such Investor's receipt of the
aforementioned notice from the Company) to have Registrable Securities included
in such registration thereof pursuant to this Section 2.a. Thereupon, the
Company shall, as expeditiously as possible (and in accordance with Section 3),
use its best efforts to effect the registration under the 1933 Act of all shares
of Registrable Securities which the Company has been so requested to register by
such Investors for sale, all to the extent required to permit the disposition of
all of the Registrable Securities so registered; provided, however, that the
Company shall not be required to effect more than two (2) registrations of
Registrable Securities pursuant to this Section 2.a.

                  b.       PIGGY-BACK REGISTRATIONS. If at any time the Company
proposes to file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the 1933 Act of any of its
securities (other than a Registration Statement on Form S-4 or Form S-8 (or
their equivalents at such time) relating to securities to be issued solely in
connection with any acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit

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plans), the Company shall promptly send to each Investor written notice of the
Company's intention to file a Registration Statement and of such Investor's
rights under this Section 2.b and, if within twenty (20) days after receipt of
such notice, such Investor shall so request in writing, the Company shall
include in such Registration Statement all or any part of the Registrable
Securities such Investor requests to be registered, subject to the priorities
set forth in this Section 2.b below. No right to registration of Registrable
Securities under this Section 2.b shall be construed to limit any registration
required under Section 2.a. The obligations of the Company under this Section
2.b may be waived by Investors holding a majority of the Registrable Securities.
If an offering in connection with which an Investor is entitled to registration
under this Section 2.b is an underwritten offering, then each Investor whose
Registrable Securities are included in such Registration Statement shall, unless
otherwise agreed to by the Company, offer and sell such Registrable Securities
in an underwritten offering using the same underwriter or underwriters and,
subject to the provisions of this Agreement, on the same terms and conditions as
other shares of Common Stock included in such underwritten offering. If a
registration pursuant to this Section 2.b is to be an underwritten public
offering and the managing underwriter(s) advise the Company in writing, that in
their reasonable good faith opinion, marketing or other factors dictate that a
limitation on the number of shares of Common Stock which may be included in the
Registration Statement is necessary to facilitate and not adversely affect the
proposed offering, then the Company shall include in such registration:

                  (1)      first, all securities the Company proposes to sell
for its own account;

                  (2)      second, up to the full number of securities proposed
to be registered for the account of the holders of securities entitled to
inclusion of their securities in the Registration Statement by reason of demand
registration rights; and

                  (3)      third, the securities requested to be registered by
the Investors and other holders of securities entitled to participate in the
registration, as of the date hereof, drawn from them pro rata based on the
number each has requested to be included in such registration.

                  c.       ALLOCATION OF REGISTRABLE SECURITIES. The initial
number of Registrable Securities included in any Registration Statement and each
increase in the number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor's Registrable Securities, each transferee shall be
allocated a pro rata portion of the then remaining number of Registrable
Securities included in such Registration Statement for such transferor. Any
shares of Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities shall be
allocated to the remaining

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Investors, pro rata based on the number of Registrable Securities then held by
such Investors.

                  d.       LEGAL COUNSEL. Subject to Section 5 hereof, the
Investors holding a majority of the Registrable Securities shall have the right
to select one legal counsel to review and oversee as their counsel any offering
pursuant to this Section 2 ("LEGAL COUNSEL"), which shall be Wyrick Robbins
Yates & Ponton LLP as their counsel or such other counsel as thereafter
designated by the holders of a majority of Registrable Securities. The Company
shall reasonably cooperate with Legal Counsel in performing the Company's
obligations under this Agreement.

                  e.       INELIGIBILITY FOR FORM S-3. In the event that Form
S-3 is unavailable for any registration of Registrable Securities hereunder, the
Company shall (i) register the sale of the Registrable Securities on another
appropriate form and (ii) undertake to register the Registrable Securities on
Form S-3 as soon as such form is available, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.

         3.       RELATED OBLIGATIONS.

                  Whenever an Investor has requested that any Registrable
Securities be registered pursuant to Section 2.b or at such time as the Company
is obligated to file a Registration Statement with the SEC pursuant to Section
2.a, the Company will use its best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:

                  a.       The Company shall promptly prepare and file with the
SEC a Registration Statement with respect to the Registrable Securities (on or
prior to the thirtieth (30th) day after the Company's receipt of the Investor
Request (the "DEMAND FILING DATE")) for the registration of Registrable
Securities pursuant to Section 2.a and use its best efforts to cause such
Registration Statements relating to the Registrable Securities to become
effective as soon as possible after such filing (but, in no event later than
ninety (90) days after the Company's receipt of the Investor Request in the
event the SEC does not review the Registration Statement and no later than one
hundred twenty (120) days after the Company's receipt of the Investor Request in
the event the SEC conducts a full review of the Registration Statement (as
applicable, the "DEMAND EFFECTIVE DATE")). The Company shall not file any other
Registration Statement with respect to its securities between the date of the
Investor Request and ninety (90) days after the Demand Effective Date (other
than a Registration Statement on Form S-8 (or its equivalent at such time) or
any Registration Statements required to be filed for securities issued or
issuable to H&QGF pursuant to the existing terms of the Company's equity line
agreement with H&QGF. The Company shall keep any Registration Statement required
to be filed hereunder effective pursuant to Rule 415 at all times until the
earlier of (i) the

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date as of which the Investors may sell all of the Registrable Securities
covered by such Registration Statement without restriction pursuant to Rule
144(k) promulgated under the 1933 Act (or successor thereto) or (ii) the date on
which (A) the Investors shall have sold all the Registrable Securities covered
by such Registration Statement and (B) none of the Series B Preferred Stock
(including the Warrant Shares issued or issuable on exercise of the Warrants),
Finders Warrants or Warrants is outstanding (the "REGISTRATION PERIOD"), which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The term "best efforts" shall mean, among other
things, that the Company shall submit to the SEC, within two business days after
the Company learns that no review of a particular Registration Statement will be
made by the staff of the SEC or that the staff has no further comments on the
Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request.

                  b.       The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3.b by reason of the Company filing a report on Form 10-K, Form
10-Q or Form 8-K or any analogous report under the Securities Exchange Act of
1934, as amended (the "1934 ACT"), the Company shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement the
Registration Statement.

                  c.       The Company shall (a) permit Legal Counsel to review
and comment upon (i) the Registration Statement at least seven (7) days prior to
its filing with the SEC and (ii) all other Registration Statements and all
amendments and supplements to all Registration Statements within a reasonable
number of days prior to the their filing with the SEC and (b) not file any
document in a form to which Legal Counsel reasonably objects. The Company shall
not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior approval of
Legal Counsel, which approval shall not be unreasonably withheld. The Company
shall furnish to Legal Counsel, without charge, (i) any correspondence from the
SEC or the staff of the SEC to the Company or its representatives relating to
any

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Registration Statement, (ii) promptly after the same is prepared and filed with
the SEC, one copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits and (iii) upon the effectiveness of any
Registration Statement, one copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto.

                  d.       The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably request)
and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.

                  e.       The Company shall use reasonable efforts to (i)
register and qualify the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of such jurisdictions
in the United States as Legal Counsel or any Investor reasonably requests, (ii)
prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3.e, (y) subject itself to general taxation in any such jurisdiction, or
(z) file a general consent to service of process in any such jurisdiction. The
Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky" laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.

                  f.       In the event Investors who hold a majority of the
Registrable Securities being offered in the offering select underwriters for the
offering, the Company shall enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriters of such offering; provided, however, that

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the Company shall have the right to consent to the selection of such
underwriter, which consent shall not be unreasonably withheld.

                  g.       As promptly as practicable after becoming aware of
such event, the Company shall notify Legal Counsel and each Investor in writing
of the happening of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue statement or
omission, and deliver ten (10) copies of such supplement or amendment to Legal
Counsel and each Investor (or such other number of copies as Legal Counsel or
such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post- effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by facsimile on the same day of such effectiveness and by overnight
mail), (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, and (iii)
of the Company's reasonable determination that a post- effective amendment to a
Registration Statement would be appropriate.

                  h.       The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify Legal Counsel and each Investor who
holds Registrable Securities being sold (and, in the event of an underwritten
offering, the managing underwriters) of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or threat
of any proceeding for such purpose.

                  i.       At the request of any Investor, the Company shall
furnish to such Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as an Investor may
reasonably request (i) if required by an underwriter, a letter, dated such date,
from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
and (ii) an opinion, dated as of such date, of counsel representing the Company
for purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
underwriters and the Investors.

                  j.       The Company shall make available for inspection by
(i) any Investor, (ii) Legal Counsel, (iii) any underwriter participating in any
disposition pursuant

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to a Registration Statement, (iv) one firm of accountants or other agents
retained by the Investors, and (v) one firm of attorneys retained by such
underwriters (collectively, the "INSPECTORS") all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall hold in strict confidence and shall not make any
disclosure (except to an Investor) or use of any Records or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge. Each Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential.

                  k.       The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

                  l.       The Company shall use its best efforts either to (i)
cause all the Registrable Securities covered by a Registration Statement to be
listed on each securities exchange or market on which securities of the same
class or series issued by the Company are then listed, if any, if the listing of
such Registrable Securities is then permitted under the rules of such exchange
or market, or (ii) secure the inclusion for quotation on the over-the-counter
market on the electronic bulletin board for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. ("NASD") as such with respect to such Registrable Securities. The Company
shall

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pay all fees and expenses in connection with satisfying its obligation under
this Section 3.l.

                  m.       The Company shall cooperate with the Investors who
hold Registrable Securities being offered and, to the extent applicable, any
managing underwriter or underwriters, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the managing underwriter or underwriters, if any, or, if there is no
managing underwriter or underwriters, the Investors may reasonably request and
registered in such names as the managing underwriter or underwriters, if any, or
the Investors may request.

                  n.       The Company shall provide a transfer agent and
registrar of all such Registrable Securities not later than the effective date
of such Registration Statement.

                  o.       If requested by the managing underwriters or an
Investor, the Company shall: (i) immediately incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriters and the Investors agree should be included therein relating to the
sale and distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and any other terms of the underwritten (or best efforts underwritten) offering
of the Registrable Securities to be sold in such offering; (ii) make all
required filings of such prospectus supplement or post-effective amendment as
soon as notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment; and (iii) supplement or make amendments to any
Registration Statement if requested by an Investor or any underwriter of such
Registrable Securities.

                  p.       The Company shall use its best efforts to cause the
Registrable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to consummate the disposition of such Registrable
Securities.

                  q.       The Company shall make generally available to its
security holders as soon as practical, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 1933 Act) covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date of the Registration Statement.

                  r.       The Company shall otherwise use its best efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.

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                  s.       Within two (2) business days after a Registration
Statement which covers applicable Registrable Securities is ordered effective by
the SEC, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Investors whose Registrable Securities are included in such
Registration Statement) confirmation that such Registration Statement has been
declared effective by the SEC in the form attached hereto as EXHIBIT A.

                  t.       The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to a Registration Statement.

                  u.       Notwithstanding anything to the contrary in Section
3.g, at any time after the Registration Statement has been declared effective,
the Company may delay the disclosure of material, non-public information
concerning the Company the disclosure of which at the time is not, in the good
faith opinion of the Board of Directors of the Company and its counsel, in the
best interest of the Company and, in the opinion of counsel to the Company,
otherwise required (a "GRACE PERIOD"); provided, that the Company shall promptly
(i) notify the Investors in writing of the existence of material, non-public
information giving rise to a Grace Period and the date on which the Grace Period
will begin, and (ii) notify the Investors in writing of the date on which the
Grace Period ends; and, provided further, that during any consecutive 365-day
period, there shall be only one Grace Period, such Grace Period not to exceed 20
days in the aggregate (an "ALLOWABLE GRACE PERIOD"). For purposes of determining
the length of a Grace Period above, the Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) above and
shall end on and include the date the Investors receive the notice referred to
in clause (ii) above. Upon expiration of the Allowable Grace Period, the Company
shall again be bound by the first sentence of Section 3.g with respect to the
information giving rise thereto. Notwithstanding anything to the contrary
contained herein, the Investors may exercise or convert Finders Warrants,
Warrants and Series B Preferred Stock (including the Warrant Shares issued or
issuable on exercise of the Warrants) during a Grace Period.

                  v.       Each of the following events shall constitute a
"REGISTRATION DEFAULT" for purposes of this Agreement:

                           (i)      the Company's failure to file a Registration
Statement pursuant to Section 2.a by the Demand Filing Date;

                           (ii)     the SEC's failure to declare a Registration
Statement filed pursuant to Section 2.a effective on or before the Demand
Effective Date, except where the failure to meet such deadline is the result
solely of actions by the holders of Registrable Securities or Legal Counsel;

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                           (iii)    the Company's failure to request
acceleration of the effectiveness of a Registration Statement within two (2)
business days after the SEC has notified the Company that it may file such an
acceleration request as required by Section 3.a hereof, except where the failure
to meet such deadline is a result solely of actions by the holders of
Registrable Securities or Legal Counsel;

                           (iv)     the Investors' inability to sell all
Registrable Securities pursuant to an effective Registration Statement (whether
because of a failure to keep the Registration Statement effective, to disclose
such information as is necessary for sales to be made pursuant to the
Registration Statement, to register sufficient shares of Common Stock or
otherwise); or

                           (v)      the aggregate days of Grace Period exceed
the Allowable Grace Period.

Upon the occurrence of a Registration Default, the Company shall pay each
Investor an amount determined in accordance with the following formula for each
30-day period of such Registration Default:

     2% x P x N for the first 30 days of the first Registration Default, and
     3% x P x N for all continuing subsequent Registration Defaults

         where

     P = the average closing sale price of the Company's Common Stock on the
         Principal Market for the applicable 30 days (for purposes of this
         Agreement, "PRINCIPAL MARKET" shall mean the American Stock Exchange,
         the New York Stock Exchange, the NASDAQ National Market, or the NASDAQ
         SmallCap Market, whichever is at the time the principal trading
         exchange or market for the Common Stock, based upon share volume, or if
         the Common Stock is not traded on an exchange or market, the OTC
         Bulletin Board); and

     N = the number of Registrable Securities that such Investor holds or may
         acquire pursuant to exercise or conversion of Series B Preferred Stock
         (including the Warrant Shares issued or issuable on exercise of the
         Warrants), Finders Warrants or Warrants on the last day of the
         applicable 30-day period (without giving effect to any limitations on
         conversion or exercise of such Series B Preferred Stock (including the
         Warrant Shares issued or issuable on exercise of the Warrants), Finders
         Warrants or Warrants).

If a Registration Default is cured before the end of a 30- day period, the
applicable formula shall be pro-rated. The Company shall pay such amount in cash
on demand by an Investor made at any time during the continuance or after
termination of such

<PAGE>

Registration Default. If the Company does not remit payment of the amount due to
such Investor, the Company will pay the Investor's reasonable costs of
collection, including attorneys' fees. An Investor's right to demand such
payment shall be in addition to any other rights it may have under this
Agreement, the Series B Purchase Agreement or otherwise.

         4.       OBLIGATIONS OF THE INVESTORS.

                  a.       At least seven (7) business days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in such Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request.

                  b.       Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.

                  c.       In the event any Investor elects to participate in an
underwritten public offering pursuant to Section 2.b, each such Investor agrees
to enter into and perform such Investor's obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriter of
such offering and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of the Registrable Securities.

                  d.       Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.h or the first sentence of Section 3.g, such Investor will immediately
discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor's receipt
of the copies of the supplemented or amended prospectus contemplated by Section
3.h or the first sentence of Section 3.g.

                  e.       No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such Investor's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Investors entitled hereunder to approve such arrangements, (ii)
completes and executes all questionnaires,

<PAGE>

powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and (iii)
agrees to pay its pro rata share of all underwriting discounts and commissions.

                  f.       Each Investor agrees not to take any action to cause
such Investor to become a registered broker-dealer as defined under the 1934 Act
or to effect any change to such Investor's status that would preclude the
Company from using Form S-3 for the Registration Statement.

         5.       EXPENSES OF REGISTRATION.

                  All reasonable expenses (other than expenses incurred pursuant
to Section 3.j(iv) and (v) and underwriting discounts and commissions) incurred
in connection with registrations, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company and reasonable fees and disbursements of Legal Counsel,
shall be paid by the Company.

         6.       INDEMNIFICATION.

                  In the event any Registrable Securities are included in a
Registration Statement under this Agreement:

                  a.       To the fullest extent permitted by law, the Company
will, and hereby does, indemnify, hold harmless and defend each Investor who
holds such Registrable Securities, the directors, officers, partners, employees,
agents, representatives of, and each Person, if any, who controls any Investor
within the meaning of the 1933 Act or the 1934 Act, and any underwriter (as
defined in the 1933 Act) for the Investors, and the directors and officers of,
and each Person, if any, who controls, any such underwriter within the meaning
of the 1933 Act or the 1934 Act (each, an "INDEMNIFIED PERSON"), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, attorneys' fees, amounts paid in settlement or expenses, joint or
several, (collectively, "CLAIMS") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency or body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto ("INDEMNIFIED
DAMAGES"), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post- effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other "blue sky" laws of any jurisdiction
in which Registrable Securities are offered ("BLUE SKY FILING"), or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any

<PAGE>

preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material violation
of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "VIOLATIONS").

                  The Company shall reimburse the Investors and each such
underwriter or controlling person, promptly as such expenses are incurred and
are due and payable, for any legal fees or reasonable other expenses incurred by
them in connection with investigating or defending any such Claim.

                  Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6.a: (i) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by such Indemnified Person or underwriter for such Indemnified
Person expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 3.d;
(ii) with respect to any preliminary prospectus, shall not inure to the benefit
of any such person from whom the person asserting any such Claim purchased the
Registrable Securities that are the subject thereof (or to the benefit of any
person controlling such person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the prospectus, as
then amended or supplemented, if such prospectus was timely made available by
the Company pursuant to Section 3.d, and the Indemnified Person was promptly
advised in writing not to use the incorrect prospectus prior to the use giving
rise to a violation and such Indemnified Person, notwithstanding such advice,
used it; (iii) shall not be available to the extent such Claim is based on a
failure of the Investor to deliver or to cause to be delivered the prospectus
made available by the Company, if such prospectus was timely made available by
the Company pursuant to Section 3.d; and (iv) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.

                  b.       In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to severally and
not jointly indemnify, hold harmless and defend, to the same extent and in the
same manner as is set forth in Section 6.a, the Company, each of its directors,
each of its officers who signs the Registration

<PAGE>

Statement, each Person, if any, who controls the Company within the meaning of
the 1933 Act or the 1934 Act (collectively and together with an Indemnified
Person, an "INDEMNIFIED PARTY"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6.d, such
Investor will reimburse any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6.b and the agreement
with respect to contribution contained in Section 7 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable under
this Section 6.b for only that amount of a Claim or Indemnified Damages as does
not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6.b with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus and such prospectus was provided to
Investors as required, as then amended or supplemented.

                  c.       The Company shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution, to the same extent as
provided above, with respect to information such persons so furnished in writing
expressly for inclusion in the Registration Statement.

                  d.       Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or

<PAGE>

Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The Company shall pay reasonable fees for only one separate legal
counsel for the Investors, and such legal counsel shall be selected by the
Investors holding a majority of the issued or issuable Registrable Securities
included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its written consent; provided,
however, that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.

                  e.       The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

         7.       CONTRIBUTION.

                  To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.

<PAGE>

         8.       REPORTS UNDER THE 1934 ACT.

                  With a view to making available to the Investors the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("RULE 144"),
during the Registration Period, the Company agrees to:

                  a.       make and keep public information available, as those
terms are understood and defined in Rule 144;

                  b.       file with the SEC in a timely manner all reports and
other documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements and the filing of such
reports and other documents is required for the applicable provisions of Rule
144; and

                  c.       furnish to each Investor so long as such Investor
owns Registrable Securities, promptly upon request, (i) a written statement by
the Company that it has complied with the reporting requirements of Rule 144,
the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.

         9.       ASSIGNMENT OF REGISTRATION RIGHTS.

                  The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of
Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; and (v)
such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement.

         10.      AMENDMENT OF REGISTRATION RIGHTS.

                  Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who then

<PAGE>

hold or have the right to acquire two- thirds (2/3) of the Registrable
Securities. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

         11.      MISCELLANEOUS.

                  a.       A Person is deemed to be a holder of Registrable
Securities whenever such Person owns or is deemed to own of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

                  b.       Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one business day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

          If to the Company:

               Interactive Telesis Inc
               535 Encinitas Boulevard, Suite 116
               Encinitas, California 92024
               Telephone: (760) 632-1700
               Facsimile: (760) 632-1790
               Attention: Chief Executive Officer

          With a copy to:

               Rushall & McGeever
               Carlsbad, CA 92008
               Telephone:  (760) 438-6855
               Facsimile:  (760) 438-1790
               Attention:  Bruce Rushall, Esq.

If to an Investor, to its address and facsimile number on the signature pages or
Schedule of Investors attached hereto, with copies to such Investor's
representatives as set forth on

<PAGE>

the signature pages or Schedule of Investors or to such other address and/or
facsimile number and/or to the attention of such other person as the recipient
party has specified by written notice given to each other party five days prior
to the effectiveness of such change. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B)
mechanically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, overnight or courier delivery or transmission by facsimile
in accordance with clause (i), (ii) or (iii) above, respectively.

                  c.       Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.

                  d.       All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Delaware, without giving effect to any choice of
law or conflict of law provision or rule that would cause the application of the
laws of any jurisdictions other than the State of Delaware. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting the City of Wilmington, Delaware, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

                  e.       This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.

<PAGE>

                  f.       Subject to the requirements of Section 9, this
Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto.

                  g.       The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                  h.       This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.

                  i.       Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

                  j.       The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent and no
rules of strict construction will be applied against any party.

                  k.       This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.

                                   * * * * * *

<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.

COMPANY:                           BUYERS:

INTERACTIVE TELESIS INC.           BH CAPITAL INVESTMENTS, L.P.
                                     By:  HB and Co., Inc. its General Partner

By:                                By:
   ------------------------           --------------------------------
Name:                                Name: Henry Brachfeld
     ----------------------          Its:  Authorized Signatory
Its:
    -----------------------

                                   EXCALIBUR LIMITED PARTNERSHIP
                                     By:  Excalibur Capital Management, Inc.
                                      Its General Partner

                                   By:
                                      --------------------------------
                                   Name:  William Hechter,
President

FINDERS:

---------------------------
Ira Terk

Next Millennium Capital Holdings, LLC.

By:
   ------------------------
Name:
     ----------------------
Its:
    -----------------------

<PAGE>

                                                        EXHIBIT A

                FORM OF NOTICE OF EFFECTIVENESS
                   OF REGISTRATION STATEMENT

ATTN:

          Re:  INTERACTIVE TELESIS INC.

Ladies and Gentlemen:

         We are counsel to Interactive Telesis Inc., a Delaware corporation (the
"COMPANY"), which has entered into that certain Series B Preferred Stock and
Warrants Purchase Agreement (the "PURCHASE AGREEMENT") by and among the
Company, and the buyers named therein (collectively with the Finders, the
"HOLDERS") pursuant to which the Company issued to the Holders shares of its
Series B Convertible Preferred Stock, $0.001 par value per share (the "SERIES B
PREFERRED STOCK"), convertible into shares of the Company's Common Stock, $0.001
par value per share (the "COMMON STOCK") and Warrants to purchase Series B
Preferred Stock. Pursuant to the Purchase Agreement, the Company also has
entered into a Registration Rights Agreement with the Holders and the Finders
(as defined therein) (the "REGISTRATION RIGHTS AGREEMENT") pursuant to which the
Company agreed, among other things, to register the Registrable Securities (as
defined in the Registration Rights Agreement) under the Securities Act of 1933,
as amended (the "1933 ACT"). In connection with the Company's obligations under
the Registration Rights Agreement, on ____________ ___, 2001, the Company filed
a Registration Statement on Form S-___ (File No. 333-_____________) (the
"REGISTRATION STATEMENT") with the Securities and Exchange Commission (the
"SEC") relating to the Registrable Securities which names each of the Holders as
a selling stockholder thereunder.

         In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

                              Very truly yours,

                              [ISSUER'S COUNSEL]

                              By:
                                 -----------------------------------

<PAGE>

cc:  [LIST NAMES OF HOLDERS AND FINDERS]

                              SCHEDULE OF INVESTORS

<TABLE>

<S>                                                                       <C>                  <C>
NAME OF BUYER           INITIAL NUMBER OF SHARES OF SERIES B PREFERRED
STOCK                   INITIAL NUMBER OF SHARES OF SERIES B PREFERRED

STOCK UNDERLYING WARRANTS

BH CAPITAL INVESTMENTS, L.P. 175 Bloor Street East South Tower, 7th Floor
Toronto, Ontario, Canada M4W 3R8 Fax: 416-929-5314                        50,000               15,000
EXCALIBUR LIMITED PARTNERSHIP 33 Prince Arthur Avenue Toronto, Ontario,
Canada M5R I B2 Fax: 416-964-8868                                         50,000               15,000

NAME OF FINDER          INITIAL NUMBER OF FINDERS SHARES OF COMMON
STOCK            INITIAL NUMBER OF SHARES OF COMMON Stock

UNDERLYING FINDERS WARRANTS
IRA TERK 5889 Stephen Leacock Avenue Montreal, Quebec Canada H4W 3H8      37,500                5,000
NEXT MILLENNIUM CAPITAL HOLDINGS, LLC. 2925 Eastern Blvd
Baldwin Harbor New York, NY 11510                                         37,500                5,000

</TABLE><PAGE>
                                                                   EXHIBIT 10.39

                                    FORM OF
                AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN
                               OF UBIQUITEL INC.

                                 UBIQUITEL INC.
                              AMENDED AND RESTATED
                           2000 EQUITY INCENTIVE PLAN
                        EFFECTIVE AS OF FEBRUARY 6, 2001

                                      1
<PAGE>
                                 UBIQUITEL INC.
                              AMENDED AND RESTATED
                           2000 EQUITY INCENTIVE PLAN

<TABLE>
<C>                     <S>                                                           <C>
          1.            Purpose.....................................................      1
          2.            Definitions.................................................      1
          3.            Administration..............................................      4
                        (a) Authority of the Committee..............................      4
                        (b) Manner of Exercise of Committee Authority...............      4
                        (c) Limitation of Liability.................................      5
          4.            Stock Subject to Plan.......................................      5
                        (a) Limitation on Overall Number of Shares Subject to
                        Awards......................................................      5
                        (b) Application of Limitations..............................      5
          5.            Eligibility; Per-Person Award Limitations...................      5
          6.            Specific Terms of Awards....................................      6
                        (a) General.................................................      6
                        (b) Options.................................................      6
                        (c) Stock Appreciation Rights...............................      7
                        (d) Restricted Stock........................................      8
                        (e) Deferred Stock..........................................      9
                        (f) Bonus Stock and Awards in Lieu of Obligations...........     10
                        (g) Dividend Equivalents....................................     10
                        (h) Other Stock-Based Awards................................     10
          7.            Certain Provisions Applicable to Awards.....................     11
                        (a) Stand-Alone, Additional, Tandem, and Substitute
                        Awards......................................................     11
                        (b) Term of Awards..........................................     11
                        (c) Form and Timing of Payment Under Awards; Deferrals......     11
                        (d) Exemptions from Section 16(b) Liability.................     11
          8.            Performance and Annual Incentive Awards.....................     12
                        (a) Performance Conditions..................................     12
                        (b) Performance Awards Granted to Designated Covered
                        Employees...................................................     12
                        (c) Annual Incentive Awards Granted to Designated Covered
                        Employees...................................................     14
                        (d) Written Determinations..................................     15
                        (e) Status of Section 8(b) and Section 8(c) Awards Under
                        Code Section 162(m).........................................     15
          9.            Change in Control...........................................     15
                        (a) Effect of "Change in Control"...........................     15
                        (b) Definition of "Change in Control".......................     16
                        (c) Definition of "Change in Control Price".................     17
         10.            General Provisions..........................................     17
                        (a) Compliance With Legal and Other Requirements............     17
                        (b) Limits on Transferability; Beneficiaries................     17
                        (c) Adjustments.............................................     18
                        (d) Taxes...................................................     18
                        (e) Changes to the Plan and Awards..........................     19
                        (f) Limitation on Rights Conferred Under Plan...............     19
                        (g) Unfunded Status of Awards; Creation of Trusts...........     19
                        (h) Nonexclusivity of the Plan..............................     20
                        (i) Payments in the Event of Forfeitures; Fractional
                        Shares......................................................     20
                        (j) Governing Law...........................................     20
                        (k) Plan Effective Date and Stockholder Approval;
                        Termination of Plan.........................................     20
</TABLE>

                                      2
<PAGE>
                                 UBIQUITEL INC.
                           2000 EQUITY INCENTIVE PLAN

    1.  PURPOSE.  The purpose of this 2000 Equity Incentive Plan (the "Plan") is
to assist UbiquiTel Inc. (the "Company") and its subsidiaries in attracting,
motivating, retaining and rewarding high-quality executives and other employees,
officers, Directors and independent contractors by enabling such persons to
acquire or increase a proprietary interest in the Company in order to strengthen
the mutuality of interests between such persons and the Company's stockholders,
and providing such persons with annual and long term performance incentives to
expend their maximum efforts in the creation of shareholder value. The Plan is
also intended to qualify certain compensation awarded under the Plan for tax
deductibility under Section 162(m) of the Code to the extent deemed appropriate
by the Committee of the Board of Directors of the Company. Unless otherwise
stated, all references to section numbers are to sections of this Plan. This
Plan was originally adopted by the Board of Directors of the Company effective
as of February 1, 2000. The Plan, as amended and restated herein in its
entirety, shall be effective as of February 6, 2001.

    2.  DEFINITIONS.  For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof.

        (a) "Annual Incentive Award" means a conditional right granted to a
    Participant under Section 8(c) to receive a cash payment, Stock or other
    Award, unless otherwise determined by the Committee, after the end of a
    specified fiscal year.

        (b) "Award" means any Option, SAR (including Limited SAR), Restricted
    Stock, Deferred Stock, Stock granted as a bonus or in lieu of another award,
    Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual
    Incentive Award, together with any other right or interest, granted to a
    Participant under the Plan.

        (c) "Beneficiary" means the person, persons, trust or trusts which have
    been designated by a Participant in his or her most recent written
    beneficiary designation filed with the Committee to receive the benefits
    specified under the Plan upon such Participant's death or to which Awards or
    other rights are transferred if and to the extent permitted under
    Section 10(b) hereof. If, upon a Participant's death, there is no designated
    Beneficiary or surviving designated Beneficiary, then the term Beneficiary
    means the person, persons, trust or trusts entitled by will or the laws of
    descent and distribution to receive such benefits.

        (d) "Beneficial Owner", "Beneficially Owning" and "Beneficial Ownership"
    shall have the meanings ascribed to such terms in Rule 13d-3 under the
    Exchange Act and any successor to such Rule.

        (e) "Board" means the Company's Board of Directors.

        (f) "Change in Control" means Change in Control as defined with related
    terms in Section 9.

        (g) "Change in Control Price" means the amount calculated in accordance
    with Section 9(c).

        (h) "Code" means the Internal Revenue Code of 1986, as amended from time
    to time, including regulations thereunder and successor provisions and
    regulations thereto.

        (i) "Committee" means a committee designated by the Board to administer
    the Plan. The Committee shall consist of at least two directors, each member
    of which shall be (i) a "non-employee director" within the meaning of
    Rule 16b-3 under the Exchange Act, unless administration of the Plan by
    "non-employee directors" is not then required in order for exemptions under
    Rule 16b-3 to apply to transactions under the Plan, and (ii) an "outside
    director" within the meaning of Section 162(m) of the Code, unless
    administration of the Plan by

                                      3
<PAGE>
    "outside directors" is not then required in order to qualify for tax
    deductibility under Section 162(m) of the Code.

        (j) "Corporate Transaction" means a Corporate Transaction as defined in
    Section 9(b)(i).

        (k) "Covered Employee" means an Eligible Person who is a Covered
    Employee as specified in Section 8(e).

        (l) "Deferred Stock" means a right, granted to a Participant under
    Section 6(e) hereof, to receive Stock, cash or a combination thereof at the
    end of a specified deferral period.

        (m) "Director" means a member of the Board.

        (n) "Disability" means a permanent and total disability (within the
    meaning of Section 22(e) of the Code), as determined by a medical doctor
    satisfactory to the Committee.

        (o) "Dividend Equivalent" means a right, granted to a Participant under
    Section 6(g) hereof, to receive cash, Stock, other Awards or other property
    equal in value to dividends paid with respect to a specified number of
    shares of Stock, or other periodic payments.

        (p) "Effective Date" means the effective date of the Plan, which shall
    be February 1, 2000.

        (q) "Eligible Person" means each Executive Officer of the Company (as
    defined under the Exchange Act) and other officers, Directors and employees
    of the Company or of any Subsidiary, and independent contractors with the
    Company or any Subsidiary. The foregoing notwithstanding, only employees of
    the Company or any Subsidiary shall be Eligible Persons for purposes of
    receiving any Incentive Stock Options. An employee on leave of absence may
    be considered as still in the employ of the Company or a Subsidiary for
    purposes of eligibility for participation in the Plan.

        (r) "Exchange Act" means the Securities Exchange Act of 1934, as amended
    from time to time, including rules thereunder and successor provisions and
    rules thereto.

        (s) "Executive Officer" means an executive officer of the Company as
    defined under the Exchange Act.

        (t) "Fair Market Value" means the fair market value of Stock (with no
    discount for minority ownership or lack of liquidity), Awards or other
    property as determined by the Committee or the Board, or under procedures
    established by the Committee or the Board. Unless otherwise determined by
    the Committee or the Board, the Fair Market Value of Stock as of any given
    date if the Company is publicly-held as of such date, shall be the closing
    sale price per share reported on a consolidated basis for stock listed on
    the principal stock exchange or market on which Stock is traded on the date
    as of which such value is being determined or, if there is no sale on that
    date, then on the last previous day on which a sale was reported.

        (u) "Incentive Stock Option" or "ISO" means any Option intended to be
    designated as an incentive stock option within the meaning of Section 422 of
    the Code or any successor provision thereto.

        (v) "Incumbent Board" means the Incumbent Board as defined in
    Section 9(b)(ii).

        (w) "Limited SAR" means a right granted to a Participant under
    Section 6(c).

        (x) "Option" means a right granted to a Participant under Section 6(b),
    to purchase Stock or other Awards at a specified price during specified time
    periods.

        (y) "Other Stock-Based Awards" means Awards granted to a Participant
    under Section 6(h).

                                      4
<PAGE>
        (z) "Parent Corporation" means any corporation (other than the Company)
    in an unbroken chain of corporations ending with the Company, if each of the
    corporations in the chain (other than the Company) owns stock possessing 50%
    or more of the combined voting power of all classes of stock in one of the
    other corporations in the chain.

        (aa) "Participant" means a person who has been granted an Award under
    the Plan which remains outstanding, including a person who is no longer an
    Eligible Person.

        (bb) "Performance Award" means a right, granted to an Eligible Person
    under Section 8, to receive Awards based upon performance criteria specified
    by the Committee or the Board.

        (cc) "Person" shall have the meaning ascribed to such term in
    Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
    thereof, and shall include a "group" as defined in Section 13(d) thereof.

        (dd) "Restricted Stock" means Stock granted to a Participant under
    Section 6(d), that is subject to certain restrictions and to a risk of
    forfeiture.

        (ee) "Rule 16b-3" and "Rule 16a-1(c)(3)" means Rule 16b-3 and
    Rule 16a-1(c)(3), as from time to time in effect and applicable to the Plan
    and Participants, promulgated by the Securities and Exchange Commission
    under Section 16 of the Exchange Act

        (ff) "Stock" means the Company's Common Stock, par value $0.0005 per
    share, and such other securities as may be substituted (or resubstituted)
    for Stock pursuant to Section 10(c).

        (gg) "Stock Appreciation Rights" or "SAR" means a right granted to a
    Participant under Section 6(c).

        (hh) "Subsidiary" means UbiquiTel LLC, and any other corporation or
    other entity in which the Company has a direct or indirect ownership
    interest of 50% or more of the total combined voting power of the then
    outstanding securities or interests of such corporation or other entity
    entitled to vote generally in the election of directors or in which the
    Company has the right to receive 50% or more of the distribution of profits
    or 50% or more of the assets on liquidation or dissolution.

    3.  ADMINISTRATION.

        (a) AUTHORITY OF THE COMMITTEE.  The Plan shall be administered by the
    Committee; provided, however, that except as otherwise expressly provided in
    this Plan or in order to comply with Code Section 162(m) or Rule 16b-3 under
    the Exchange Act, the Board may exercise any power or authority granted to
    the Committee under this Plan. The Committee or the Board shall have full
    and final authority, in each case subject to and consistent with the
    provisions of the Plan, to select Eligible Persons to become Participants,
    grant Awards, determine the type, number and other terms and conditions of,
    and all other matters relating to, Awards, prescribe Award agreements (which
    need not be identical for each Participant) and rules and regulations for
    the administration of the Plan, construe and interpret the Plan and Award
    agreements and correct defects, supply omissions or reconcile
    inconsistencies therein, and to make all other decisions and determinations
    as the Committee or the Board may deem necessary or advisable for the
    administration of the Plan. In exercising any discretion granted to the
    Committee or the Board under the Plan or pursuant to any Award, the
    Committee or the Board shall not be required to follow past practices, act
    in a manner consistent with past practices, or treat any Eligible Person in
    a manner consistent with the treatment of other Eligible Persons.

        (b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY.  The Committee, and not
    the Board, shall exercise sole and exclusive discretion on any matter
    relating to a Participant then subject to Section 16 of the Exchange Act
    with respect to the Company to the extent necessary in order that

                                      5
<PAGE>
    transactions by such Participant shall be exempt under Rule 16b-3 under the
    Exchange Act. Any action of the Committee or the Board shall be final,
    conclusive and binding on all persons, including the Company, its
    subsidiaries, Participants, Beneficiaries, transferees under Section 10(b)
    hereof or other persons claiming rights from or through a Participant, and
    stockholders. The express grant of any specific power to the Committee or
    the Board, and the taking of any action by the Committee or the Board, shall
    not be construed as limiting any power or authority of the Committee or the
    Board. The Committee or the Board may delegate to officers or managers of
    the Company or any subsidiary, or committees thereof, the authority, subject
    to such terms as the Committee or the Board shall determine, (i) to perform
    administrative functions, (ii) with respect to Participants not subject to
    Section 16 of the Exchange Act, to perform such other functions as the
    Committee or the Board may determine, and (iii) with respect to Participants
    subject to Section 16, to perform such other functions of the Committee or
    the Board as the Committee or the Board may determine to the extent
    performance of such functions will not result in the loss of an exemption
    under Rule 16b-3 otherwise available for transactions by such persons, in
    each case to the extent permitted under applicable law and subject to the
    requirements set forth in Section 8(d). The Committee or the Board may
    appoint agents to assist it in administering the Plan.

        (c) LIMITATION OF LIABILITY.  The Committee and the Board, and each
    member thereof, shall be entitled, in good faith, to rely or act upon any
    report or other information furnished to him or her by any executive
    officer, other officer or employee of the Company or a Subsidiary, the
    Company's independent auditors, counsel, consultants or any other agents
    assisting in the administration of the Plan. Members of the Committee and
    the Board, and any officer or employee of the Company or a subsidiary acting
    at the direction or on behalf of the Committee or the Board, shall not be
    personally liable for any action or determination taken or made in good
    faith with respect to the Plan, and shall, to the extent permitted by law,
    be fully indemnified and protected by the Company with respect to any such
    action or determination.

    4.  STOCK SUBJECT TO PLAN.

        (a) LIMITATION ON OVERALL NUMBER OF SHARES SUBJECT TO AWARDS.  Subject
    to adjustment as provided in Section 10(c) hereof, the total number of
    shares of Stock reserved and available for delivery in connection with
    Awards under the Plan, including the number of shares of Stock which may be
    issued pursuant to ISOs, shall be the sum of (i) 7,500,000, plus (ii) the
    number of shares with respect to Awards previously granted under the Plan
    that terminate without being exercised, expire, are forfeited or canceled,
    and the number of shares of Stock that are surrendered in payment of any
    Awards or any tax withholding with regard thereto. Any shares of Stock
    delivered under the Plan may consist, in whole or in part, of authorized and
    unissued shares or treasury shares.

        (b) APPLICATION OF LIMITATIONS.  The limitation contained in
    Section 4(a) shall apply not only to Awards that are settleable by the
    delivery of shares of Stock but also to Awards relating to shares of Stock
    but settleable only in cash (such as cash-only SARs). The Committee or the
    Board may adopt reasonable counting procedures to ensure appropriate
    counting, avoid double counting (as, for example, in the case of tandem or
    substitute awards) and make adjustments if the number of shares of Stock
    actually delivered differs from the number of shares previously counted in
    connection with an Award.

    5.  ELIGIBILITY; PER-PERSON AWARD LIMITATIONS.  Awards may be granted under
the Plan only to Eligible Persons. In each fiscal year during any part of which
the Plan is in effect, an Eligible Person may not be granted Awards relating to
more than 1,500,000 shares of Stock, subject to adjustment as provided in
Section 10(c), under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g), 6(h),
8(b) and 8(c). In addition, the maximum amount that may be earned as an Annual
Incentive Award or other cash

                                      6
<PAGE>
Award in any fiscal year by any one Participant shall be $2,000,000, and the
maximum amount that may be earned as a Performance Award or other cash Award in
respect of a performance period by any one Participant shall be $5,000,000.

    6.  SPECIFIC TERMS OF AWARDS.

        (a) GENERAL.  Awards may be granted on the terms and conditions set
    forth in this Section 6. In addition, the Committee or the Board may impose
    on any Award or the exercise thereof, at the date of grant or thereafter
    (subject to Section 10(e)), such additional terms and conditions, not
    inconsistent with the provisions of the Plan, as the Committee or the Board
    shall determine, including terms requiring forfeiture of Awards in the event
    of termination of employment by the Participant and terms permitting a
    Participant to make elections relating to his or her Award. The Committee or
    the Board shall retain full power and discretion to accelerate, waive or
    modify, at any time, any term or condition of an Award that is not mandatory
    under the Plan. Except in cases in which the Committee or the Board is
    authorized to require other forms of consideration under the Plan, no
    consideration other than services may be required for the grant (but not the
    exercise) of any Award.

        (b) OPTIONS.  The Committee and the Board each is authorized to grant
    Options to Participants on the following terms and conditions:

           (i) EXERCISE PRICE.  The exercise price per share of Stock
       purchasable under an Option shall be determined by the Committee or the
       Board, provided that such exercise price shall not, in the case of
       Incentive Stock Options, be less than 100% of the Fair Market Value of
       the Stock on the date of grant of the Option and shall not, in any event,
       be less than the par value of a share of Stock on the date of grant of
       such Option. If an employee owns or is deemed to own (by reason of the
       attribution rules applicable under Section 424(d) of the Code) more than
       10% of the combined voting power of all classes of stock of the Company
       or any Parent Corporation and an Incentive Stock Option is granted to
       such employee, the option price of such Incentive Stock Option (to the
       extent required by the Code at the time of grant) shall be no less than
       110% of the Fair Market Value of the Stock on the date such Incentive
       Stock Option is granted.

           (ii) TIME AND METHOD OF EXERCISE.  The Committee or the Board shall
       determine the time or times at which or the circumstances under which an
       Option may be exercised in whole or in part (including based on
       achievement of performance goals and/or future service requirements), the
       time or times at which Options shall cease to be or become exercisable
       following termination of employment or upon other conditions, the methods
       by which such exercise price may be paid or deemed to be paid (including
       in the discretion of the Committee or the Board a cashless exercise
       procedure), the form of such payment, including, without limitation,
       cash, Stock, other Awards or awards granted under other plans of the
       Company or any subsidiary, or other property (including notes or other
       contractual obligations of Participants to make payment on a deferred
       basis), and the methods by or forms in which Stock will be delivered or
       deemed to be delivered to Participants.

          (iii) ISOS.  The terms of any ISO granted under the Plan shall comply
       in all respects with the provisions of Section 422 of the Code. No term
       of the Plan relating to ISOs (including any SAR in tandem therewith)
       shall be interpreted, amended or altered, nor shall any discretion or
       authority granted under the Plan be exercised, so as to disqualify either
       the Plan or any ISO under Section 422 of the Code, unless the Participant
       has first requested the change that will result in such disqualification.
       Thus, if and to the extent required to comply

                                      7
<PAGE>
       with Section 422 of the Code, Options granted as Incentive Stock Options
       shall be subject to the following special terms and conditions:

              (A) the Option shall not be exercisable more than ten years after
           the date such Incentive Stock Option is granted; provided, however,
           that if a Participant owns or is deemed to own (by reason of the
           attribution rules of Section 424(d) of the Code) more than 10% of the
           combined voting power of all classes of stock of the Company or any
           Parent Corporation and the Incentive Stock Option is granted to such
           Participant, the term of the Incentive Stock Option shall be (to the
           extent required by the Code at the time of the grant) for no more
           than five years from the date of grant; and

               (B) The aggregate Fair Market Value (determined as of the date
           the Incentive Stock Option is granted) of the Stock with respect to
           which Incentive Stock Options granted under the Plan and all other
           option plans of the Company or its Parent Corporation during any
           calendar year exercisable for the first time by the Participant
           during any calendar year shall not (to the extent required by the
           Code at the time of the grant) exceed $100,000.

        (c) STOCK APPRECIATION RIGHTS.  The Committee and the Board each is
    authorized to grant SAR's to Participants on the following terms and
    conditions:

           (i) RIGHT TO PAYMENT.  A SAR shall confer on the Participant to whom
       it is granted a right to receive, upon exercise thereof, the excess of
       (A) the Fair Market Value of one share of Stock on the date of exercise
       (or, in the case of a "Limited SAR" that may be exercised only in the
       event of a Change in Control, the Fair Market Value determined by
       reference to the Change in Control Price, as defined under
       Section 9(c)), over (B) the grant price of the SAR as determined by the
       Committee or the Board. The grant price of an SAR shall not be less than
       the Fair Market Value of a share of Stock on the date of grant except as
       provided under Section 7(a).

           (ii) OTHER TERMS.  The Committee or the Board shall determine at the
       date of grant or thereafter, the time or times at which and the
       circumstances under which a SAR may be exercised in whole or in
       part (including based on achievement of performance goals and/or future
       service requirements), the time or times at which SARs shall cease to be
       or become exercisable following termination of employment or upon other
       conditions, the method of exercise, method of settlement, form of
       consideration payable in settlement, method by or forms in which Stock
       will be delivered or deemed to be delivered to Participants, whether or
       not a SAR shall be in tandem or in combination with any other Award, and
       any other terms and conditions of any SAR. Limited SARs that may only be
       exercised in connection with a Change in Control or other event as
       specified by the Committee or the Board, may be granted on such terms,
       not inconsistent with this Section 6(c), as the Committee or the Board
       may determine. SARs and Limited SARs may be either freestanding or in
       tandem with other Awards.

        (d) RESTRICTED STOCK.  The Committee and the Board each is authorized to
    grant Restricted Stock to Participants on the following terms and
    conditions:

           (i) GRANT AND RESTRICTIONS.  Restricted Stock shall be subject to
       such restrictions on transferability, risk of forfeiture and other
       restrictions, if any, as the Committee or the Board may impose, which
       restrictions may lapse separately or in combination at such times, under
       such circumstances (including based on achievement of performance goals
       and/or future service requirements), in such installments or otherwise,
       as the Committee or the Board may determine at the date of grant or
       thereafter. Except to the extent restricted under the terms of the Plan
       and any Award agreement relating to the Restricted Stock, a Participant
       granted

                                      8
<PAGE>
       Restricted Stock shall have all of the rights of a stockholder, including
       the right to vote the Restricted Stock and the right to receive dividends
       thereon (subject to any mandatory reinvestment or other requirement
       imposed by the Committee or the Board). During the restricted period
       applicable to the Restricted Stock, subject to Section 10(b) below, the
       Restricted Stock may not be sold, transferred, pledged, hypothecated,
       margined or otherwise encumbered by the Participant.

           (ii) FORFEITURE.  Except as otherwise determined by the Committee or
       the Board at the time of the Award, upon termination of a Participant's
       employment during the applicable restriction period, the Participant's
       Restricted Stock that is at that time subject to restrictions shall be
       forfeited and reacquired by the Company; provided that the Committee or
       the Board may provide, by rule or regulation or in any Award agreement,
       or may determine in any individual case, that restrictions or forfeiture
       conditions relating to Restricted Stock shall be waived in whole or in
       part in the event of terminations resulting from specified causes, and
       the Committee or the Board may in other cases waive in whole or in
       part the forfeiture of Restricted Stock.

          (iii) CERTIFICATES FOR STOCK.  Restricted Stock granted under the Plan
       may be evidenced in such manner as the Committee or the Board shall
       determine. If certificates representing Restricted Stock are registered
       in the name of the Participant, the Committee or the Board may require
       that such certificates bear an appropriate legend referring to the
       restrictions applicable to such Restricted Stock, that the Company retain
       physical possession of the certificates, and that the Participant deliver
       a stock power to the Company, endorsed in blank, relating to the
       Restricted Stock.

           (iv) DIVIDENDS AND SPLITS.  As a condition to the grant of an Award
       of Restricted Stock, the Committee or the Board may require that any cash
       dividends paid on a share of Restricted Stock be automatically reinvested
       in additional shares of Restricted Stock or applied to the purchase of
       additional Awards under the Plan. Unless otherwise determined by the
       Committee or the Board, Stock distributed in connection with a Stock
       split or Stock dividend, and other property distributed as a dividend,
       shall be subject to restrictions and a risk of forfeiture to the same
       extent as the Restricted Stock with respect to which such Stock or other
       property has been distributed.

        (e) DEFERRED STOCK.  The Committee and the Board each is authorized to
    grant Deferred Stock to Participants, which are rights to receive Stock,
    cash, or a combination thereof at the end of a specified deferral period,
    subject to the following terms and conditions:

           (i) AWARD AND RESTRICTIONS.  Satisfaction of an Award of Deferred
       Stock shall occur upon expiration of the deferral period specified for
       such Deferred Stock by the Committee or the Board (or, if permitted by
       the Committee or the Board, as elected by the Participant). In addition,
       Deferred Stock shall be subject to such restrictions (which may include a
       risk of forfeiture) as the Committee or the Board may impose, if any,
       which restrictions may lapse at the expiration of the deferral period or
       at earlier specified times (including based on achievement of performance
       goals and/or future service requirements), separately or in combination,
       in installments or otherwise, as the Committee or the Board may
       determine. Deferred Stock may be satisfied by delivery of Stock, cash
       equal to the Fair Market Value of the specified number of shares of Stock
       covered by the Deferred Stock, or a combination thereof, as determined by
       the Committee or the Board at the date of grant or thereafter. Prior to
       satisfaction of an Award of Deferred Stock, an Award of Deferred Stock
       carries no voting or dividend or other rights associated with share
       ownership.

           (ii) FORFEITURE.  Except as otherwise determined by the Committee or
       the Board, upon termination of a Participant's employment during the
       applicable deferral period thereof to

                                      9
<PAGE>
       which forfeiture conditions apply (as provided in the Award agreement
       evidencing the Deferred Stock), the Participant's Deferred Stock that is
       at that time subject to deferral (other than a deferral at the election
       of the Participant) shall be forfeited; provided that the Committee or
       the Board may provide, by rule or regulation or in any Award agreement,
       or may determine in any individual case, that restrictions or forfeiture
       conditions relating to Deferred Stock shall be waived in whole or in
       part in the event of terminations resulting from specified causes, and
       the Committee or the Board may in other cases waive in whole or in
       part the forfeiture of Deferred Stock.

          (iii) DIVIDEND EQUIVALENTS.  Unless otherwise determined by the
       Committee or the Board at date of grant, Dividend Equivalents on the
       specified number of shares of Stock covered by an Award of Deferred Stock
       shall be either (A) paid with respect to such Deferred Stock at the
       dividend payment date in cash or in shares of unrestricted Stock having a
       Fair Market Value equal to the amount of such dividends, or (B) deferred
       with respect to such Deferred Stock and the amount or value thereof
       automatically deemed reinvested in additional Deferred Stock, other
       Awards or other investment vehicles, as the Committee or the Board shall
       determine or permit the Participant to elect.

        (f) BONUS STOCK AND AWARDS IN LIEU OF OBLIGATIONS.  The Committee and
    the Board each is authorized to grant Stock as a bonus, or to grant Stock or
    other Awards in lieu of Company obligations to pay cash or deliver other
    property under the Plan or under other plans or compensatory arrangements,
    provided that, in the case of Participants subject to Section 16 of the
    Exchange Act, the amount of such grants remains within the discretion of the
    Committee to the extent necessary to ensure that acquisitions of Stock or
    other Awards are exempt from liability under Section 16(b) of the Exchange
    Act. Stock or Awards granted hereunder shall be subject to such other terms
    as shall be determined by the Committee or the Board.

        (g) DIVIDEND EQUIVALENTS.  The Committee and the Board each is
    authorized to grant Dividend Equivalents to a Participant entitling the
    Participant to receive cash, Stock, other Awards, or other property equal in
    value to dividends paid with respect to a specified number of shares of
    Stock, or other periodic payments. Dividend Equivalents may be awarded on a
    free-standing basis or in connection with another Award. The Committee or
    the Board may provide that Dividend Equivalents shall be paid or distributed
    when accrued or shall be deemed to have been reinvested in additional Stock,
    Awards, or other investment vehicles, and subject to such restrictions on
    transferability and risks of forfeiture, as the Committee or the Board may
    specify.

        (h) OTHER STOCK-BASED AWARDS.  The Committee and the Board each is
    authorized, subject to limitations under applicable law, to grant to
    Participants such other Awards that may be denominated or payable in, valued
    in whole or in part by reference to, or otherwise based on, or related to,
    Stock, as deemed by the Committee or the Board to be consistent with the
    purposes of the Plan, including, without limitation, convertible or
    exchangeable debt securities, other rights convertible or exchangeable into
    Stock, purchase rights for Stock, Awards with value and payment contingent
    upon performance of the Company or any other factors designated by the
    Committee or the Board, and Awards valued by reference to the book value of
    Stock or the value of securities of or the performance of specified
    subsidiaries or business units. The Committee or the Board shall determine
    the terms and conditions of such Awards. Stock delivered pursuant to an
    Award in the nature of a purchase right granted under this Section 6(h)
    shall be purchased for such consideration, paid for at such times, by such
    methods, and in such forms, including, without limitation, cash, Stock,
    other Awards or other property, as the Committee or the Board shall
    determine. Cash awards, as an element of or supplement to any other Award
    under the Plan, may also be granted pursuant to this Section 6(h).

    7.  CERTAIN PROVISIONS APPLICABLE TO AWARDS.

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<PAGE>
        (a) STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS.  Awards
    granted under the Plan may, in the discretion of the Committee or the Board,
    be granted either alone or in addition to, in tandem with, or in
    substitution or exchange for, any other Award or any award granted under
    another plan of the Company, any Subsidiary, or any business entity to be
    acquired by the Company or a Subsidiary, or any other right of a Participant
    to receive payment from the Company or any Subsidiary. Such additional,
    tandem, and substitute or exchange Awards may be granted at any time. If an
    Award is granted in substitution or exchange for another Award or award, the
    Committee or the Board shall require the surrender of such other Award or
    award in consideration for the grant of the new Award. In addition, Awards
    may be granted in lieu of cash compensation, including in lieu of cash
    amounts payable under other plans of the Company or any subsidiary, in which
    the value of Stock subject to the Award is equivalent in value to the cash
    compensation (for example, Deferred Stock or Restricted Stock), or in which
    the exercise price, grant price or purchase price of the Award in the nature
    of a right that may be exercised is equal to the Fair Market Value of the
    underlying Stock minus the value of the cash compensation surrendered (for
    example, Options granted with an exercise price "discounted" by the amount
    of the cash compensation surrendered).

        (b) TERM OF AWARDS.  The term of each Award shall be for such period as
    may be determined by the Committee or the Board; but the term of any Option
    or SAR shall not exceed ten years (or such shorter term as may be required
    in respect of an ISO under Section 422 of the Code).

        (c) FORM AND TIMING OF PAYMENT UNDER AWARDS; DEFERRALS.  Subject to the
    terms of the Plan and any applicable Award agreement, payments to be made to
    the Company or a subsidiary upon the exercise of an Option or other Award or
    settlement of an Award may be made in such forms as the Committee or the
    Board shall determine, including, without limitation, cash, Stock that have
    been held for at least 6 months, other Awards or other property, and may be
    made in a single payment or transfer, in installments, or on a deferred
    basis. The settlement of any Award may be accelerated, and cash paid in lieu
    of Stock in connection with such settlement, in the discretion of the
    Committee or the Board or upon occurrence of one or more specified events
    (in addition to a Change in Control). Installment or deferred payments may
    be required by the Committee or the Board (subject to Section 10(e)) or
    permitted at the election of the Participant on terms and conditions
    established by the Committee or the Board. Payments may include, without
    limitation, provisions for the payment or crediting of a reasonable interest
    rate on installment or deferred payments or the grant or crediting of
    Dividend Equivalents or other amounts in respect of installment or deferred
    payments denominated in Stock.

        (d) EXEMPTIONS FROM SECTION 16(B) LIABILITY.  It is the intent of the
    Company that this Plan comply in all respects with applicable provisions of
    Rule 16b-3 or Rule 16a-1(c)(3) to the extent necessary to ensure that
    neither the grant of any Awards to nor other transaction by a Participant
    who is subject to Section 16 of the Exchange Act is subject to liability
    under Section 16(b) thereof (except for transactions acknowledged in writing
    to be non-exempt by such Participant). Accordingly, if any provision of this
    Plan or any Award agreement does not comply with the requirements of
    Rule 16b-3 or Rule 16a-1(c)(3) as then applicable to any such transaction,
    such provision will be construed or deemed amended to the extent necessary
    to conform to the applicable requirements of Rule 16b-3 or Rule 16a-1(c)(3)
    so that such Participant shall avoid liability under Section 16(b). In
    addition, the purchase price of any Award conferring a right to purchase
    Stock shall be not less than any specified percentage of the Fair Market
    Value of Stock at the date of grant of the Award then required in order to
    comply with Rule 16b-3.

    8.  PERFORMANCE AND ANNUAL INCENTIVE AWARDS.

        (a) PERFORMANCE CONDITIONS.  The right of a Participant to exercise or
    receive a grant or settlement of any Award, and the timing thereof, may be
    subject to such performance conditions as

                                      11
<PAGE>
    may be specified by the Committee or the Board. The Committee or the Board
    may use such business criteria and other measures of performance as it may
    deem appropriate in establishing any performance conditions, and may
    exercise its discretion to reduce the amounts payable under any Award
    subject to performance conditions, except as limited under Sections 8(b) and
    8(c) hereof in the case of a Performance Award or Annual Incentive Award
    intended to qualify under Code Section 162(m). If and to the extent required
    under Code Section 162(m), any power or authority relating to a Performance
    Award or Annual Incentive Award intended to qualify under Code
    Section 162(m), shall be exercised by the Committee and not the Board.

        (b) PERFORMANCE AWARDS GRANTED TO DESIGNATED COVERED EMPLOYEES.  If and
    to the extent that the Committee determines that a Performance Award to be
    granted to an Eligible Person who is designated by the Committee as likely
    to be a Covered Employee should qualify as "performance-based compensation"
    for purposes of Code Section 162(m), the grant, exercise and/or settlement
    of such Performance Award shall be contingent upon achievement of
    preestablished performance goals and other terms set forth in this
    Section 8(b).

           (i) PERFORMANCE GOALS GENERALLY.  The performance goals for such
       Performance Awards shall consist of one or more business criteria and a
       targeted level or levels of performance with respect to each of such
       criteria, as specified by the Committee consistent with this
       Section 8(b). Performance goals shall be objective and shall otherwise
       meet the requirements of Code Section 162(m) and regulations thereunder
       including the requirement that the level or levels of performance
       targeted by the Committee result in the achievement of performance goals
       being "substantially uncertain." The Committee may determine that such
       Performance Awards shall be granted, exercised and/or settled upon
       achievement of any one performance goal or that two or more of the
       performance goals must be achieved as a condition to grant, exercise
       and/or settlement of such Performance Awards. Performance goals may
       differ for Performance Awards granted to any one Participant or to
       different Participants.

           (ii) BUSINESS CRITERIA.  One or more of the following business
       criteria for the Company, on a consolidated basis, and/or specified
       Subsidiaries or business units of the Company (except with respect to the
       total stockholder return and earnings per share criteria), shall be used
       exclusively by the Committee in establishing performance goals for such
       Performance Awards (except that the Committee may adopt additional
       business criteria or amend the listed criteria provided that, within
       three years from the Effective Date, it submits such additional or
       amended criteria to the Company's shareholders for approval): (1) total
       stockholder return; (2) such total stockholder return as compared to
       total return (on a comparable basis) of a publicly available index such
       as, but not limited to, the Standard & Poor's 500 Stock; (3) net income;
       (4) pretax earnings; (5) earnings before interest expense, taxes,
       depreciation and amortization; (6) pretax operating earnings after
       interest expense and before bonuses, service fees, and extraordinary or
       special items; (7) operating margin; (8) earnings per share; (9) return
       on equity; (10) return on capital; (11) return on investment; (12)
       operating earnings; (13) working capital or inventory; (14) ratio of debt
       to stockholders' equity; (15) control of churn; (16) increase in number
       of subscribers (measured by percentages, ratios, comparisons, or absolute
       numbers); (17) control of operating costs; and (18) meeting build-out and
       coverage POPs targets. One or more of the foregoing business criteria
       shall also be exclusively used in establishing performance goals for
       Annual Incentive Awards granted to a Covered Employee under Section 8(c)
       hereof that are intended to qualify as "performanced-based compensation
       under Code Section 162(m).

          (iii) PERFORMANCE PERIOD; TIMING FOR ESTABLISHING PERFORMANCE
       GOALS.  Achievement of performance goals in respect of such Performance
       Awards shall be measured over a performance period of up to ten years, as
       specified by the Committee. Performance goals shall be established not
       later than 90 days after the beginning of any performance period
       applicable

                                      12
<PAGE>
       to such Performance Awards, or at such other date as may be required or
       permitted for "performance-based compensation" under Code
       Section 162(m).

           (iv) PERFORMANCE AWARD POOL.  The Committee may establish a
       Performance Award pool, which shall be an unfunded pool, for purposes of
       measuring Company performance in connection with Performance Awards. The
       amount of such Performance Award pool shall be based upon the achievement
       of a performance goal or goals based on one or more of the business
       criteria set forth in Section 8(b)(ii) hereof during the given
       performance period, as specified by the Committee in accordance with
       Section 8(b)(iii) hereof. The Committee may specify the amount of the
       Performance Award pool as a percentage of any of such business criteria,
       a percentage thereof in excess of a threshold amount, or as another
       amount which need not bear a strictly mathematical relationship to such
       business criteria.

           (v) SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS.  Settlement of
       such Performance Awards shall be in cash, Stock, other Awards or other
       property, in the discretion of the Committee. The Committee may, in its
       discretion, reduce the amount of a settlement otherwise to be made in
       connection with such Performance Awards. The Committee shall specify the
       circumstances in which such Performance Awards shall be paid or forfeited
       in the event of termination of employment by the Participant prior to the
       end of a performance period or settlement of Performance Awards.

        (c) ANNUAL INCENTIVE AWARDS GRANTED TO DESIGNATED COVERED EMPLOYEES.  If
    and to the extent that the Committee determines that an Annual Incentive
    Award to be granted to an Eligible Person who is designated by the Committee
    as likely to be a Covered Employee should qualify as "performance-based
    compensation" for purposes of Code Section 162(m), the grant, exercise and/
    or settlement of such Annual Incentive Award shall be contingent upon
    achievement of preestablished performance goals and other terms set forth in
    this Section 8(c).

           (i) ANNUAL INCENTIVE AWARD POOL.  The Committee may establish an
       Annual Incentive Award pool, which shall be an unfunded pool, for
       purposes of measuring Company performance in connection with Annual
       Incentive Awards. The amount of such Annual Incentive Award pool shall be
       based upon the achievement of a performance goal or goals based on one or
       more of the business criteria set forth in Section 8(b)(ii) during the
       given performance period, as specified by the Committee in accordance
       with Section 8(b)(iii). The Committee may specify the amount of the
       Annual Incentive Award pool as a percentage of any such business
       criteria, a percentage thereof in excess of a threshold amount, or as
       another amount which need not bear a strictly mathematical relationship
       to such business criteria.

           (ii) POTENTIAL ANNUAL INCENTIVE AWARDS.  Not later than the end of
       the 90th day of each fiscal year, or at such other date as may be
       required or permitted in the case of Awards intended to be
       "performance-based compensation" under Code Section 162(m), the Committee
       shall determine the Eligible Persons who will potentially receive Annual
       Incentive Awards, and the amounts potentially payable thereunder, for
       that fiscal year, either out of an Annual Incentive Award pool
       established by such date under Section 8(c)(i) or as individual Annual
       Incentive Awards. In the case of individual Annual Incentive Awards
       intended to qualify under Code Section 162(m), the amount potentially
       payable shall be based upon the achievement of a performance goal or
       goals based on one or more of the business criteria set forth in
       Section 8(b)(ii) in the given performance year, as specified by the
       Committee; in other cases, such amount shall be based on such criteria as
       shall be established by the Committee. In all cases, the maximum Annual
       Incentive Award of any Participant shall be subject to the limitation set
       forth in Section 5.

          (iii) PAYOUT OF ANNUAL INCENTIVE AWARDS.  After the end of each fiscal
       year, the Committee shall determine the amount, if any, of (A) the Annual
       Incentive Award pool, and the

                                      13
<PAGE>
       maximum amount of potential Annual Incentive Award payable to each
       Participant in the Annual Incentive Award pool, or (B) the amount of
       potential Annual Incentive Award otherwise payable to each Participant.
       The Committee may, in its discretion, determine that the amount payable
       to any Participant as an Annual Incentive Award shall be reduced from the
       amount of his or her potential Annual Incentive Award, including a
       determination to make no Award whatsoever. The Committee shall specify
       the circumstances in which an Annual Incentive Award shall be paid or
       forfeited in the event of termination of employment by the Participant
       prior to the end of a fiscal year or settlement of such Annual Incentive
       Award.

        (d) WRITTEN DETERMINATIONS.  All determinations by the Committee as to
    the establishment of performance goals, the amount of any Performance Award
    pool or potential individual Performance Awards and as to the achievement of
    performance goals relating to Performance Awards under Section 8(b), and the
    amount of any Annual Incentive Award pool or potential individual Annual
    Incentive Awards and the amount of final Annual Incentive Awards under
    Section 8(c), shall be made in writing in the case of any Award intended to
    qualify under Code Section 162(m). The Committee may not delegate any
    responsibility relating to such Performance Awards or Annual Incentive
    Awards if and to the extent required to comply with Code Section 162(m).

        (e) STATUS OF SECTION 8(B) AND SECTION 8(C) AWARDS UNDER CODE
    SECTION 162(M).  It is the intent of the Company that Performance Awards and
    Annual Incentive Awards under Section 8(b) and 8(c) hereof granted to
    persons who are designated by the Committee as likely to be Covered
    Employees within the meaning of Code Section 162(m) and regulations
    thereunder shall, if so designated by the Committee, constitute "qualified
    performance-based compensation" within the meaning of Code Section 162(m)
    and regulations thereunder. Accordingly, the terms of Sections 8(b), (c),
    (d) and (e), including the definitions of Covered Employee and other terms
    used therein, shall be interpreted in a manner consistent with Code
    Section 162(m) and regulations thereunder. The foregoing notwithstanding,
    because the Committee cannot determine with certainty whether a given
    Participant will be a Covered Employee with respect to a fiscal year that
    has not yet been completed, the term Covered Employee as used herein shall
    mean only a person designated by the Committee, at the time of grant of
    Performance Awards or an Annual Incentive Award, as likely to be a Covered
    Employee with respect to that fiscal year. If any provision of the Plan or
    any agreement relating to such Performance Awards or Annual Incentive Awards
    does not comply or is inconsistent with the requirements of Code
    Section 162(m) or regulations thereunder, such provision shall be construed
    or deemed amended to the extent necessary to conform to such requirements.

    9.  CHANGE IN CONTROL.

        (a) EFFECT OF "CHANGE IN CONTROL."  If and to the extent provided in the
    Award, in the event of a "Change in Control," as defined in Section 9(b),
    the following provisions shall apply:

           (i) Any Award carrying a right to exercise that was not previously
       exercisable and vested shall become fully exercisable and vested as of
       the time of the Change in Control, subject only to applicable
       restrictions set forth in Section 10(a);

           (ii) Limited SARs (and other SARs if so provided by their terms)
       shall become exercisable for amounts, in cash, determined by reference to
       the Change in Control Price;

          (iii) The restrictions, deferral of settlement, and forfeiture
       conditions applicable to any other Award granted under the Plan shall
       lapse and such Awards shall be deemed fully vested as of the time of the
       Change in Control, except to the extent of any waiver by the Participant
       and subject to applicable restrictions set forth in Section 10(a) hereof;
       and

                                      14
<PAGE>
           (iv) With respect to any such outstanding Award subject to
       achievement of performance goals and conditions under the Plan, such
       performance goals and other conditions will be deemed to be met if and to
       the extent so provided by the Committee in the Award agreement relating
       to such Award.

        (b) DEFINITION OF "CHANGE IN CONTROL.  A "Change in Control" shall be
    deemed to have occurred upon:

           (i) Approval by the shareholders of the Company of a reorganization,
       merger, consolidation or other form of corporate transaction or
       series of transactions (but not including a public offering of stock
       registered under the Securities Act of 1933, in each case, with respect
       to which persons who were the shareholders of the Company immediately
       prior to such reorganization, merger or consolidation or other
       transaction do not, immediately thereafter, own more than 50% of the
       combined voting power entitled to vote generally in the election of
       directors of the reorganized, merged or consolidated company's then
       outstanding voting securities, or a liquidation or dissolution of the
       Company or the sale of all or substantially all of the assets of the
       Company (unless such reorganization, merger, consolidation or other
       corporate transaction, liquidation, dissolution or sale (any such event
       being referred to as a "Corporate Transaction") is subsequently
       abandoned);

           (ii) Individuals who, as of the date on which the Award is granted,
       constitute the Board (the "Incumbent Board") cease for any reason to
       constitute at least a majority of the Board, provided that any person
       becoming a director subsequent to the date on which the Award was granted
       whose election, or nomination for election by the Company's shareholders,
       was approved by a vote of at least a majority of the directors then
       comprising the Incumbent Board (other than an election or nomination of
       an individual whose initial assumption of office is in connection with an
       actual or threatened election contest relating to the election of the
       Directors of the Company, as such terms are used in Rule 14a-11 of
       Regulation 14A promulgated under the Exchange Act) shall be, for purposes
       of this Agreement, considered as though such person were a member of the
       Incumbent Board; or

          (iii) the acquisition (other than from the Company) by any person,
       entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of
       the Exchange Act, of more than 30% of either the then outstanding shares
       of the Company's Common Stock or the combined voting power of the
       Company's then outstanding voting securities entitled to vote generally
       in the election of directors (hereinafter referred to as the ownership of
       a "Controlling Interest") excluding, for this purpose, any acquisitions
       by (1) the Company or its Subsidiaries, (2) any person, entity or "group"
       that as of the date on which the Award is granted owns beneficial
       ownership (within the meaning of Rule 13d-3 promulgated under the
       Exchange Act) of a Controlling Interest or (3) any employee benefit plan
       of the Company or its Subsidiaries.

        (c) DEFINITION OF "CHANGE IN CONTROL PRICE."  The "Change in Control
    Price" means an amount in cash equal to the higher of (i) the amount of cash
    and fair market value of property that is the highest price per share paid
    (including extraordinary dividends) in any Corporate Transaction triggering
    the Change in Control under Section 9(b)(i) or any liquidation of shares
    following a sale of substantially all of the assets of the Company, or (ii)
    the highest Fair Market Value per share at any time during the 60-day period
    preceding and the 60-day period following the Change in Control.

    10. GENERAL PROVISIONS.

        (a) COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS.  The Company may, to
    the extent deemed necessary or advisable by the Committee or the Board,
    postpone the issuance or delivery of Stock or payment of other benefits
    under any Award until completion of such registration or

                                      15
<PAGE>
    qualification of such Stock or other required action under any federal or
    state law, rule or regulation, listing or other required action with respect
    to any stock exchange or automated quotation system upon which the Stock or
    other Company securities are listed or quoted, or compliance with any other
    obligation of the Company, as the Committee or the Board, may consider
    appropriate, and may require any Participant to make such representations,
    furnish such information and comply with or be subject to such other
    conditions as it may consider appropriate in connection with the issuance or
    delivery of Stock or payment of other benefits in compliance with applicable
    laws, rules, and regulations, listing requirements, or other obligations.
    The foregoing notwithstanding, in connection with a Change in Control, the
    Company shall take or cause to be taken no action, and shall undertake or
    permit to arise no legal or contractual obligation, that results or would
    result in any postponement of the issuance or delivery of Stock or payment
    of benefits under any Award or the imposition of any other conditions on
    such issuance, delivery or payment, to the extent that such postponement or
    other condition would represent a greater burden on a Participant than
    existed on the 90th day preceding the Change in Control.

        (b) LIMITS ON TRANSFERABILITY; BENEFICIARIES.  No Award or other right
    or interest of a Participant under the Plan, including any Award or right
    which constitutes a derivative security as generally defined in
    Rule 16a-1(c) under the Exchange Act, shall be pledged, hypothecated or
    otherwise encumbered or subject to any lien, obligation or liability of such
    Participant to any party (other than the Company or a Subsidiary), or
    assigned or transferred by such Participant otherwise than by will or the
    laws of descent and distribution or to a Beneficiary upon the death of a
    Participant, and such Awards or rights that may be exercisable shall be
    exercised during the lifetime of the Participant only by the Participant or
    his or her guardian or legal representative, except that Awards and other
    rights (other than ISOs and SARs in tandem therewith) may be transferred to
    one or more Beneficiaries or other transferees during the lifetime of the
    Participant, and may be exercised by such transferees in accordance with the
    terms of such Award, but only if and to the extent such transfers and
    exercises are permitted by the Committee or the Board pursuant to the
    express terms of an Award agreement (subject to any terms and conditions
    which the Committee or the Board may impose thereon, and further subject to
    any prohibitions or restrictions on such transfers pursuant to Rule 16b-3).
    A Beneficiary, transferee, or other person claiming any rights under the
    Plan from or through any Participant shall be subject to all terms and
    conditions of the Plan and any Award agreement applicable to such
    Participant, except as otherwise determined by the Committee or the Board,
    and to any additional terms and conditions deemed necessary or appropriate
    by the Committee or the Board.

        (c) ADJUSTMENTS.  If any dividend or other distribution (whether in the
    form of cash, Stock, or other property), recapitalization, forward or
    reverse split, reorganization, merger, consolidation, spin-off, combination,
    repurchase, share exchange, liquidation, dissolution or other similar
    corporate transaction or event affects the Stock such that a substitution or
    adjustment is determined by the Committee or the Board to be appropriate in
    order to prevent dilution or enlargement of the rights of Participants under
    the Plan, then the Committee or the Board shall, in such manner as it may
    deem equitable, substitute or adjust any or all of (i) the number and kind
    of shares of Stock which may be delivered in connection with Awards granted
    thereafter, (ii) the number and kind of shares of Stock by which annual
    per-person Award limitations are measured under Section 5 hereof, (iii) the
    number and kind of shares of Stock subject to or deliverable in respect of
    outstanding Awards and (iv) the exercise price, grant price or purchase
    price relating to any Award and/or make provision for payment of cash or
    other property in respect of any outstanding Award. In addition, the
    Committee (and the Board if and only to the extent such authority is not
    required to be exercised by the Committee to comply with Code
    Section 162(m)) is authorized to make adjustments in the terms and
    conditions of, and the criteria included in, Awards (including Performance
    Awards and performance goals, and Annual Incentive Awards and any Annual
    Incentive Award pool or performance goals relating thereto) in

                                      16
<PAGE>
    recognition of unusual or nonrecurring events (including, without
    limitation, events described in the preceding sentence, as well as
    acquisitions and dispositions of businesses and assets) affecting the
    Company, any Subsidiary or any business unit, or the financial statements of
    the Company or any Subsidiary, or in response to changes in applicable laws,
    regulations, accounting principles, tax rates and regulations or business
    conditions or in view of the Committee's assessment of the business strategy
    of the Company, any Subsidiary or business unit thereof, performance of
    comparable organizations, economic and business conditions, personal
    performance of a Participant, and any other circumstances deemed relevant;
    provided that no such adjustment shall be authorized or made if and to the
    extent that such authority or the making of such adjustment would cause
    Options, SARs, Performance Awards granted under Section 8(b) or Annual
    Incentive Awards granted under Section 8(c) hereof to Participants
    designated by the Committee as Covered Employees and intended to qualify as
    "performance-based compensation" under Code Section 162(m) and the
    regulations thereunder to otherwise fail to qualify as "performance-based
    compensation" under Code Section 162(m) and regulations thereunder.

        (d) TAXES.  The Company and any Subsidiary is authorized to withhold
    from any Award granted, any payment relating to an Award under the Plan,
    including from a distribution of Stock, or any payroll or other payment to a
    Participant, amounts of withholding and other taxes due or potentially
    payable in connection with any transaction involving an Award, and to take
    such other action as the Committee or the Board may deem advisable to enable
    the Company and Participants to satisfy obligations for the payment of
    withholding taxes and other tax obligations relating to any Award. This
    authority shall include authority to withhold or receive Stock or other
    property and to make cash payments in respect thereof in satisfaction of a
    Participant's tax obligations, either on a mandatory or elective basis in
    the discretion of the Committee.

        (e) CHANGES TO THE PLAN AND AWARDS.  The Board may amend, alter,
    suspend, discontinue or terminate the Plan, or the Committee's authority to
    grant Awards under the Plan, without the consent of stockholders or
    Participants, except that any amendment or alteration to the Plan shall be
    subject to the approval of the Company's stockholders not later than the
    annual meeting next following such Board action if such stockholder approval
    is required by any federal or state law or regulation (including, without
    limitation, Rule 16b-3 or Code Section 162(m)) or the rules of any stock
    exchange or automated quotation system on which the Stock may then be listed
    or quoted, and the Board may otherwise, in its discretion, determine to
    submit other such changes to the Plan to stockholders for approval; provided
    that, without the consent of an affected Participant, no such Board action
    may materially and adversely affect the rights of such Participant under any
    previously granted and outstanding Award. The Committee or the Board may
    waive any conditions or rights under, or amend, alter, suspend, discontinue
    or terminate any Award theretofore granted and any Award agreement relating
    thereto, except as otherwise provided in the Plan; provided that, without
    the consent of an affected Participant, no such Committee or the Board
    action may materially and adversely affect the rights of such Participant
    under such Award. Notwithstanding anything in the Plan to the contrary, if
    any right under this Plan would cause a transaction to be ineligible for
    pooling of interest accounting that would, but for the right hereunder, be
    eligible for such accounting treatment, the Committee or the Board may
    modify or adjust the right so that pooling of interest accounting shall be
    available, including the substitution of Stock having a Fair Market Value
    equal to the cash otherwise payable hereunder for the right which caused the
    transaction to be ineligible for pooling of interest accounting.

        (f) LIMITATION ON RIGHTS CONFERRED UNDER PLAN.  Neither the Plan nor any
    action taken hereunder shall be construed as (i) giving any Eligible Person
    or Participant the right to continue as an Eligible Person or Participant or
    in the employ of the Company or a Subsidiary; (ii) interfering in any way
    with the right of the Company or a Subsidiary to terminate any Eligible
    Person's or Participant's employment at any time, (iii) giving an Eligible
    Person or Participant any

                                      17
<PAGE>
    claim to be granted any Award under the Plan or to be treated uniformly with
    other Participants and employees, or (iv) conferring on a Participant any of
    the rights of a stockholder of the Company unless and until the Participant
    is duly issued or transferred shares of Stock in accordance with the terms
    of an Award.

        (g) UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS.  The Plan is intended
    to constitute an "unfunded" plan for incentive and deferred compensation.
    With respect to any payments not yet made to a Participant or obligation to
    deliver Stock pursuant to an Award, nothing contained in the Plan or any
    Award shall give any such Participant any rights that are greater than those
    of a general creditor of the Company; provided that the Committee may
    authorize the creation of trusts and deposit therein cash, Stock, other
    Awards or other property, or make other arrangements to meet the Company's
    obligations under the Plan. Such trusts or other arrangements shall be
    consistent with the "unfunded" status of the Plan unless the Committee
    otherwise determines with the consent of each affected Participant. The
    trustee of such trusts may be authorized to dispose of trust assets and
    reinvest the proceeds in alternative investments, subject to such terms and
    conditions as the Committee or the Board may specify and in accordance with
    applicable law.

        (h) NONEXCLUSIVITY OF THE PLAN.  Neither the adoption of the Plan by the
    Board nor its submission to the stockholders of the Company for approval
    shall be construed as creating any limitations on the power of the Board or
    a committee thereof to adopt such other incentive arrangements as it may
    deem desirable including incentive arrangements and awards which do not
    qualify under Code Section 162(m).

        (i) PAYMENTS IN THE EVENT OF FORFEITURES; FRACTIONAL SHARES.  Unless
    otherwise determined by the Committee or the Board, in the event of a
    forfeiture of an Award with respect to which a Participant paid cash or
    other consideration, the Participant shall be repaid the amount of such cash
    or other consideration. No fractional shares of Stock shall be issued or
    delivered pursuant to the Plan or any Award. The Committee or the Board
    shall determine whether cash, other Awards or other property shall be issued
    or paid in lieu of such fractional shares or whether such fractional shares
    or any rights thereto shall be forfeited or otherwise eliminated.

        (j) GOVERNING LAW.  The validity, construction and effect of the Plan,
    any rules and regulations under the Plan, and any Award agreement shall be
    determined in accordance with the laws of the State of Delaware without
    giving effect to principles of conflicts of laws, and applicable federal
    law.

        (k) PLAN EFFECTIVE DATE AND STOCKHOLDER APPROVAL; TERMINATION OF
    PLAN.  The Plan first become effective on February 1, 2000, and the Plan, as
    amended and restated shall be effective on February 6, 2001, subject to
    subsequent approval within 12 months of its adoption by the Board by
    stockholders of the Company eligible to vote in the election of directors,
    by a vote sufficient to meet the requirements of Code Sections 162(m) and
    422. Awards may be granted under the Plan, as amended and restated, subject
    to stockholder approval, but may not be exercised or otherwise settled in
    the event stockholder approval is not obtained. The Plan shall terminate at
    such time as no shares of Stock remain available for issuance under the Plan
    and the Company has no further rights or obligations with respect to
    outstanding Awards under the Plan.

                                      18

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