Document:

Exhibit 10.2

Exhibit 10.2

Exclusive Recording Artist Agreement

This Agreement is made as of the 7th day of February, 2005 by and between G2 VENTURES, INC. (hereinafter "G2") and Nick Brisco, individually p/k/a "Nick Brisco" (hereinafter "Artist").

	 ARTIST'S WARRANTIES AND REPRESENTATIONS

1.01.     Artist represents and warrants that: (a) it is authorized, empowered and able to enter into and fully perform its obligations under this Agreement; (b) neither this Agreement nor the fulfillment thereof by any party infringes upon the rights of any other person or entity; (c) it has not and will not do anything that impairs G2's rights under this Agreement, nor will it permit any other person or entity to do so; and (d) Artist is resident in the United States of America for income tax purposes.

1.02.   &nbsd; Artist further represents and warrants that: (a) there now exist no prior recorded performances by Artist other than those listed on the attached Exhibit A and that no recordings from those Masters will be released during the term hereof; (c) none of the Masters delivered to G2 by Artist, nor the performances embodied thereon, nor any other Materials, nor any use thereof by G2 or its grantees, licensees or assigns, will violate or infringe upon the rights of any third party. "Materials," as used in this Paragraph, means all Controlled Compositions, each name used by Artist, any logo used by Artist, and all other musical, artistic, literary and other materials, ideas and other intellectual properties furnished by Artist or any other producer engaged by Artist and contained or used in connection with any Masters made hereunder, or the packaging, sale, advertising or other exploitation thereof.

	TERM AND RECORDING COMMITMENT

2.01.     The Term of this Agreement shall be for an Initial Period commencing on the date hereof and expiring nine months thereafter.

2.02.     Artist hereby grants to G2 three (3) separate and irrevocable options to extend the Term of this Agreement for further periods (the "Option Periods") commencing immediately upon the expirations of the Initial Period and expiring one year after delivery to G2 of the Minimum Recording Commitment for said Option Period. Each option shall be exercised by written notice from G2 to Artist postmarked or delivered before upon the expiration of the prior terms; provided that, G2 shall have a thirty day right to cure any inadvertent failure to exercise such option. 

2.03.     During the Term of this Agreement (as the same may be extended) Artist agrees to produce and Artist shall deliver to G2 Masters comprising sound alone sufficient to comprise the following (the "Minimum Recording Commitment"):

 

 

(a)   during the Initial Period- - one (1) Album (the "First Album")

(b)   during the First Option Period- - one (1) Album (the "Second Album")

(c)   during the Second Option Period- - one (1) Album (the "Third Album")

(d)   during the Third Option Period- - one (1) Album (the "Fourth Album")

2.04.     Notwithstanding anything else herein to the contrary: 

(a)     Each Album shall be delivered to G2 within four (4) months after the commencement of the applicable Initial Period of Option Period. The Album currently being recorded by the Artist shall, when delivered, count as the Minimum Recording Commitment for the Initial Period.

(b)     Artist shall not commence the recording of any Album hereunder earlier than three (3) months following the delivery to G2 of the prior album.

(c)   G2 shall not be obliged to accept delivery of any Album hereunder earlier than one year following the date of delivery to G2 of the prior album. If any such premature delivery is tendered, the contractual date of deliver hereunder of such Album shall be deemed to be the date one year following the date of delivery of the prior album, provided that the prior album has been recorded and delivered in all respects in accordance with the provisions of this Agreement and comprises acceptable Masters as herein provided.

(d)   In the event that, during the Initial Period of the Option Periods, Artist produces more than the Minimum Recording Commitment, G2 shall as its sole option be entitled to treat such additional material (or some of it) as counting towards the Minimum Recording Commitment (or not) but said additional material shall be and remain the sole and exclusive property of G2 subject to the provisions of this Agreement.

(e)   Each Album delivered shall consist of not less than ten (10) Masters and not less than forty-five (45) nor more than seventy-four (74) minutes of Artist's performances. Each Master shall consist of not less than two minutes and thirty seconds of Artist's performances. No Album consisting of Artist's "live" performances shall be deemed to be in fulfillment of any of Artist's obligations hereunder except that upon mutual consent, in writing, a live recording may be accepted in fulfillment of Artist's Minimum Recording Commitment. If any such performances are recorded during the Term hereof, G2 shall be the owner thereof and shall have the right to exploit same under the same terms as contained herein for the First Album, except that no advance will be paid to Artist. No Multiple Albums shall be delivered hereunder without G2's prior written consent; any such Multiple Album delivered to and accepted by G2 shall be deemed a single Album for all purposes hereof. No Mini-Album shall form part of the Minimum Recording Commitment unless expressly agreed in writing by G2 at its absolute discretion.

 

 

(f)   Artist shall deliver to G2 each Master hereunder in the form of a digital two-track stereo tape master, as well as reference discs which are representative of such tape masters. Artist shall also deliver at the same time any multi-track master tapes recorded in connection with the same project. The two-track stereo master tape shall be fully edited, mixed, equalized and leadered for the production of parts from which satisfactory Phonograph Records can be manufactured.

(g)   As used in this Agreement, "delivery" shall mean the receipt of all tape masters as provided herein, as well as Artist's submission to G2 in written form of all necessary information, consents, licenses and permissions that G2 requires to manufacture, distribute and release the Masters as Phonograph Records, including, but not limited to, mechanical licenses, credits, musician and producer releases, and any information required to be delivered to unions or other third parties. Payment of funds due at delivery by G2 shall not be deemed a waiver of information or documents required hereunder.

(h)   Artist shall be available to G2 and shall perform for the purposes of making such music videos at such time and places as G2 shall reasonably agree with Artist. The cost of making such music videos shall be deemed advances hereunder and shall be fifty percent (50%) recoupable from all sources, excluding Mechanical Royalties, payable to Artist hereunder.

	 GRANT OF RIGHTS

3.01.     During the Term of this Agreement, Artist shall furnish to G2 its exclusive recording services throughout the Universe. Any contract entered into by Artist or on Artist's behalf during the Term hereof or any extensions thereof for Artist's performances in television or radio broadcasts or motion pictures or stage productions shall specifically exclude the right to use any recording of such performance for the manufacture and sale of Phonograph Records or music videos unless previously authorized in writing by G2. Artist shall promptly deliver to G2 copies of the pertinent provisions of each such contract and Artist will cooperate fully with G2 in any controversy dispute or litigation which may arise in relation to the rights of G2 under this Paragraph.

3.02.     Artist hereby grants and assigns to G2 all rights of every kind and the complete, unconditional, exclusive, perpetual, unencumbered title throughout the Universe in and all results and products of Artist's services and performances hereunder, any and all Masters, records, tapes, sound recordings, music videos, long form videos, and other material of every kind made or authorized by G2 hereunder or otherwise produced during the Option Terms and which include the voice, instrumental or other sound and/or visual effects, services, or performances of  Artist, including without limitation the right to record, reproduce, broadcast, transmit, publish, sell, exhibit, distribute, advertise, exploit, perform, and use the same separately or in combination with any other material for any purpose in any manner, under any label, trademark, or other identification and by any means or method, whether known or not now known, invented, used or contemplated, and to refrain from all or any part thereof.

 

 

3.03.     Without in any way limiting the generality of the foregoing, Artist hereby grants to G2 the following rights throughout the Universe which G2 may use or refrain from using as it elects in G2's sole discretion:

(a)   the exclusive right during the Term hereof to manufacture, distribute, and sell anywhere in the Universe Phonograph Records and music videos reproducing Artist's performances;

(b)   the exclusive right for the full periods of copyright to manufacture, distribute, and sell throughout the Universe Phonograph Records and music videos produced from Masters made during the Option Terms hereunder;

(c)   the exclusive right for the full periods of copyright to manufacture, distribute, and sell throughout the Universe Phonograph Records and music videos produced from masters made during the Option Terms hereunder;

(d)   the exclusive right to authorize public performances in the Universe of Phonograph Records and music videos produced during the Option Terms hereunder;

(e)   the right to permit and authorize others to exercise, directly or through persons designated by them, any and all G2's rights hereunder.

3.04.     (a)   Each Master (including all sound recordings embodied thereon) produced hereunder or embodying Artist's performances and recorded during the Initial Term shall belong to Artist. Artist grants G2 a security interest in and to its copyright in the First Album to secure recoupment of all sums expended by G2 in the recording and promotion of all Albums recorded under this Agreement. Artist further agrees to execute any document reasonably necessary to perfect such security interest. In the event Artist fails to execute any such documents or instruments Artist hereby irrevocably grants G2 power of attorney, coupled with any interest, to execute all such security agreements.

(b)   Each Master (including all sound recordings embodied thereon) produced hereunder or embodying Artist's performances and recorded during the Option Terms shall, from the inception of its creation, be considered a "work made for hire" for G2 within the meaning of the U.S. Copyright Law. If it is determined that a Master does not so qualify then such Master, together with all rights in it (including the sound recording copyright), shall be deemed, and hereby transferred and assigned to G2 by this Agreement. Artist agrees to execute and deliver to G2 any and all documents or instruments which G2 may request in order to confirm G2's acquisition and/or title to the Masters (including the copyright) as described herein. In the event Artist fails to execute any such documents or instruments Artist hereby irrevocably grants to G2 power of attorney, coupled with an interest, to execute all such documents of conveyance. All Masters recorded by Artist from the inception of the recording thereof and all reproductions derived therefrom, together with the performances embodied thereon, shall be entirely the property of G2 in perpetuity, throughout the Universe, free of any claim whatsoever by Artist or any persons deriving any rights or interests therefrom.

 

 

3.05.     Artist shall not authorize or permit Artist's performances to be recorded for any purpose without obtaining an express written approval of G2, and Artist shall take reasonable measures to prevent the manufacture, distribution and sale of Phonograph Records or music videos containing its performances (and the use of Artist's name and likeness in connection therewith) by any person or entity other than G2, its successors, licensees and assigns.

3.06.     Artist grants G2 the right to include any Master produced and delivered hereunder in a soundtrack or compilation album, at any time, and without any further advance, except that royalties shall be payable as provided herein.

3.07.     As used in this Agreement, "Phonograph Records" shall include any and all mechanical reproductions of the Masters produced and delivered hereunder, in any format, whether now known or unknown, including but not limited to compact discs, cassette tapes, vinyl records, DAT tapes or any future format. 

	 RECORDING COSTS AND PROCEDURES

4.01.     Advances payable to Artist pursuant to this Agreement are and shall be inclusive of all costs incurred in the course of producing and recording Masters hereunder (including without limitation, the costs of studio time, musician fees, union payments, instrument hire, producer's fees, and the cost of tape editing, mixing, remixing and masters, advances, and other similar costs customarily regarded in the industry as being recording costs.) All such costs are sometimes herein referred to as "recording costs" and shall constitute advances recoupable from royalties payable hereunder. G2 shall, in accordance with the provisions of this Agreement, deduct and retain out of said advances such sums as may be necessary to pay the said recording coasts. In the event that, as a result of an event within the control of the Artist but unapproved by G2, any recording costs shall exceed the amount of the recording fund specifically referred to in Paragraph 5.01. below, then the excess costs shall (if paid by G2) constitute a loan to Artist payable on demand and without prejudice to G2's other rights and the same shall, at G2's election, be recoverable by G2 out of any monies payable by G2 to Artist or on Artist's behalf hereunder. Any recording cost that exceeds the amount of the recording fund specifically referred to in Paragraph 5.01 below, but which has been approved by G2, shall be treated as an increase in said recording fund.

4.02.     G2 and Artist shall, prior to the commencement of any recording: (a) mutually designate the producer(s) of all Masters hereunder; and (b) agree on a budget for recording costs. G2 shall not unreasonably withhold its consent to any budget for recording costs that is less than ninety percent (90%) of the recording fund for that album as specified in Paragraph 5.01. G2 has previously approved the budgets for the First and Second Albums.

 

 

4.03.     Artist shall be properly rehearsed and shall appear at the times and places designated by G2 after consultation with and reasonable notice to Artist from time to time for all recording sessions required hereunder and at each session Artist shall tender their professional services to the best of their ability. G2 and Artist shall mutually designate the material to be recorded and each Master shall be subject to G2's approval as technically and commercially satisfactory. Upon G2's request, Artist shall re-record any material until a Master, which in G2's sole judgment is satisfactory, shall be obtained.

4.04.     The Masters delivered to G2 by Artist under this Agreement and the performances embodied therein shall be produced in accordance with the rules and the regulations of the American Federation of Musicians, the American Federation of Television and Radio Artists and all other unions having jurisdiction. Artist is or will become and remain, to the extent necessary to fulfill this Agreement, a member in good standing of all labor unions or guilds in which membership may be required for the performance of Artist's services hereunder.

4.05.     Artist shall not perform for or in connection with (and shall not permit any other person or entity to use Artist's name or likeness in connection with) the recording or exploitation of any Phonograph Record embodying any Composition recorded by Artist under this Agreement prior to a date five (5) years subsequent to the expiration or termination of the term of this Agreement, or any extensions thereof.

4.06.     Without limiting the foregoing, G2 shall not be required to make any payments of any kind for, or in connection with, the acquisition, exercise or exploitation of rights by G2 except as specifically provided in this Agreement. Artist shall be solely responsible for all sums due to labor unions or guilds, individual musicians, producers and all other persons or entities entitled to received royalties or other payments in connection with the sale of Phonograph Records derived from Masters hereunder, although G2 will undertake to make all such payments to the extent of the recording fund specified in Paragraph 5.01, and Artist's liability to producers for royalties shall be limited to two percent of retail. None of the persons whose performances are embodied in the Masters or whose services are used in recording the Masters shall be bound by any otherwise bound or restricted, Artist shall obtain all necessary clearances in writing. 

	 ADVANCES AND RECORDING FUND

5.01.  As advances against and recoupable from royalties payable hereunder, G2 agrees to pay with respect to each Album constituting the Minimum Recording Commitment hereunder a sum equal to the amount by which the applicable sum set forth below ("Album Recording Fund") exceeds the sum of the documented receipts for the recording costs concerned and any other advances made to Artist prior to delivery of the applicable Album:

	
Album Recording Fund:
	
First Album
	
$15,000

	 	
Second Album
	
$20,000

 

 

	 	
Third Album
	
$35,000

	 	
Fourth Album
	
$75,000

5.02.     If net sales through normal retail channels in the United States for which royalties are payable pursuant to Paragraph 6.01(a) below, net of applicable reserves of any album shall exceed seventy-five thousand (75,000) units as of the date nine (9) months after the initial release of that album in the United States, then the Album Recording Fund on the next subsequent album shall be increases by Ten Thousand Dollars ($10,000).

5.03.     The advances due under Paragraph 5.01 shall be payable promptly following the deliver to G2 of (a) the Minimum Recording Commitment; (b) the documents required under Paragraph 2.4(g); and (c) all invoices pertaining to the recording of the Minimum Recording Commitment. With respect to payments to be made following delivery, G2 shall have the right to withhold ten percent (10%) for ninety (90) days to provide for anticipated costs which have not yet been paid. 

5.04.     All advances paid to Artist or on Artist's behalf shall be recoupable against the royalties payable under this Agreement, from whatever the source, except that advances shall not be recoupable against Mechanical Royalties except as provided for in Paragraph 8.01.

	 ROYALTIES

6.01.     Subject to Artist's compliance with all obligations required of Artist hereunder and subject as otherwise granted herein, G2 will pay to Artist for the rights granted herein and for the services performed hereunder the royalties set out below, being percentages of one hundred percent (100%) of G2's published wholesale price, exclusive of taxes and duties actually paid by G2, and the container cost deductions specified below for all records and music videos manufactured, sold and not returned, and for which G2 is paid reproducing exclusively Masters recorded hereunder, namely:

(a)   With respect to the sales for distribution in the United States of Albums reproducing exclusively Masters hereunder: Twenty Percent (20%).

(b)   The royalty rate with respect to 12-inch singles shall be fifteen percent (15%).

(c)   The royalty rate with respect of 7-inch singles and other records shall be twelve percent (12%).

(d)   The royalty rate with respect to the following is thirteen percent (13%): records sold to any government body, PX  sales, sales to educational institutions, record clubs, soundtrack records, compilation records, budget records (defined as a record which is sold as wholesale price of at least fifty percent but less than eighty percent of G2's published wholesale price), and EP records (defined as records containing between three and nine Masters): except that the royalty rate for compilations releases exclusively on the G2 label shall be twenty percent (20%). Royalties for soundtracks and compilations on which Artist appears with other performers shall be pro-rated in the same proportion that Artist's Master bear to the entire album.

 

 

(e)   Foreign royalty rate: The rate for the records manufactured by G2 or G2's affiliates and sold outside the United States will be sixty-six and two-thirds percent (66 2/3%) of the applicable royalty except that the royalty rate for masters licensed by G2 outside the United States shall be fifty percent (50%) of the net income therefrom. Net income shall mean all income received less third party out of pocket expenses to establish the license, third party out of pocket collection costs, foreign currency exchange, wire transfer fees and applicable taxes. 

(f)   Royalty rate for music videos sold and not returned shall be ten percent (10%) of G2's published wholesale price.

	 ROYALTY PAYMENTS

7.01.     Royalties earned hereunder will be accrued semi-annually and paid, less all advances, taxes, and any other charges, within sixty (60) days following each June 30th and December 31st for the preceding six (6) month period, in accordance with G2's regular accounting practices. G2 shall, however, have the right to establish reasonable reserves for returns and exchanges, said reserves not to exceed thirty percent (30%). Each reserve established hereunder shall be liquidated at the end of the following semi-annual period. If G2 makes any overpayment of royalties (e.g., by reason of an accounting error or paying royalties on Records returned later), G2 shall have the right to offset such overpayment against any subsequent payment due to Artist from G2. 

7.02.     Each royalty payment hereunder shall be accompanied by a statement in accordance with G2's regular accounting practices. Said statements shall be provided to Artist within sixty (60) days of the end of each calendar quarter, even though royalty payments are semi-annual. Each statement shall become binding upon Artist and Artist shall neither have nor make any claim against G2 with respect to such statement, unless Artist shall advise G2, in writing, of the specific basis of such claim within one (1) year after the date G2 mails such statement. G2's accounting books and records will be kept and maintained in accordance with generally accepted accounting principles, consistently applied. 

7.03.     Artist shall not be entitled to recover damages or to terminate this Agreement for any reason because of a claimed breach by G2 of its material obligations hereunder, unless G2 has failed to remedy such breach within sixty (60) days following receipt of written notice thereof. Artist will not have the right to sue G2 in connection with any royalty accounting, or sue G2 for royalties accrued by Artist during the period a royalty accounting covers, unless Artist commences the suit within two (2) years after the date when the statement in question is rendered to Artist. If Artist commences suit on any controversy or claim concerning royalty accountings rendered to Artist under this Agreement, the scope of the proceeding will be limited to determination of the amount of royalties due for the accounting periods covered and reasonable attorney fees, and the court will have no authority to consider any other

 

 

issues or award any relief except recovery of any royalties found owing. Artist's recovery of any such royalties and attorney's fees will be the sole remedy available to Artist by reason of G2's royalty accountings. Without limiting the generality of the preceding sentence, Artist will not have any right to seek termination of this Agreement or avoid the performance of their obligations under it by reason of any such claim. Artist's remedy for G2's willful refusal to permit it to record its Minimum Recording Commitment shall be limited to termination of this Agreement. 

7.04.     G2 agrees that Artist may, not more than once during any calendar year, but only once with respect to any statement rendered hereunder, audit its books and records for the purpose of determining the accuracy of G2's statements to Artist. If Artist wishes to perform any such audit, Artist will be required to notify G2 at least thirty (30) days before the date when Artist plans to begin the audit. If Artist's audit has not been completed within one (1) month from the time Artist begins it, G2 may require Artist to terminate it on seven (7) days notice to Artist and G2 will not be required to permit Artist to continue the examination after the end of that seven (7) day period. Artist shall not be entitled to examine any manufacturing records or any other records which do not specifically report sales of Records or calculation of net receipts on which royalties are accruable hereunder. All audits shall be made during regular business hours, and shall be conducted on Artist's behalf by an independent Certified Public Accountant. Each examination shall be made at Artist's sole expense at G2's regular place of business in the United States, where the books and records are maintained. 

	 MECHANICAL LICENSES AND ROYALTIES

8.01.     All Controlled Compositions (defined as musical compositions composed in whole or in part by any individual member of Artist) are hereby licensed to G2 and its licenses for reproduction on Phonograph Records anywhere in the Universe. Royalties for the mechanical license herein granted shall be at a rate equal to seventy-five percent (75%) of the current minimum U.S. statutory rate (including the "long work" rate, if applicable) for royalty-bearing records sold and not returned and for which G2 is paid, excluding any instance where G2 and Artist are sharing income under Paragraph 6.01(e) above. In no event shall the mechanical royalties payable hereunder for any Album exceed ten (10) times the rate set forth above. The foregoing also applies to music videos, as well as to any instance where such a license must be executed in favor of G2, G2 shall not recoup from mechanical royalties due to Artist any advances payable to Artist except: (a) excess recording costs under Paragraph 4.01; (b) overpayments under Paragraph 701; and (c) any advances or cash or consigned materials (or the like) to Artist.

8.02.     If any record contains one or more compositions which are not Controlled Compositions, then G2 will have the right to reduce the amount of Mechanical Royalties payable on the Controlled Compositions by an amount equal to the amount of mechanical royalties payable on non-Controlled Compositions. 

 

 

	 TRADEMARKS

9.01.     Artist shall perform under the professional name, "Nick Brisco". Artist warrants and represents that it is the sole owner of such name in connections with Phonograph Records during the term hereof. Artist shall not use a different name in connection with Phonograph Records unless Artist and G2 mutually agree in writing. Artist agrees that G2 may cause a search to be instituted for the purpose of determining whether any professional name used by Artist has been or is being used by another person in connection with Phonograph Records. G2 may cause one or more federal applications for trademark protection to be made in favor of Artist for Phonograph Records and/or entertainment purposes. Any amounts up to One Thousand Seven Hundred Dollars ($1,700.00) expended by G2 pursuant to this Paragraph shall be deemed Advances hereunder. If the trademark search indicates that such name should not be used, G2 and Artist shall mutually agree on a substitute name for Artist. Nothing contained herein shall release Artist from its indemnification of G2 with respect to Artist's use of such name. 

	 FREE GOODS

10.01.     No royalties shall be payable with respect to records given away or furnished on a "no charge" basis to one-stops, rack jobbers, distributors, dealers, radio stations, television stations or film companies, theatrical hooking agencies, print media, music publishers or the like, provided that such records do not exceed one hundred (100) non-royalty bearing Singles out of every one thousand (1,000) Singles distributed and one hundred (100) non-royalty bearing Albums out of every one thousand (1,000) Albums. Any record sold for less than fifty percent (50%) of G2's published wholesale price will be a non-royalty bearing record.

10.02.  During each applicable contract period, G2 shall provide Artist with fifteen (15) non-royalty bearing copies of Artist's then current Album at no charge to the Artist. 

	CONTAINER COSTS

11.01.     G2's container deduction shall be a sum equal to: one dollar ($1.00) for singles, one dollar and fifty cents ($1.50) for LPs and cassettes, two dollars ($2.00) for double LP sets and compact discs, three dollars ($3.00) for double cassettes, and four dollars ($4.00) for other formats, including double compact disks, and all video formats.

	 INDEMNIFICATIONS

12.01.     Artist agrees to and does hereby indemnify, save and hold G2 and its licensees harmless of and from any and all liability, loss, damage, cost, or expense (including all legal expenses and reasonable attorney fees) arising out of or connected with any breach of this Agreement or any claim which is inconsistent with any of the warranties or representations made by Artist in this Agreement, and Artist agrees to reimburse G2 on demand for any payment made or incurred by G2 with respect to the foregoing if the claim concerned is settled or has resulted in a final

 

 

judgment against G2 or its licensees. Pending the determination of any claim with respect to which G2 is entitled to indemnity, G2 may withhold monies which would be otherwise payable to Artist up to the amount of its potential liability.

	 DEFAULT AND TERMINATION

13.01.     In the event of any default or breach by Artist in the performance of any of Artist's obligations hereunder, G2 may, without prejudice to its other rights, claims or remedies, suspend its obligations hereunder for the duration of such default or breach and until the same has been cured and may, at its option, extend the Term for a period equal to all or any part of the period of such default or breach, and in such event the dates for the exercise by G2 of the Option Periods hereunder and the dates of commencement of each subsequent Option Period shall be extended accordingly. 

	 FORCE MAJEAUR

14.01.     If G2's material performance hereunder is delayed or becomes impossible or impractical because of any act of God, fire, earthquake, strike, act of government or any order, regulation, ruling, or action of any labor union or association of artist affecting G2 or Artist or the phonograph record industry, G2, upon notice to Artist may suspend its obligations under this Agreement for a period not to exceed one (1) year, and in such event the number of days equal to the number of days of such suspension shall be added to the then-current period of the Term thereof. In the event that G2's material performance hereunder is delayed or becomes impossible or impractical because of any civil strife, G2, upon notice to Artist, may suspend its obligations under this Agreement for the duration of such delay, impossibility or impracticability and in such event the number of days equal to the number of days of such suspension shall be added to the then-current period of the Term thereof.

	MERCHANDISING

15.01.     Artist hereby grants G2 the exclusive right to manufacture, sell, license, distribute and exploit, through the Universe and by mail-order and through retail sources of, without limitation, all merchandise or every kind featuring the Artist (name/logo/likeness), during the term of this Agreement.

15.02.     It is expressly agreed and understood that any contract for the purpose of merchandising Artist entered into by G2 during the Term shall continue in full force and effect in accordance with the provisions thereof for a period not to exceed one (1) year following the expiration of the term of this Agreement.

15.03.     In the case of such products or property manufactured and sole by G2 or by any associated company, Artist shall be entitled to a royalty of twenty percent (20%) of the adjusted gross receipts therefrom. As used in this paragraph, the term "adjusted gross" shall mean gross revenues from the sale of applicable merchandise, less venue commissions and state sales tax where collected and actually paid. In the event that G2 licenses to other any of its rights under this clause then Artist shall received fifty percent (50%) of the net receipts therefrom. As used in this

 

 

paragraph, the term "net receipts" shall be calculated as gross revenues from the sale of the applicable merchandise, less the cost actually incurred and paid by G2 or its licensing company for manufacturing; sales personnel salaries and/or commissions, venue commissions and state sales tax where collected and actually paid.

15.04.     Artist has the right of approval of all merchandising artwork, so long as said approval is that unreasonably withheld. During the Term of this Agreement, Artist shall cause the inclusion of G2's logo and proper name at a reasonable size and position on all merchandise.

15.05      No royalties shall be payable with respect to merchandise given away or furnished on a no-charge basis. Upon Artist's request, G2 shall provide Artist with twenty (20) non-royalty-bearing samples of each item of merchandise at no charge.

	ARTWORK

16.01.     Artist agrees that G2 is the owner of any and all artwork, LP jacket art, and promotional artistic renderings undertaken or completed within the Option Terms of this Agreement. Artist shall have the right to use artwork which has been mutually approved by G2 and Artist for the purpose of Merchandising.

	NOTICES

17.01.      All notices, demands or the like which are required to be given hereunder shall be in writing and may be served upon the other party personally by Registered Mail, Return Receipt Requested or by telecopy (facsimile). Notice to Artist will be received by: ______________________________________________________________________________________

______________________________________________________________________________________

and notice to G2 will be received by: Gust Kepler, G2 Ventures, Inc., 14110 N. Dallas Parkway, Suite 365, Dallas, TX 75254.

	PROMOTIONS AND ADVERTISING CAMPAIGNS

18.01.     Any promotional monies spent by G2 on behalf of Artist are fifty percent (50%) recoupable from monies otherwise due to Artist from G2, excluding Mechanical Royalties, notwithstanding the source. Any promotional monies spent on behalf of Artist in combination with other G2 Artist shall be recoupable from Artist on a pro-rata basis.

18.02.     G2 is not obligated to produce a promotional video for Artist, but if G2 undertakes to produce said video, the cost is fifty percent (50%) recoupable from royalties, excluding Mechanical Royalties, notwithstanding the source. The cost of producing nonpromotional videos intended for resale are fully recoupable.

 

 

	CONTROLLING LAW

19.01.     This Agreement is entered into and performable in Dallas County, Texas and the validity, interpretation and legal effect of this agreement shall be governed by Texas law. Venue for any legal action shall be in Dallas County, Texas. 

	REMEDIES

20.01.     Artist acknowledges, recognizes and agrees that his services hereunder are of a special, unique, unusual, extraordinary and intellectual character which gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated for by damages in an action of law. Inasmuch as a breach of such services will cause G2 irreparable damages, G2 shall be entitled to injunctive and other equitable relief, in addition to whatever legal remedies are available, to prevent or cure any such breach or threatened breach.

	HEADINGS

21.02.     The headings of the clauses herein are intended for convenience only, and shall not be of any effect in construing the contents of this Agreement.

	 RELATIONSHIP

22.01.     Artist has the status of an independent contractor and nothing herein contained shall contemplate or constitute Artist of its members as G2's agents or employees. This Agreement does not and shall not be construed to create a partnership or joint venture between the parties to this Agreement.

	 VALIDITY AND MODIFICATIONS

23.01.     The invalidity or unenforceability of any provision shall not affect the validity or enforceability of any other provision. This Agreement contains the entire understanding of the parties relating to its subject matter. No change of this Agreement will be binding unless signed by all parties hereto or their duly authorized representatives. A waiver by either party of any provision of this Agreement in any instance shall not be deemed to waive it for the future. All remedies, rights, undertakings and obligations contained in this Agreement shall be cumulative and none of them shall limit any other remedy, right, undertaking or obligation.

	 ASSIGNMENT

24.01.     G2 may assign its rights under this Agreement in whole or in part.

 

 

	LEGAL REPRESENTATION

25.01.     Artist, by their signature hereto, confirms that G2 has advised Artist to take independent legal counsel, from a lawyer specializing generally in the music business and specifically in the negotiation of recording agreements, on the terms and conditions of this Agreement and on the obligations being undertaken by Artist in executing the Agreement.

	 COOPERATION

26.01.     Artist shall execute such other documentation and shall give further assurances as may reasonably be necessary or desirable for the purpose of vesting, confirming, protecting or further assuring any of the rights granted herein.

	 DISCLAIMER

27.01.     G2 has not made and does not hereby make any representation or warranty with respect to the extent of the sales of records or the exploitation of the music videos hereunder.

SIGNED THIS 7th DAY OF February, 2005.

	
G2 VENTURES, INC.

	 
	
By:
	
/s/ Gust Kepler

	 	
Gust Kepler, President

	 
	
14110 North Dallas Parkway

	
Suite 365

	
Dallas, TX 75254

	 
	
ARTIST:

	 
	
P/k/a:
	
____________________________

	 
	 
	
By:
	
/s/ Nick Brisco

	
Printed Name: Nick Brisco

	
SSN: 
	
***-**-**** (intentionally ommitted)

	 
	 
	 
	
Artist Address:
	
34-51 42nd St. 

	 	
Astoria, NY   11101<PAGE>

                                                                     EXHIBIT 4.1

                                 ACCESSITY CORP.

                             2004 STOCK OPTION PLAN

         1. PURPOSE OF THE PLAN. The purpose of this 2004 Stock Option Plan (the
"Plan") of Accessity Corp., a Delaware corporation (the "Company"), is to
provide the Company with a means of attracting and retaining the services of
highly motivated and qualified directors and key personnel. The Plan is intended
to advance the interests of the Company by affording to directors and key
employees, upon whose skill, judgment, initiative and efforts the Company is
largely dependent for the successful conduct of its business, an opportunity for
investment in the Company and the incentives inherent in stock ownership in the
Company. In addition, the Plan contemplates the opportunity for investment in
the Company by consultants that do business with the Company. For purposes of
this Plan, the term Company shall include subsidiaries, if any, of the Company.

         2. LEGAL COMPLIANCE. It is the intent of the Plan that all options
granted under it ("Options") shall be either "Incentive Stock Options" ("ISOs"),
as such term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), or non-qualified stock options ("NQOs"); provided, however,
that ISOs shall be granted only to employees of the Company. An Option shall be
identified as an ISO or an NQO in writing in the document or documents
evidencing the grant of the Option. All Options that are not so identified as
ISOs are intended to be NQOs. In addition, the Plan provides for the grant of
NQOs to consultants that do business with the Company. It is the further intent
of the Plan that it conform in all respects with the requirements of Rule 16b-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended ("Rule 16b-3"). To the extent that any aspect of the Plan or
its administration shall at any time be viewed as inconsistent with the
requirements of Rule 16b-3 or, in connection with ISOs, the Code, such aspect
shall be deemed to be modified, deleted or otherwise changed as necessary to
ensure continued compliance with such provisions.

         3. ADMINISTRATION OF THE PLAN.

              3.1 PLAN COMMITTEE. The Plan shall be administered by a committee
("Committee"). The members of the Committee shall be appointed from time to time
by the Board of Directors of the Company ("Board") and shall consist of not less
than two nor more than five persons. Such persons shall be directors of the
Company. Notwithstanding the foregoing, the Board may act as the Committee at
any time or from time to time.

              3.2 GRANTS OF OPTIONS BY THE COMMITTEE. In accordance with the
provisions of the Plan, the Committee, by resolution, shall select those
eligible persons to whom Options shall be granted ("Optionees"); shall determine
the time or times at which each Option shall be granted, whether an Option is an
ISO or an NQO and the number of shares to be subject to each Option; and shall
fix the time and manner in which the Option may be exercised, the Option
exercise price, and the Option period. The Committee shall determine the form of
option agreement to evidence the foregoing terms and conditions of each Option,
which need not be identical, in the form provided for in SECTION 7. Such option
agreement may include such other provisions as the Committee may deem necessary
or desirable consistent with the Plan, the Code and Rule 16b-3.

                                       -1-

<PAGE>

              3.3 COMMITTEE PROCEDURES. The Committee from time to time may
adopt such rules and regulations for carrying out the purposes of the Plan as it
may deem proper and in the best interests of the Company. The Committee shall
keep minutes of its meetings and records of its actions. A majority of the
members of the Committee shall constitute a quorum for the transaction of any
business by the Committee. The Committee may act at any time by an affirmative
vote of a majority of those members voting. Such vote may be taken at a meeting
(which may be conducted in person or by any telecommunication medium) or by
unanimous written consent of Committee members without a meeting.

              3.4 FINALITY OF COMMITTEE ACTION. The Committee shall resolve all
questions arising under the Plan and option agreements entered into pursuant to
the Plan. Each determination, interpretation, or other action made or taken by
the Committee shall be final and conclusive and binding on all persons,
including, without limitation, the Company, its stockholders, the Committee and
each of the members of the Committee, and the directors, officers and employees
of the Company, including Optionees and their respective successors in interest.

              3.5 NON-LIABILITY OF COMMITTEE MEMBERS. No Committee member shall
be liable for any action or determination made by him or her in good faith with
respect to the Plan or any Option granted under it.

         4. BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN. The Board may,
from time to time, make such changes in or additions to the Plan as it may deem
proper and in the best interests of the Company and its stockholders. The Board
may also suspend or terminate the Plan at any time, without notice, and in its
sole discretion. Notwithstanding the foregoing, no such change, addition,
suspension, or termination by the Board shall (i) materially impair any option
previously granted under the Plan without the express written consent of the
optionee; or (ii) increase the number of shares subject to the Plan, materially
increase the benefits accruing to optionees under the Plan, materially modify
the requirements as to eligibility to participate in the Plan or alter the
method of determining the option exercise price described in Section 8, without
stockholder approval.

         5. SHARES SUBJECT TO THE PLAN. For purposes of the Plan, the Committee
is authorized to grant Options for up to ______ shares of the Company's common
stock ("Common Stock"), or the number and kind of shares of stock or other
securities which, in accordance with SECTION 13, shall be substituted for such
shares of Common Stock or to which such shares shall be adjusted. The Committee
is authorized to grant Options under the Plan with respect to such shares. Any
or all unsold shares subject to an Option which for any reason expires or
otherwise terminates (excluding shares returned to the Company in payment of the
exercise price for additional shares) may again be made subject to grant under
the Plan.

         6. OPTIONEES. Options shall be granted only to officers, directors or
key employees of the Company or consultants that do business with the Company
designated by the Committee from time to time as Optionees. Any Optionee may
hold more than one option to purchase Common Stock, whether such option is an
Option held pursuant to the Plan or otherwise. An Optionee who is an employee of
the Company ("Employee Optionee") and who holds an Option must remain a
continuous full or part-time employee of the Company from the time of grant of
the Option to him until the time of its exercise, except as provided in SECTION
10.3.

                                       -2-

<PAGE>

         7. GRANTS OF OPTIONS. The Committee shall have the sole discretion to
grant Options under the Plan and to determine whether any Option shall be an ISO
or an NQO. The terms and conditions of Options granted under the Plan may differ
from one another as the Committee, in its absolute discretion, shall determine
as long as all Options granted under the Plan satisfy the requirements of the
Plan. Upon determination by the Committee that an Option is to be granted to an
Optionee, a written option agreement evidencing such Option shall be given to
the Optionee, specifying the number of shares subject to the Option, the Option
exercise price, whether the Option is an ISO or an NQO, and the other individual
terms and conditions of such Option. Such option agreement may incorporate
generally applicable provisions from the Plan, a copy of which shall be provided
to all Optionees at the time of their initial grants under the Plan. The Option
shall be deemed granted as of the date specified in the grant resolution of the
Committee, and the option agreement shall be dated as of the date specified in
such resolution. Notwithstanding the foregoing, unless the Committee consists
solely of non-employee directors, any Option granted to an executive officer,
director or 10% beneficial owner for purposes of Section 16 of the Securities
Exchange Act of 1934, as amended ("Section 16 of the 1934 Act"), shall either be
(a) conditioned upon the Optionee's agreement not to sell the shares of Common
Stock underlying the Option for at least six months after the date of grant or
(b) approved by the entire Board or by the stockholders of the Company.

         8. OPTION EXERCISE PRICE. The price per share to be paid by the
Optionee at the time an ISO is exercised shall not be less than 100% of the Fair
Market Value (as hereinafter defined) of one share of the optioned Common Stock
on the date as of which the Option is granted. No ISO may be granted under the
Plan to any person who, at the time of such grant, owns (within the meaning of
Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any parent thereof,
unless the exercise price of such ISO is at least equal to 110% of Fair Market
Value on the date of grant. The price per share to be paid by the Optionee at
the time an NQO is exercised shall not be less than 85% of the Fair Market Value
on the date as of which the NQO is granted, as determined by the Committee. For
purposes of the Plan, the "Fair Market Value" of a share of the Company's Common
Stock as of a given date shall be:

              (a) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, or if
the Common Stock is traded on the OTC Bulletin Board(R) or its successor, the
Fair Market Value shall be the closing sale price for such stock (or the closing
bid, if no sales were reported) as quoted on such exchange, system or board on
the day immediately preceding the given date, as reported in The Wall Street
Journal or such other source as the Committee deems reliable;

              (b) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the day immediately preceding the given date, as
reported in The Wall Street Journal or such other source as the Committee
reliable; or

                                       -3-

<PAGE>

              (c) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the Committee.

In addition, with respect to any ISO, the Fair Market Value on any given date
shall be determined in a manner consistent with any regulations issued by the
Secretary of the Treasury for the purpose of determining fair market value of
securities subject to an ISO plan under the Code.

         9. CEILING OF ISO GRANTS. The aggregate Fair Market Value (determined
at the time any ISO is granted) of the Common Stock with respect to which an
Optionee's ISOs, together with incentive stock options granted under any other
plan of the Company and any parent, are exercisable for the first time by such
Optionee during any calendar year shall not exceed $100,000. If an Optionee
holds such incentive stock options that become first exercisable (including as a
result of acceleration of exercisability under the Plan) in any one year for
shares having a Fair Market Value at the date of grant in excess of $100,000,
then the most recently granted of such ISOs, to the extent that they are
exercisable for shares having an aggregate Fair Market Value in excess of such
limit, shall be deemed to be NQOs.

         10. DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.

              10.1 OPTION PERIOD. The option period shall be determined by the
Committee with respect to each Option granted. In no event, however, may the
option period exceed ten years from the date on which the Option is granted, or
five years in the case of a grant of an ISO to an Optionee who is a 10%
stockholder at the date as of which the Option is granted as described in
SECTION 8.

              10.2 EXERCISABILITY OF OPTIONS. Each Option shall be exercisable
in whole or in consecutive installments, cumulative or otherwise, during its
term as determined in the discretion of the Committee; provided, however, that
each Option granted to an Optionee who is not an officer, director or consultant
of the Company or a Company affiliate shall provide for the right to exercise at
the rate of at least 20% per year over five years from the date the Option is
granted, subject to reasonable conditions such as continued employment.

              10.3 TERMINATION OF OPTIONS DUE TO TERMINATION OF EMPLOYMENT,
DISABILITY, OR DEATH OF OPTIONEE; TERMINATION FOR "CAUSE," OR RESIGNATION IN
VIOLATION OF AN EMPLOYMENT AGREEMENT. All Options granted under the Plan to any
Employee Optionee shall terminate and may no longer be exercised if the Employee
Optionee ceases, at any time during the period between the grant of the Option
and its exercise, to be an employee of the Company; provided, however, that the
Committee may alter the termination date of the Option if the Optionee transfers
to an affiliate of the Company. Notwithstanding the foregoing, (i) if the
Employee Optionee's employment with the Company shall have terminated for any
reason (other than involuntary dismissal for "cause" or voluntary resignation in
violation of any agreement to remain in the employ of the Company, including,
without limitation, any such agreement pursuant to SECTION 14), he may, at any
time before the expiration of three months after such termination or before

                                       -4-

<PAGE>

expiration of the Option, whichever shall first occur, exercise the Option (to
the extent that the Option was exercisable by him on the date of the termination
of his employment); (ii) if the Employee Optionee's employment shall have
terminated due to disability (as defined in Section 22(e)(3) of the Code and
subject to such proof of disability as the Committee may require), such Option
may be exercised by the Employee Optionee (or by his guardian(s), or
conservator(s), or other legal representative(s)) before the expiration of
twelve months after such termination or before expiration of the Option,
whichever shall first occur (to the extent that the Option was exercisable by
him on the date of the termination of his employment); (iii) in the event of the
death of the Employee Optionee, an Option exercisable by him at the date of his
death shall be exercisable by his legal representative(s), legatee(s), or
heir(s), or by his beneficiary or beneficiaries so designated by him, as the
case may be, within twelve (12) months after his death or before the expiration
of the Option, whichever shall first occur (to the extent that the Option was
exercisable by him on the date of his death); and (iv) if the Employee
Optionee's employment is terminated for "cause" or in violation of any agreement
to remain in the employ of the Company, including, without limitation, any such
agreement pursuant to SECTION 14, his Option shall terminate immediately upon
termination of employment, and such Option shall be deemed to have been
forfeited by the Optionee. For purposes of the Plan, "cause" may include,
without limitation, any illegal or improper conduct (1) which injures or impairs
the reputation, goodwill, or business of the Company; or (2) which involves the
misappropriation of funds of the Company, or the misuse of data, information, or
documents acquired in connection with employment by the Company that results in
material harm to the Company. A termination for cause may also include any
resignation in anticipation of discharge for cause or resignation accepted by
the Company in lieu of a formal discharge for cause.

         11. MANNER OF OPTION EXERCISE; RIGHTS AND OBLIGATIONS OF
OPTIONEES.

              11.1 WRITTEN NOTICE OF EXERCISE. An Optionee may elect to exercise
an Option in whole or in part, from time to time, subject to the terms and
conditions contained in the Plan and in the agreement evidencing such Option, by
giving written notice of exercise to the Company at its principal executive
office.

              11.2 CASH PAYMENT FOR OPTIONED SHARES. If an Option is exercised
for cash, such notice shall be accompanied by a cashier's or personal check, or
money order, made payable to the Company for the full exercise price of the
shares purchased.

              11.3 STOCK SWAP FEATURE. At the time of the Option exercise, and
subject to the discretion of the Committee to accept payment in cash only, the
Optionee may determine whether the total purchase price of the shares to be
purchased shall be paid solely in cash or by transfer from the Optionee to the
Company of previously acquired shares of Common Stock, or by a combination
thereof. If the Optionee elects to pay the total purchase price in whole or in
part with previously acquired shares of Common Stock, the value of such shares
shall be equal to their Fair Market Value on the date of exercise, determined by
the Committee in the same manner used for determining Fair Market Value at the
time of grant for purposes of Section 8.

              11.4 INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND
LEGALITY OF ISSUANCE. The receipt of shares of Common Stock upon the exercise of
an Option shall be conditioned upon the Optionee (or any other person who
exercises the Option on his or her behalf as permitted by SECTION 10.3)
providing to the Committee a written representation that, at the time of such
exercise, it is the intent of such person(s) to acquire the shares for
investment only and not with a view toward distribution. The certificate for

                                       -5-

<PAGE>

unregistered shares issued for investment shall be restricted by the Company as
to transfer unless the Company receives an opinion of counsel satisfactory to
the Company to the effect that such restriction is not necessary under then
pertaining law. The providing of such representation and such restrictions on
transfer shall not, however, be required upon any person's receipt of shares of
Common Stock under the Plan in the event that, at the time of grant of the
Option relating to such receipt or upon such receipt, whichever is the
appropriate measure under applicable federal or state securities laws, the
shares subject to the Option shall be (i) covered by an effective and current
registration statement under the Securities Act of 1933, as amended, and (ii)
either qualified or exempt from qualification under applicable state securities
laws. The Company shall, however, under no circumstances be required to sell or
issue any shares under the Plan if, in the opinion of the Committee, (i) the
issuance of such shares would constitute a violation by the Optionee or the
Company of any applicable law or regulation of any governmental authority, or
(ii) the consent or approval of any governmental body is necessary or desirable
as a condition of, or in connection with, the issuance of such shares.

              11.5 STOCKHOLDER RIGHTS OF OPTIONEE. Upon exercise, the Optionee
(or any other person who exercises the Option on his behalf as permitted by
Section 10.3) shall be recorded on the books of the Company as the owner of the
shares, and the Company shall deliver to such record owner one or more duly
issued stock certificates evidencing such ownership. No person shall have any
rights as a stockholder with respect to any shares of Common Stock covered by an
Option granted pursuant to the Plan until such person shall have become the
holder of record of such shares. Except as provided in Section 13, no
adjustments shall be made for cash dividends or other distributions or other
rights as to which there is a record date preceding the date such person becomes
the holder of record of such shares.

              11.6 HOLDING PERIODS FOR TAX PURPOSES. The Plan does not provide
that an Optionee must hold shares of Common Stock acquired under the Plan for
any minimum period of time. Optionees are urged to consult with their own tax
advisors with respect to the tax consequences to them of their individual
participation in the Plan.

         12. SUCCESSIVE GRANTS. Successive grants of Options may be made to any
Optionee under the Plan.

         13. ADJUSTMENTS.

              (a) If the outstanding Common Stock shall be hereafter increased
or decreased, or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation, by reason
of a recapitalization, reclassification, reorganization, merger, consolidation,
share exchange, or other business combination in which the Company is the
surviving parent corporation, stock split-up, combination of shares, or dividend
or other distribution payable in capital stock or rights to acquire capital
stock, appropriate adjustment shall be made by the Committee in the number and
kind of shares for which options may be granted under the Plan. In addition, the
Committee shall make appropriate adjustment in the number and kind of shares as
to which outstanding and unexercised options shall be exercisable, to the end
that the proportionate interest of the holder of the option shall, to the extent
practicable, be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change in the total
price applicable to the unexercised portion of the option but with a
corresponding adjustment in the exercise price per share.

                                       -6-

<PAGE>

              (b) In the event of the dissolution or liquidation of the Company,
any outstanding and unexercised options shall terminate as of a future date to
be fixed by the Committee.

              (c) In the event of a Reorganization (as hereinafter defined),
then,

                   (i) If there is no plan or agreement with respect to the
Reorganization ("Reorganization Agreement"), or if the Reorganization Agreement
does not specifically provide for the adjustment, change, conversion, or
exchange of the outstanding and unexercised options for cash or other property
or securities of another corporation, then any outstanding and unexercised
options shall terminate as of a future date to be fixed by the Committee; or

                   (ii) If there is a Reorganization Agreement, and the
Reorganization Agreement specifically provides for the adjustment, change,
conversion, or exchange of the outstanding and unexercised options for cash or
other property or securities of another corporation, then the Committee shall
adjust the shares under such outstanding and unexercised options, and shall
adjust the shares remaining under the Plan which are then available for the
issuance of options under the Plan if the Reorganization Agreement makes
specific provisions therefor, in a manner not inconsistent with the provisions
of the Reorganization Agreement for the adjustment, change, conversion, or
exchange of such options and shares.

              (d) The term "Reorganization" as used in this Section 13 shall
mean any reorganization, merger, consolidation, share exchange, or other
business combination pursuant to which the Company is not the surviving parent
corporation after the effective date of the Reorganization, or any sale or lease
of all or substantially all of the assets of the Company. Nothing herein shall
require the Company to adopt a Reorganization Agreement, or to make provision
for the adjustment, change, conversion, or exchange of any options, or the
shares subject thereto, in any Reorganization Agreement which it does adopt.

              (e) The Committee shall provide to each optionee then holding an
outstanding and unexercised option not less than 30 calendar days' advanced
written notice of any date fixed by the Committee pursuant to this SECTION 13
and of the terms of any Reorganization Agreement providing for the adjustment,
change, conversion, or exchange of outstanding and unexercised options. Except
as the Committee may otherwise provide, each optionee shall have the right
during such period to exercise his option only to the extent that the option was
exercisable on the date such notice was provided to the optionee.

                  Any adjustment to any outstanding ISO pursuant to this
SECTION 13, if made by reason of a transaction described in Section 424(a) of
the Code, shall be made so as to conform to the requirements of that Section and
the regulations thereunder. If any other transaction described in Section 424(a)
of the Code affects the Common Stock subject to any unexercised ISO theretofore
granted under the Plan (hereinafter for purposes of this SECTION 13 referred to
as the "old option"), the Board of Directors of the Company or of any surviving

                                       -7-

<PAGE>

or acquiring corporation may take such action as it deems appropriate, in
conformity with the requirements of that Code Section and the regulations
thereunder, to substitute a new option for the old option, in order to make the
new option, as nearly as may be practicable, equivalent to the old option, or to
assume the old option.

              (f) No modification, extension, renewal, or other change in any
option granted under the Plan may be made, after the grant of such option,
without the optionee's consent, unless the same is permitted by the provisions
of the Plan and the option agreement. In the case of an ISO, optionees are
hereby advised that certain changes may disqualify the ISO from being considered
as such under Section 422 of the Code, or constitute a modification, extension,
or renewal of the ISO under Section 424(h) of the Code.

              (g) All adjustments and determinations under this SECTION 13 shall
be made by the Committee in good faith in its sole discretion.

         14. CONTINUED EMPLOYMENT. As determined in the sole discretion of the
Committee at the time of grant and if so stated in a writing signed by the
Company, each Option may have as a condition the requirement of an Employee
Optionee to remain in the employ of the Company, or of its affiliates, and to
render to it his or her exclusive service, at such compensation as may be
determined from time to time by it, for a period not to exceed the term of the
Option, except for earlier termination of employment by or with the express
written consent of the Company or on account of disability or death. The failure
of any Employee Optionee to abide by such agreement as to any Option under the
Plan may result in the termination of all of his or her then outstanding Options
granted pursuant to the Plan. Neither the creation of the Plan nor the granting
of Option(s) under it shall be deemed to create a right in an Employee Optionee
to continued employment with the Company, and each such Employee Optionee shall
be and shall remain subject to discharge by the Company as though the Plan had
never come into existence.

         15. TAX WITHHOLDING. The exercise of any Option granted under the Plan
is subject to the condition that if at any time the Company shall determine, in
its discretion, that the satisfaction of withholding tax or other withholding
liabilities under any federal, state or local law is necessary or desirable as a
condition of, or in connection with, such exercise or a later lapsing of time or
restrictions on or disposition of the shares of Common Stock received upon such
exercise, then in such event, the exercise of the Option shall not be effective
unless such withholding shall have been effected or obtained in a manner
acceptable to the Company. When an Optionee is required to pay to the Company an
amount required to be withheld under applicable income tax laws in connection
with the exercise of any Option, the Optionee may, subject to the approval of
the Committee, which approval shall not have been disapproved at any time after
the election is made, satisfy the obligation, in whole or in part, by electing
to have the Company withhold shares of Common Stock having a value equal to the
amount required to be withheld. The value of the Common Stock withheld pursuant
to the election shall be determined by the Committee, in accordance with the
criteria set forth in SECTION 8, with reference to the date the amount of tax to
be withheld is determined. The Optionee shall pay to the Company in cash any
amount required to be withheld that would otherwise result in the withholding of
a fractional share. The election by an Optionee who is an officer of the Company
within the meaning of Section 16 of the 1934 Act, to be effective, must meet all
of the requirements of Section 16 of the 1934 Act.

                                      -8-

<PAGE>

         16. TERM OF PLAN.

              16.1 EFFECTIVE DATE. Subject to stockholder approval, the Plan was
adopted by the Board as of ________, 2004. The Board intends to obtain
stockholder approval for the Plan as soon as practicable.

              16.2 TERMINATION DATE. Except as to options granted and
outstanding under the Plan prior to such time, the Plan shall terminate at
midnight on _____, 2014, and no Option shall be granted after that time. Options
then outstanding may continue to be exercised in accordance with their terms.
The Plan may be suspended or terminated at any earlier time by the Board within
the limitations set forth in SECTION 4.

         17. NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to amend, modify, or rescind any previously approved compensation
plans, programs or options entered into by the Company. This Plan shall be
construed to be in addition to and independent of any and all such other
arrangements. Neither the adoption of the Plan by the Board nor the submission
of the Plan to the stockholders of the Company for approval shall be construed
as creating any limitations on the power or authority of the Board to adopt,
with or without stockholder approval, such additional or other compensation
arrangements as the Board may from time to time deem desirable.

         18. GOVERNING LAW. The Plan and all rights and obligations under it
shall be construed and enforced in accordance with the laws of the State of
California.

         19. INFORMATION TO OPTIONEES. Optionees under the Plan who do not
otherwise have access to financial statements of the Company will receive the
Company's financial statements at least annually.

         20. TRANSFERABILITY OF OPTIONS. Options granted under the Plan are
nontransferable other than by will, by the laws of descent and distribution, by
instrument to an inter vivos or testamentary trust in which the Options are to
be passed to beneficiaries upon the death of the trustor (settlor), or by gift
to immediate family. The term "immediate family" means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, and
also includes adoptive relationships.

                                      -9-

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