Document:

Exhibit
10.1

 

PURCHASE AND SALE AGREEMENT

 

THIS AGREEMENT is made and entered into this 27th day of
September, 2004, by and between Bremerton
School District No. 100-C (the “Seller”) and eAcceleration Corp, a Delaware Corporation,
(the “Purchaser”).

 

A. RECITALS

 

1.             Seller is the owner of the Property (as
defined below) located in Kitsap County, Washington.

 

2.             Seller desires to sell and Purchaser desires
to purchase the Property upon the terms and conditions hereinafter set forth.

 

B. AGREEMENT

 

NOW, THEREFORE, based upon the mutual considerations set forth herein, Seller and
Purchaser agree as follows:

 

1.             Definitions. For purposes of this Agreement:

 

“Agreement” means this Agreement and all Exhibits and Schedules
thereto.

 

“Closing”
and the “Closing Date” have the respective meanings assigned thereto in Section
6.1 hereof;

 

“Permitted Exceptions” has the meaning assigned thereto in Section 7.3
hereof;

 

“Purchase Price” has the meaning assigned thereto in Section 3.1
hereof;

 

“Property”
means the real property generally depicted on the map attached as Exhibit “A”
hereto, which the parties agree shall be surveyed for a definitive legal
description pursuant to Section 18 herein.

 

“Title Company” shall be Land Title Company of Kitsap County; and 

 

“Title Policy” has the meaning ascribed thereto in Section 11.5 hereof.

 

2.             Contract of Sale.   On
the Closing Date, Seller shall sell the Property to Purchaser and Purchaser
shall purchase the Property from Seller, at the price and upon the terms and
conditions set forth in this Agreement.

 

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3.             Purchase Price; Payment
Terms.

 

3.1           Purchase Price. The purchase price (the “Purchase Price”)
to be paid for the Property shall be Eight Hundred Fifty Thousand and 00/100
Dollars ($850,000.00).

 

3.2           Payment
Terms. Purchaser shall pay
the entire purchase price in cash at Closing.

 

4.             Approval Contingencies.

 

4.1           Purchaser’s obligation to close under this Agreement is contingent upon
(a) Purchaser’s acceptance of the Property for Purchaser’s intended use;
including but not limited to structural condition, architectural compatibility
and zoning, (b) Purchaser obtaining a commitment for financing the purchase of
the Property under such terms as Purchaser deems satisfactory, and (c)
Purchaser obtaining an appraisal of the Property showing the fair market value
of the Property being equal to or greater than the Purchase Price. Purchaser
shall have until 5:00 p.m. on the 60th day following the date on which both
Seller and Purchaser have executed this Agreement (the “Contingency Date”) to
satisfy or waive the contingencies set forth under this Section 4.1 and to give
Seller notice that such contingencies have been satisfied or waived. If
Purchaser does not give Seller such notice on or before the Contingency Date,
then this Agreement shall automatically terminate and both parties shall be
relieved of and released from any and all further liability hereunder. Any
tests, studies, applications or steps undertaken by Purchaser under this Section
shall be at Purchaser’s sole cost and expense.

 

4.2           Seller’s obligation to close shall be contingent upon Seller obtaining
approval from Seller’s Board of Directors and compliance with the requirements
of RCW Chapter 28A.335. Seller shall have until 5:00 p.m. on the Contingency
Date to satisfy the contingencies set forth in this Section 4.2. If Seller is
not able to satisfy the contingencies set forth in this Section 4.2, then this
Agreement shall automatically terminate and both parties shall be relieved of
and released from any and all further liability hereunder.

 

4.3           Approval of Special Use Permit.  
Purchaser’s obligation to close as to the Property is further contingent
upon Purchaser, at its own cost and expense, obtaining approval from the City of
Bremerton and all other governmental entities with jurisdiction over the
Property, for a Special Use Permit and associated plans for the Property on
terms and conditions suitable to Purchaser in its sole discretion, so that the
Purchaser shall be able to proceed with using the Property for its intended
business purpose. Purchaser shall be responsible for preparation of
applications for the Special Use Permit and other documents as may be required
by the City of Bremerton and other governmental agencies with jurisdiction over
the Property.

 

5.             Earnest Money. 
Purchaser shall provide Ten Thousand and No/100 Dollars ($10,000) as
earnest money. Earnest money shall be applied against the Purchase Price at
Closing. Earnest money shall be refundable to Purchaser up to but not after the
Contingency Date. After the Contingency Date the earnest money shall be
non-refundable if Purchaser fails to close without legal excuse and shall in
such case be awarded to the Seller.

 

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6.             Closing; Deliveries at Closing.

 

6.1           Time and Place. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place within thirty
(30) days after the issuance of a Special Use Permit by the City of Bremerton,
subject to the provisions of Paragraph 4.3 of this Agreement. If Closing does
not occur within the time requirements set forth in this paragraph, this
Agreement and all rights and obligations of the parties hereto shall
automatically terminate, without notice. 
Closing shall take place through an escrow at the offices of the Title
Company (the “Closer”).

 

6.2           Seller’s Deliveries at Closing.   At
Closing, Seller shall deliver to Purchaser the following items:

 

(a)           a statutory warranty deed complying with RCW 64.04.030, conveying the
Property free and clear except for  the
Permitted Exceptions; and

 

(b)           any necessary resolutions or authorizations of Seller authorizing the
sale of the Property to Purchaser and the execution and delivery of the deed
and all other documents and instruments to be executed by Seller pursuant to
this Agreement.

 

6.3           Purchaser’s Deliveries at Closing.   At
Closing, Purchaser shall deliver to Seller the Purchase Price and any documents
required by this Agreement to be delivered by Purchaser.

 

6.4                           Possession. Purchaser shall be entitled to possession of the Property at Closing.

 

6.5           Prorations.  At Closing the following
items shall be prorated between the Seller and Purchaser as of 12:01 a.m. on
the date of Closing, and the Purchase Price shall be adjusted accordingly:

 

(a)           real estate taxes; and

 

(b)           charges for water, sewer, gas, electricity
and other utility services and cable television services, if any, on the basis
of the fiscal period for which assessed or charged, except that if any of such
utility services are metered, apportionment at Closing shall be based on the
last available reading, subject to adjustment after Closing when the next
reading is available;

 

6.6           Closing Costs. 
Seller shall pay the real estate excise tax applicable to the sale of
the Property and recording fee for the conveyance of title to Purchaser, the
premium for the Title Policy and one-half of the escrow fees. Purchaser shall
pay one-half of the escrow fees. Each party shall pay for its own attorneys’
fees.

 

7.             Title Examination.

 

7.1           Title Report. As soon as possible, and in any event
within fourteen (14) calendar days after this Agreement has been executed by
both Seller and Purchaser, Seller shall obtain from the Title Company a current
preliminary commitment for an ALTA standard coverage owner’s policy of title

 

3

 

insurance (the “Title Report”) covering the
Real Property (showing Seller as the owner of the Property) and a copy of all
instruments referred to in said Title Report. The Title Report and instruments
shall be delivered to Purchaser by Seller immediately upon receipt. In the
event Purchaser desires an ALTA Extended Coverage Policy, Purchaser shall be
responsible for ordering the same and for all costs incurred in excess of those
chargeable by the Title Company for a standard coverage owner’s policy.

 

7.2           Purchaser’s Review. Purchaser shall have twenty-one (21) days
(the “Review Period”) after its receipt of the Title Report to give notice to
Seller of its approval of any exceptions listed on the Title Report.   Exceptions specifically approved by
Purchaser shall be deemed to be Permitted Exceptions (as that term is defined
in Section 7.3). All exceptions as to which Purchaser does not give notice of approval
within the Review Period shall be deemed to have been rejected by Purchaser. If
Seller does not, within twenty-one (21) days after the expiration of the Review
Period, give notice to Purchaser that Seller shall prior to Closing remove all
exceptions rejected by Purchaser (exceptions evidencing or securing liquidated
obligations to pay money which Purchaser is entitled to remove at Closing
pursuant to Section 8.3 hereof), then this Agreement shall automatically
terminate.

 

7.3           Condition of Title at Closing. Seller shall convey and Purchaser shall
accept a good and marketable title in fee simple, free and dear of all liens
and encumbrances, easements, restrictions, conditions, covenants, rights,
rights-of-way, and other matters, subject only to the following (“Permitted
Exceptions”): (a) the rights and reservations expressed in the U.S. Patent to
the Land; (b) the lien of current real estate taxes not yet due and payable;
(c) usual and ordinary public utility easements for gas, electric, water,
sewer, cable television and other utility lines to the Buildings, except to the
extent Purchaser in its reasonable judgment determines such easements to be
inconsistent with the current use of the Property; (d) zoning regulations and
ordinances general to the district in which the Property is located which are
not violated by the existing structures or present use thereof; and (e) such
other title exceptions as may be approved by Purchaser in accordance with
Section 7.2.

 

8.              Seller’s Representations and
Warranties.    Seller represents and warrants to
Purchaser as follows:

 

8.1           Authority.   Subject only to the
limitation described in Section 4.2, the execution, delivery and performance of
this Agreement has been duly and validly authorized by all necessary action of
Seller and this Agreement is a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.

 

8.2           Compliance with Laws. Seller has no notice or knowledge that the
Property or its operation or use have failed to comply with any law, ordinance,
regulation or order.

 

8.3           Non-Foreign Person. Seller is not a “foreign person” as such
term is defined in Section 1445(f) of the Internal Revenue Code of 1986, as
amended.

 

9.              Seller’s Covenants.  
From and after the date of this Agreement and continuing through
Closing, Seller agrees with Purchaser as follows:

 

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9.1           Risk of Loss. Seller shall retain the risk of loss to the
Property by fire or other casualty until the deed of conveyance is delivered to
Purchaser.   If a loss occurs, Purchaser
may elect to proceed with Closing or terminate this Agreement.

 

9.2           Eminent Domain. If all or any part of the Property is
condemned or if condemnation proceedings are instituted, Purchaser may elect to
proceed with Closing without an adjustment in price, in which event Seller
shall assign to Purchaser all its rights to the condemnation proceeds,
including the sole right to settle or approve the settlement of any
condemnation award. Purchaser shall have twenty (20) days after notice of the
institution of condemnation proceedings to notify Seller as to whether
Purchaser elects to proceed with Closing. During such 20-day period, Seller
shall cooperate and use its best efforts to provide Purchaser with all
information reasonably necessary to evaluate the scope of the condemnation
proceedings.

 

10.           Purchaser’s Representations
and Warranties. As a
material inducement to Seller’s entering into this Agreement Purchaser
represents and warrants to Seller that the execution, delivery and performance
of this Agreement has been duly and validly authorized by all necessary action
of Purchaser and this Agreement is a valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, subject only to
Purchaser obtaining the approvals set forth in Section 4.1 herein.

 

11.           Conditions to Purchaser’s
Obligation to Close. In
addition to any contingencies listed in Section 5 above, the obligation of Purchaser to close hereunder
shall be subject to the satisfaction of the following conditions (all or any of
which may be waived, in whole or in part by Purchaser in writing):

 

11.1         Representations and Warranties True at
Closing. The representations
and warranties made by Seller in this Agreement shall be true in all material
respects as of Closing with the same force and effect as though such
representations and warranties had been made or given on and as of the date of
Closing.

 

11.2         Compliance with Agreement.  
Seller shall have performed and complied with all its obligations under
this Agreement which are to be performed or complied with by it prior to or at
Closing.

 

11.3         No Damage to Property. The physical condition of the Property
shall be in the same condition as on the date of this Agreement, ordinary wear
and tear and damage caused by Purchaser excepted.

 

11.4         Title. Title to the Land and Improvements shall be good and marketable in
fact and of record, subject only to the Permitted Exceptions.

 

11.5         Title Policy. The Title Company shall be irrevocably
committed to issue to Purchaser an ALTA standard coverage owner’s policy of
title insurance, with such reinsurance as Purchaser may

 

5

 

 

reasonably request, in an amount not less
than the Purchase Price, insuring Purchaser’s good, marketable and indefeasible
title to the Real Property in fee simple absolute, subject only to the
Permitted Exceptions and standard printed exceptions contained in the ALTA
standard coverage owner’s policy form (the “Title Policy”).

 

11.6        No Condemnation.
There shall be no pending or threatened condemnation or taking of any part of
the Real Property or any means of ingress or egress thereto, other than a minor
street widening, or other immaterial taking, which, in Purchaser’s judgment,
does not adversely affect the Real Property.

 

12.           Conditions to Seller’s
Obligation to Close.   In  addition
to the contingency set forth in Section 4.2 herein, the obligation of Seller to
close hereunder shall be subject to satisfaction of the following conditions
(all or any of which may be waived, in whole or in part, by Seller in writing):

 

12.1         Representations and Warranties True at
Closing. The representations
and warranties made by Purchaser in this Agreement shall be true in all material
respects as of Closing with the same force and effect as though such
representations and warranties had been made or given on and as of the date of
the closing.

 

12.2         Compliance with Agreement.  
Purchaser shall have performed and complied in all material respects
with all its obligations under this Agreement which are to be performed or
complied with by it prior to or at Closing.

 

13.           Broker.  
Seller represents to Purchaser that Seller has not retained a real
estate broker in connection with this transaction.   To the extent Purchaser has retained a real estate broker in
connection with this transaction, Purchaser acknowledges that Purchaser is
solely responsible for any payments and commission due as a result, and agrees
to indemnify, defend and hold Seller harmless from and against any claims of
commissions due from any real estate broker claiming to have represented
Purchaser in connection with this transaction.

 

14.           Failure of Seller or Purchaser to Perform.

 

14.1         Purchaser’s Remedies. If Seller defaults in the performance of
its obligation under this Agreement to sell the Property to Purchaser, then
Purchaser shall have the right to institute an action for specific performance
to enforce Seller’s obligation under this Agreement to convey title to the
Property and for incidental damages.

 

14.2         Seller’s Remedies. If Purchaser shall default in the
performance of its obligations under this Agreement without legal excuse,
Setter shall retain the earnest money set forth in Paragraph 5 as the sole and
exclusive remedy to Seller for said default. This provision is specifically
negotiated between the parties, and is stipulated to the liquidated damages
which shall bee awarded to the Seller for said default.

 

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15.           Termination.   This
Agreement may be terminated only under the express terms of this Agreement or
by the mutual written consent of the parties.  
In the event of such termination, all obligations of the parties to each
other shall terminate.

 

16.           Indemnification.   Seller and
Purchaser agree to indemnify each other and hold each other harmless against
and in respect of any loss, damage, liability, deficiency, cost or expense
(including reasonable attorneys’ fees), whether direct, contingent or consequential,
which Purchaser or Seller may sustain or incur as the result of any
misrepresentation, breach of warranty or non-fulfillment of any covenant or
agreement on the part of Seller or Purchaser under this Agreement.

 

17.           Miscellaneous Provisions.

 

17.1        Survival. The
representations, warranties, covenants, indemnities and other obligations of
Seller and Purchaser set forth in this Agreement, including the award of
attorneys’ fees set forth in paragraph 17.4, shall survive Closing and the
delivery of the deed by Seller.

 

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

 

17.3        Time of the Essence.
Time is of the essence of this Agreement.

 

17.4        Attorneys’ Fees.    In the event of a dispute arising out of
the interpretation or enforcement of this Agreement, the prevailing party shall
be entitled to reasonable attorneys’ fees.

 

17.5        Entire Agreement; Amendment. This Agreement sets forth the entire agreement of the parties as to
the subject matter hereof and supersedes all prior discussions and
understandings between them. This Agreement may not be amended or rescinded in
any manner except by an instrument in writing signed by a duly authorized
officer or representative of each party hereto.

 

17.6        Severability.  Should any of the provisions of this
Agreement be found to be invalid, illegal or unenforceable by any court of
competent jurisdiction, such provision shall be stricken and the remainder of
this Agreement shall nonetheless remain in full force and effect unless
striking such provision shall materially alter the intention of the parties.

 

17.7        Notices. All notices
or requests required or permitted under this Agreement shall be in writing;
shall be personally delivered or sent by certified mail, return receipt
requested, postage prepaid; shall be deemed given when so delivered or mailed,
irrespective of whether such notice or request is actually received by the addressee,
and shall be sent to the parties at the addresses set forth adjacent to their
signatures below. Either party may change the address to which notices shall be
sent by notice to the other party.

 

17.8        Successors and Assigns.   This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.   Purchaser shall have the

 

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absolute right to assign its rights and
responsibilities under this Agreement to any affiliate of Purchaser. The term
“Purchaser” as used in this Agreement shall be deemed to include the assignee
under any such permitted assignment.

 

17.9
       Governing Forum. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Washington.
Jurisdiction and exclusive venue shall be in Kitsap County Superior Court.

 

IN WITNESS  WHEREOF, the parties
hereto have executed this Agreement as of the date first above written.

 

 

	
  SELLER:

  	
  PURCHASER:

  
	
  BREMERTON SCHOOL DISTRICT

  	
  eACCELERATlON CORP, a Delaware

  
	
  NO. 100 C

  	
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By: 

  	
  /s/[ILLEGIBLE]

  	
   

  
	
   

  	
  Its: 

  	
  Superintendent

  	
   

  	
   

  	
  Its: 

  	
  President and CEO

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  134
  No. Marion St,

  	
   

  	
  Address:

  	
  1050
  NE Hostmark Street,

  	
   

  
	
   

  	
  Bremerton,
  WA 98312

  	
   

  	
   

  	
  Suite
  100-B

  	
   

  
	
   

  	
   

  	
  Pou1sbo,
  WA 98370

  	
   

  
												

 

8

 

EXHIBIT “A”

 

Lot 27, except the East 25 feet and Lot 28,
except the West 20 feet, in Tebbett’s

 

Decatur Acre Tracts, Kitsap County,
Washington.

 

9<PAGE>

                                                                    EXHIBIT 10.1

                        PROGENICS PHARMACEUTICALS, INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                                1,000,000 Shares

1.       PURPOSE

         The purpose of the Employee Stock Purchase Plan (the "Plan") of
Progenics Pharmaceuticals, Inc. (the "Company") is to attract, compensate and
retain well qualified employees by providing them with an equity interest in the
Company's success.

2.       STOCK SUBJECT TO THE PLAN

         The Company may issue and sell a total of 1,000,000 shares of its
common stock, par value $.0013 per share (the "Common Stock"), pursuant to the
Plan. Such shares may be either authorized but unissued shares or treasury
shares and may include shares that have been subject to unexercised options,
whether such options have terminated or expired by their terms, by cancellation
or otherwise.

3.       ADMINISTRATION

         The Plan shall be administered by a committee (the "Committee")
consisting of the entire Board of Directors of the Company or of two or more
non-employee directors thereof. The Committee shall have the power and authority
as may be necessary to carry out the provisions of the Plan, including the
interpretation and construction of the Plan and the option grants made under the
Plan, the adoption of such rules and regulations as it may deem advisable and
the termination of further option grants under the Plan.

4.       ELIGIBILITY

         Options under the Plan shall be granted only to employees of the
Company, all employees of the Company are eligible to receive option grants and
all employees granted options under the Plan shall have the same rights and
privileges. Notwithstanding the foregoing, (i) no employee shall be granted an
option if such employee, immediately after the option is granted, owns stock
possessing 5% or more of the total combined voting power or value of all classes
of stock of the Company, within the meaning of Section 423(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code") and (ii) no employee shall be
granted an option which permits his rights to purchase stock under the Plan to
accrue at a rate which exceeds $6,250 of the fair market value of such stock
(determined at the time such option is granted) for each fiscal quarter in which
such option is outstanding at any time. Furthermore, the Committee may in its
sole discretion impose such restrictions on eligibility as may be permitted by
Section 423(b) (4) of the Code.

<PAGE>

5.       OPTION GRANTS

         Until such time as the Committee in its sole discretion terminates
further option grants under the Plan, all eligible employees of the Company
shall, on July 1, October 1, January 1 and April 1 of each year (the "Date of
Grant") starting July 1, 1998, be granted an option to purchase the Common
Stock, each such option to be subject and pursuant to the following terms and
conditions:

         (a)      Option Term. The term of each option shall be from the Date of
                  Grant to the date six months after the Date of Grant (the
                  "Date of Expiration").

         (b)      Option Price. The purchase price per share for each option
                  (the "Option Price") shall be the lesser of (i) the fair
                  market value of the Common Stock on the Date of Grant or (ii)
                  85% of the fair market value of the Common Stock on the Date
                  of Exercise (as such term is defined below). As used herein,
                  the fair market value of the Common Stock on the Date of Grant
                  shall be the closing price of the Common Stock on the Nasdaq
                  National Market on the date prior to the Date of Grant and the
                  fair market value of the Common Stock on the Date of Exercise
                  shall be the closing price of the Common Stock on the Nasdaq
                  National Market on the Date of Exercise provided, however,
                  that, if the employee exercising the option resells the shares
                  on the Date of Exercise, the average selling price for such
                  shares, before the payment of brokerage commissions and
                  expenses, shall be the fair market value on the Date of
                  Exercise. In the event the Common Stock ceases at any time to
                  be traded on the Nasdaq National Market, the fair market value
                  of the Common Stock shall be determined in such manner as may
                  be set by the Committee.

         (c)      Number of Option Shares. Unless and until the Committee in its
                  sole discretion determines otherwise, the number of shares
                  subject to each option shall be the whole number equal to (i)
                  up to 25% of each employee's total compensation during the
                  fiscal quarter starting with the Date of Grant, as such
                  percentage shall be determined by the Committee prior to the
                  Date of Grant, divided by (ii) the lesser of the fair market
                  value of the Common Stock on the Date of Grant or 85% of the
                  closing price of the Common Stock on the Nasdaq National
                  Market on the date prior to the Date of Exercise (or such
                  other manner for determining the fair market value of the
                  Common Stock on such date if not then traded on the Nasdaq
                  National Market). In no event, however, shall the number of
                  shares subject to any option exceed $6,250 divided by the fair
                  market value of the Common Stock on the Date of Grant.

         (d)      Exercise. The date of exercise of each option (the "Date of
                  Exercise") shall be a date during the three-month period
                  starting with the date three months after the Date of Grant
                  and ending on the Date of Expiration, as chosen by each
                  employee. Exercise shall not be made with respect to less than
                  the total number of shares subject to each option and shall be

                                       2
<PAGE>

                  effected by delivering to the Company written notice of
                  exercise at least one day prior to the Date of Exercise.
                  Notwithstanding the foregoing, each employee who is subject to
                  Section 16 of the Securities Exchange Act of 1934, as amended
                  (the "Exchange Act"), shall deliver to the Company written
                  notice of exercise at least six months prior to the Date of
                  Exercise and, absent such notice, shall be deemed to have made
                  an irrevocable election to have the Date of Exercise be the
                  Date of Expiration.

         (e)      Payment. Payment for the shares purchased upon exercise of
                  each option (including the amount, if any, necessary to
                  satisfy federal, state or local income tax withholding
                  requirements) shall be in cash within five business days
                  following the Date of Exercise and, in the event payment is
                  not received, the Company may withhold the shares and cancel
                  the option. Notwithstanding the foregoing, the Committee may
                  in its sole discretion permit employees (i) to pay for shares
                  acquired upon exercise of options by delivering shares of the
                  Common Stock owned by such employee or (ii) to forgo payment
                  for the shares and receive instead the net number of shares
                  that would be received if such employee borrowed shares of the
                  Common Stock for payment of the purchase price and returned
                  the borrowed shares from the shares acquired upon exercise of
                  the option.

         (f)      Termination of Employment. In the event an employee's
                  employment with the Company terminates for any reason other
                  than the employee's death, any option held by such employee
                  shall forthwith terminate without any further rights on the
                  part of the employee. In the event of an employee's death, the
                  employee's estate, legal representative or beneficiary may
                  exercise any option held by such employee at any time prior to
                  the Date of Expiration with respect to such option. Nothing
                  herein shall be deemed to confer any right of continued
                  employment with the Company or to limit the right of the
                  Company to terminate employment with any employee.

6.       RIGHTS AS A STOCKHOLDER

         Until such time as each option has been exercised and the shares
acquired thereby have been issued and delivered to the employee pursuant to such
exercise, the employee shall have no rights as a stockholder with respect to the
shares of the Common Stock subject to the option.

7.       NONTRANSFERABILITY OF THE OPTION

         Any option granted under the Plan may not be assigned or transferred
except by will or by the laws of descent and distribution and is exercisable
during the life of the employee only by the employee.

                                       3
<PAGE>

8.       COMPLIANCE WITH SECURITIES LAWS

          If the shares to be issued upon exercise of any option granted under
the Plan have not been registered under the Securities Act of 1933, as amended,
and any applicable state securities laws, the Company's obligation to issue such
shares shall be conditioned upon receipt of a representation in writing that the
employee is acquiring such shares for his or her own account and not with a view
to the distribution thereof and the certificate representing such shares shall
bear a legend in such form as the Company's counsel deems necessary or
desirable. In no event shall the Company be obligated to issue any shares
pursuant to the exercise of an option if, in the opinion of the Company's
counsel, such issuance would result in a violation of any federal or state
securities laws.

9.       CHANGE OF CONTROL

         In the event of a Change of Control (as such term is defined below),
all outstanding options under the Plan shall immediately become fully
exercisable and all of the rights and benefits relating thereto shall become
fixed and not subject to change or revocation by the Company. As used herein, a
Change of Control shall be deemed to have occurred if (i) any person within the
meaning of Section 13(d) and 14(d) of the Exchange Act, other than the Company
or any officer or director of the Company, becomes the beneficial owner, within
the meaning of Rule 13d-3 under the Exchange Act, of 20% or more of the combined
voting securities of the Company or (ii) a change of 20% or more in the
composition of the Board of Directors of the Company occurs without the approval
of the majority of said Board of Directors as it exists at the time immediately
preceding such change in composition.

10.      STOCK ADJUSTMENTS

         (a)      In the event of a stock dividend, stock split,
                  recapitalization, merger in which the Company is the surviving
                  corporation or other capital adjustment affecting the
                  outstanding shares of the Common Stock, an appropriate
                  adjustment shall be made, as determined by the Board of
                  Directors of the Company, to the number of shares subject to
                  the Plan and the exercise price per share with respect to any
                  option granted under the Plan.

         (b)      In the event of the complete liquidation of the Company or of
                  a reorganization, consolidation or merger in which the Company
                  is not the surviving corporation, any option granted under the
                  Plan shall continue in full force and effect unless either (i)
                  the Board of Directors of the Company modifies such option so
                  that it is fully exercisable with respect to the number of
                  shares measured by the then current compensation prior to the
                  effective date of such transaction or (ii) the surviving
                  corporation issues or assumes a stock option contemplated by
                  Section 424(a) of the Code.

                                       4
<PAGE>

11.      EFFECTIVENESS OF THE PLAN

         The Plan has been adopted on April 22, 1998 by resolution of the Board
of Directors of the Company and shall become effective upon the approval by the
affirmative votes of the holders of a majority of the Common Stock present, or
represented, and entitled to vote at a meeting duly held in accordance with the
applicable laws of the State of Delaware.

12.      AMENDMENT OF THE PLAN

         The Board may at any time alter, amend, suspend or terminate the Plan
in whole or in part, provided, however, that (i) no alteration, amendment,
suspension or termination shall adversely affect the rights of an employee with
respect to any outstanding options granted under the Plan and (ii) any amendment
which must be approved by the stockholders of the Company in order to ensure
that all transactions under the Plan continue to be exempt under Rule 16b-3
under the Exchange Act or any successor provision or to comply with any rule or
regulation of a governmental authority, applicable securities exchange or Nasdaq
National Market shall not be effective unless and until such stockholder
approval has been obtained in compliance with such rule or regulation.

                                       5

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