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EXHIBIT 10.8

July 27, 2004

Leonard Leff

President and CEO

CDS Companies

303 Merrick Road

Lynbrook, NY 11563

Dear Leonard:

Pursuant to our recent discussions, this letter will constitute a joint
marketing agreement between CDS Companies (“CDS”) and Integrated Financial
Systems, Inc. (“IFS”), the “Parties.”

Introduction and Background: CDS Companies and IFS both provide patient
account services to hospitals and other healthcare providers. The services
provided by each company complement those offered by the other, but do not
compete and neither company anticipates that their services will compete in the
future. Both companies believe it will be beneficial to be introduced to
prospective clients by the other company where the introducing company has a
current or potential relationship.

Compensation: As compensation for introductions to potential customers and
assisting as appropriate in completing a contractual business relationship with
a new hospital or system, the Company that is introduced will pay the
introducing Company   ***   of the Net Service Fee revenue actually received by the
introducing Company during the life of the Operating Agreement, or five years
from the effective date of the Contractual Agreement, whichever first occurs.
As additional consideration, for each of the first 10 hospitals or systems for
which revenue has been received by IFS, as a direct result of an introduction
by CDS to IFS, CDS shall also receive 5,000 warrants, each exercisable for one
share of common stock of Integrated Financial Systems, Inc., at the price of
$2.26 per share. Compensation payments will occur no later than 30 days
following the end of the month in which the revenue was received.

Termination: Either party may terminate this Agreement with thirty days
written notice to the other party for any reason, provided, however, the
introducing Company will continue to receive Compensation as provided above.

	 	 	 	 	 
	Very truly yours,	 	CDS Companies
	 
	 	 	 	 
	/s/ JOHN C. HERBERS

	 	By:	 	/s/ LEONARD LEFF
	

	 	 	 	

	John C. Herbers

	 	Title:	 	President & CEO
	Chief Executive Officer

	 	 	 	

	

	 	Date:	 	July 27, 2004
	

	 	 	 	

	***	 	Text has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested under
Rule 406 of the Securities Act of 1933.

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EXHIBIT 10.9

INTEGRATED FINANCIAL SYSTEMS, INC.

2002 EQUITY INCENTIVE PLAN

ADOPTED JUNE 26, 2002

APPROVED BY STOCKHOLDERS JUNE 26, 2002

1. PURPOSES.

(a)      The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company and its Affiliates,
may be given an opportunity to benefit from increases in value of the stock of
the Company through the granting of (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire
restricted stock.

(b)      The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees or Directors of or Consultants to the Company or
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.

2. DEFINITIONS.

(a)      “AFFILIATE” means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.

(b)      “BOARD” means the Board of Directors of the Company.

(c)      “CODE” means the Internal Revenue Code of 1.986, as amended.

(d)      “COMMITTEE” means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.

(e)      “COMMON STOCK” means the common stock of the Company:

(f)      “COMPANY” means Integrated Financial Systems, Inc., a Colorado
corporation.

(g)      “CONSULTANT” means any person, including an advisor, (i) engaged by
the Company or an Affiliate to render consulting services or (ii) who is a
member of the Board of Directors of an Affiliate. However, the term
“Consultant” shall not include Directors who are paid only a director’s fee by
the Company or who are not compensated by the Company for their services as
Directors.

(h)      “CONTINUOUS SERVICE” means the Stock Award holder’s service with the
Company or an Affiliate, whether as an Employee, Director or Consultant is not
interrupted or terminated. The Board or the chief executive officer of the
Company may determine, in that party’s sole discretion, whether Continuous
Service shall be considered interrupted in the case of: (i) any leave of
absence approved by the Board or the chief executive officer of the Company,
including sick leave, military leave, or any other personal leave; or (ii)
transfers between locations of the Company or between the Company, Affiliates
or their successors.

(i)      “DIRECTOR” means a member of the Board of Directors of the Company.

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(j)      “DISABILITY” means the inability of a person to perform the normal
duties of the person’s position with the Company or an Affiliate of the
Company, provided that such inability to perform must be certified in writing
(a “Physician’s Certificate”) by a medical doctor, reasonably acceptable to the
Company.

(k)      “EMPLOYEE” means any person employed by the Company or any Affiliate.
Neither service as a Director nor payment of a director’s fee by the Company or
an Affiliate shall be sufficient to constitute “employment” by the Company or
an Affiliate.

(l)      “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.

(m)      “FAIR MARKET VALUE” means, as of any date, the value of the Common
Stock of the Company determined as follows:

     (1) If the Common Stock is listed on any established stock exchange
or traded on The Nasdaq National Market or The Nasdaq SmallCap Market,
the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or market (or the exchange or market
with the greatest volume of trading in the Common Stock) on the last
market trading day prior to the day of determination, as reported in The
Wall Street Journal or such other source as the Board deems reliable; or

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

(n)      “INCENTIVE STOCK OPTION” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

(o)      “LISTING DATE” means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any
securities exchange, or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system.

(p)      “NON-EMPLOYEE DIRECTOR” means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or subsidiary, does
not receive compensation (directly or indirectly) from the Company or its
parent or subsidiary for services rendered as a consultant or in any capacity
other than as a Director.

(q)      “NONSTATUTORY STOCK OPTION” means an Option not intended to qualify as
an Incentive Stock Option.

(r)      “OFFICER” means a person who is an officer of the Company within the
meaning of the Bylaws of the Company.

(s)      “OPTION” means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.

(t)      “OPTION AGREEMENT” means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.

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(u)     
“OPTIONEE” means a person to whom an Option is granted pursuant to
the Plan, or if applicable, such other person who holds an outstanding Option.

(v)      “OUTSIDE DIRECTOR” means a Director who either (i) is not a current
employee of the Company or an “affiliated corporation,” is not a former
employee of the Company or an “affiliated corporation” receiving compensation
for prior services, was not an officer of the Company or an “affiliated
corporation” at any time, and is not currently receiving direct or indirect
remuneration from the Company or an “affiliated corporation” for services in
any capacity other than as a Director, or (ii) is otherwise considered an
“outside director” for purposes of Section 162(m) of the Code.

(w)      “PLAN” means this 2002 Equity Incentive Plan.

(x)      “SECURITIES ACT” means the Securities Act of 1933, as amended.

(y)      “STOCK AWARD” means any right granted under the Plan, including any
Option, a stock bonus and any stock issuance.

(z)      “STOCK AWARD AGREEMENT” means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to
the terms and conditions of the Plan.

3. ADMINISTRATION.

(a)      The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).

(b)      The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

     (1) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock
Award shall be granted; what type of Stock Award shall be granted; the
provisions of each Stock Award granted (which need not be identical),
including the time or times when a person shall be permitted to receive
stock pursuant to a Stock Award; and the number of shares with respect to
which a Stock Award shall be granted to each such person.

     (2) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct
any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.

     (3) To amend the Plan or a Stock Award as provided in Section 12.

(c)      The Board may delegate administration of the Plan to a committee
composed of two (2) or more members (the “Committee”), all of the members of
which Committee may be Non-Employee Directors and/or Outside Directors. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board.

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The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan.

(d)      All actions taken and all interpretations and determinations made by
the Board or Committee in good faith (including determinations of Fair Market
Value) shall be final and binding upon all Optionees, the Company and all other
interested persons. No member of the Board or Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, and all members of the Board and Committee shall, in
addition to their right as directors, be fully protected by the Company with
respect to any such action, determination or interpretation.

4. SHARES SUBJECT TO THE PLAN.

(a)      Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, the stock that may be issued pursuant to Stock Awards shall
not exceed in the aggregate four hundred and fifty thousand (450,000) shares of
the Common Stock. If any Stock Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the
stock not acquired under such Stock Award shall revert to and again become
available for issuance under the Plan. If any shares of Common Stock acquired
pursuant to the exercise of an Option shall for any reason be repurchased by
the Company under a repurchase option provided under the Plan, the stock
repurchased by the Company under such repurchase option shall revert to and
again become available for issuance under the Plan.

(b)      The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

5. ELIGIBILITY.

(a)      Incentive Stock Options may be granted only to Employees. Stock Awards
other than Incentive Stock Options may be granted only to Employees, Directors
or Consultants.

(b)      No person shall be eligible for the grant of an Incentive Stock Option
if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the exercise price of such Incentive Stock Option is at
least one hundred ten percent (110°/a) of the Fair Market Value of such stock
at the date of grant and the Incentive Stock Option is not exercisable after
the expiration of five (S) years from the date of grant.

6. OPTION PROVISIONS.

Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and a separate certificate or certificates will be issued for shares
purchased on exercise of each type of Option. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

(a)      TERM. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.

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(b)      PRICE. The exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Incentive Stock Option on the date the Incentive Stock Option is
granted or such greater amount as required by Section 5(b). The exercise price
of each Nonstatutory Stock Option shall be determined by the Board.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or
a Nonstatutory Stock Option) may be granted with an exercise price lower than
that set forth in the preceding sentence if such Option is granted pursuant to
an assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code.

(c)      CONSIDERATION. The purchase price of stock acquired pursuant to an
Option shall be paid at the time the Option is exercised, to the extent
permitted by applicable statutes and regulations, either (i) in cash or by
check or (ii) at the discretion of the Board, at the time of the grant of the
Option, under one of the following alternatives:

     (1) Provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, pursuant
to a program developed under Regulation T as promulgated by the Federal
Reserve Board which, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds;

     (2) Provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, by
delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company’s reported earnings, and owned
free and clear of any liens, claims, encumbrances or security interests,
which Common Stock shall be valued at its fair market value on the date
of exercise;

     (3) Pursuant to a deferred payment alternative as described in the
Option Agreement, provided that, at any time that the Company is
incorporated in Colorado, payment of the Common Stock’s “par value” (as
defined in the Colorado Business Corporation Act shall not be made by
deferred payment;

     (4) In any other form of legal consideration that may be acceptable
to the Board; or

     (5) By any combination of the above methods.

(d)      TRANSFERABILITY. An Incentive Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the person to whom the Option is granted
only by such person. A Nonstatutory Stock Option may be transferable to the
extent expressly provided in the Option Agreement; provided, however, that if
the Option Agreement does not specifically provide for transferability, then
such Nonstatutory Stock Option shall not be transferable except by will or by
the laws of descent and distribution or pursuant to a domestic relations order,
and shall be exercisable during the lifetime of the person to whom the
Nonstatutory Stock Option is granted only by such person or any transferee
pursuant to a domestic relations order. Notwithstanding the foregoing, the
person to whom the Option is granted may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionee, shall thereafter be entitled to
exercise the Option.

(e)      VESTING. The total number of shares of stock subject to an Option
shall vest and become exercisable as provided in the Option Agreement.

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(f)      TERMINATION OF CONTINUOUS SERVICE. In the event an Optionee’s
Continuous Service terminates (other than upon the Optionee’s death or
Disability), the Optionee may exercise his or her Option (to the extent that
the Optionee was entitled to exercise it at the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months after the termination of the Optionee’s Continuous Service (or such
longer or shorter period specified in the Option Agreement) or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If,
after termination, the Optionee does not exercise his or her Option within the
time specified in the Option Agreement, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

An Optionee’s Option Agreement may also provide that if the exercise of
the Option following the termination of the Optionee’s Continuous Service
(other than upon the Optionee’s death or Disability) would be prohibited at any
time solely because the issuance of shares would violate the registration
requirements under the Securities Act or any material regulatory requirements
of any foreign jurisdiction, then the Option shall terminate on the earlier of
(i) the expiration of the term of the Option as set forth in the Option
Agreement, or (ii) the expiration of a period of three (3) months after the
termination of the Optionee’s Continuous Service during which the exercise of
the Option would not be in violation of such registration requirements.

(g)      DISABILITY OF OPTIONEE. In the event an Optionee’s Continuous Service
terminates as a result of the Optionee’s Disability, the Optionee may exercise
his or her Option, but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of
the term of the Option as set forth in the Option Agreement. If, at the date of
termination, the Optionee is not entitled to exercise the entire Option, the
shares covered by the unexercisable portion of the Option shall revert to and
again become available for issuance under the Plan no later than thirty (30)
days following the date of termination. If, after termination, the Optionee
does not exercise his or her Option within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under the Plan.

(h)      DEATH OF OPTIONEE. In the event the Optionee’s Continuous Service
terminates as a result of death or in the event of the death of an Optionee
during, or ,within the three (3) month or twelve (12) month periods referred to
above after the termination of the Optionee’s Continuous Service, the Option
may be exercised by the Optionee’s estate, by a person who acquired the right
to exercise the Option by bequest or inheritance or by a person designated to
exercise the option upon the Optionee’s death pursuant to subsection 6(d), but
only within the period ending on the earlier of (i) the date ,,’ -twelve (12)
months following the date of death (or such longer or shorter period specified
in the Option Agreement), or (ii) the expiration of the term of such Option as
set forth in the Option Agreement. If, at the time of death, the Optionee was
not entitled to exercise the entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan no later than thirty (30)
days following the date of termination. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate, and the
shares covered by such Option shall revert to and again become available for
issuance under the Plan.

(i)      QUALIFIED RETIREMENT OF OPTIONEE. In the event an Optionee’s
Continuous Service terminates as a result of the Optionee’s Qualified
Retirement (as determined by the Board of Directors or the Committee), the
Optionee may exercise his or her Option, but only within such period of time
ending on the expiration of the term of the Option as set forth in

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the Option Agreement (or such shorter period specified in the Option
Agreement). If, at the date of such termination, the Optionee is not entitled
to exercise the entire Option, the shares covered by the unexercisable portion
of the Option shall revert to and again become available for issuance under the
Plan no later than thirty (30) days following the date of termination. If,
after such termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the shares covered
by such Option shall revert to and again become available for issuance under
the Plan.

(j)      EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionee may elect at any time before the Optionee’s Continuous
Service terminates to exercise the Option as to any part or all of the shares
subject to the Option prior to the full vesting of the Option. Any unvested
shares so purchased shall be subject to a repurchase right in favor of the
Company or any other restriction the Board determines appropriate.

7. TERMS OF STOCK BONUSES AND STOCK ISSUANCE.

(a)      Each stock bonus or stock issuance shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. The
terms and conditions of stock bonus or stock issuance may change from time to
time, and the terms and conditions of separate agreements need not be
identical, but each stock bonus or stock issuance shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions as appropriate:

     (1) PURCHASE PRICE. The purchase price under each stock issuance
shall be such amount as the Board shall determine and designate in such
agreement, and play be less than the stock’s Fair Market Value on the
date such award is made. Notwithstanding the foregoing, the Board may
determine that eligible participants in the Plan may be awarded stock
pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company for its benefit.

     (2) TRANSFERABILITY. A stock bonus or stock issuance may be
transferable to the extent expressly provided in the Stock Award
Agreement; provided, however, that if the Stock Award Agreement does not
specifically provide for transferability, then such stock bonus or stock
issuance award shall not be transferable except by will or the laws of
descent and distribution or pursuant to a domestic relations order, and
shall be exercisable during the lifetime of the person to whom the stock
bonus or stock issuance award is granted only by such person or any
transferee pursuant to a domestic relations order, so long as stock
awarded under such agreement remains subject to any restrictions pursuant
to the agreement.

     (3) CONSIDERATION. The purchase price of stock acquired pursuant to
a stock issuance shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board, according to a deferred
payment or other arrangement with the person to whom the stock is sold;
or (iii) in any other form of legal consideration that may be acceptable
to the Board in its discretion. Notwithstanding the foregoing, the Board
may award stock pursuant to a stock bonus agreement in consideration for
past services actually rendered to the Company or for its benefit.

     (4) VESTING. Shares of stock sold or awarded under the Plan may, but
need not, be subject to a repurchase option or reacquisition right in
favor of the Company in accordance with a vesting schedule to be
determined by the Board.

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     (5) TERMINATION OF CONTINUOUS SERVICE. In the event a Participant’s
Continuous Service terminates, the Company may repurchase or otherwise
reacquire any or all of the shares of stock held by that person which
have not vested as of the date of termination under the terms of the
stock bonus or stock issuance agreement between the Company and such
person, subject to the provisions of Section 11.

8. COVENANTS OF THE COMPANY.

(a)      During the terms of the Stock Awards, the Company shall keep available
at all times the number of shares of stock required to satisfy such Stock
Awards.

(b)      The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
grant Stock Awards and to issue and sell shares of Common Stock upon exercise
of the Stock Awards; provided, however, that this undertaking shall not require
the Company to register tinder the Securities Act the Plan, any Stock Award or
any stock issued or issuable pursuant to any such Stock Award. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell stock upon
exercise of such Stock Awards unless and until such authority is obtained.

9. USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.

10. MISCELLANEOUS.

(a)      The Board shall have the power to accelerate the time at which a Stock
Award may first be exercised or the time during which a Stock Award or any part
thereof will vest, notwithstanding the provisions in the Stock Award stating
the time at which it may first be exercised or the time during which it will
vest.

(b)      No Optionee shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such Stock Award
unless and until such person has satisfied all requirements for exercise of the
Stock Award pursuant to its terms.

(c)      Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Optionee any right to continue in the
employ of the Company or any Affiliate (or to continue acting as a Director or
Consultant) or shall affect the right of the Company or any Affiliate to
terminate the employment of any Employee with or without cause, the right of
the Company’s Board of Directors and/or the Company’s stockholders to remove
any Director pursuant to the terms of the Company’s Bylaws and the provisions
of applicable laws, or the right to terminate the relationship of any
Consultant pursuant to the terms of such Consultant’s agreement with the
Company or Affiliate to which such Consultant is providing services.

(d)      To the extent that the aggregate Fair Market Value (determined at the
time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand
dollars ($100,000), the Options or portions thereof which exceed such

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limit (according to the order in which they were granted) shall be treated
as Nonstatutory Stock Options.

(e)      The Company may require any person to whom a Stock Award is granted,
or any person to whom a Stock Award is transferred pursuant to subsection 6(d)
or 7(a)(2), as a condition of exercising or acquiring stock under any Stock
Award, (1) to give written assurances satisfactory to the Company as to such
person’s knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (2) to
give written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the Stock Award for such person’s own account
and not with any present intention of selling or otherwise distributing the
stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise or acquisition of stock under the Stock Award has been registered
under a then currently effective registration statement under the Securities
Act, or (ii) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may
require the Stock Award holder to provide such other representations, written
assurances or information which the Company shall determine is necessary,
desirable or appropriate to comply with applicable securities and other laws as
a condition of granting a Stock Award to such Stock Award holder or permitting
the Stock Award holder to exercise such Stock Award. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends
restricting the transfer of the stock.

(f)      To the extent provided by the terms of a Stock Award Agreement, the
Stock Award holder may satisfy any federal, state or local tax withholding
obligation relating to the exercise or acquisition of stock under a Stock Award
by any of the following means or by a combination of such means (in addition to
the Company’s right to withhold from any compensation paid to the Stock Award
holder by the Company): (1) tendering a cash payment; (2) authorizing the
Company to withhold shares from the shares of the Common Stock otherwise
issuable to the Optionee as a result of the exercise or acquisition of stock
under the Stock Award; or (3) delivering to the Company owned and unencumbered
shares of the Common Stock of the Company.

11. ADJUSTMENTS UPON CHANGES IN STOCK.

(a)      If any change is made in the stock subject to the Plan, or subject to
any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by
the Company), the Plan will be appropriately adjusted in the classes) and
maximum number of shares subject to the Plan pursuant to subsection 4(a) and
the maximum number of shares subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately
adjusted in the class(es) and number of shares and price per share of stock
subject to such outstanding Stock Awards. Such adjustments shall be made by the
Board, the determination of which shall be final, binding and conclusive. (The
conversion of any convertible securities of the Company shall not be treated as
a “transaction not involving the receipt of consideration by the Company”.)

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(b)      In the event of a Change in Control (as defined herein) any surviving
corporation or acquiring corporation shall assume any Stock Awards outstanding
under the Plan or shall substitute similar stock awards (including an award to
acquire the same consideration paid to the stockholders in the transaction
described in this subsection 11(b)) for those outstanding under the Plan. In
the event any surviving or acquiring corporation refuses to assume such Stock
Awards or to substitute similar stock awards for those outstanding under the
Plan, then: (i) with respect to Stock Awards held by persons whose Continuous
Service has not terminated prior to such Change in Control, the vesting (and,
if applicable, the exercisability) of Stock Awards held by such persons shall
be accelerated immediately prior to such event, and the Stock Awards terminated
if not exercised at or prior to such event, and (ii) any Company repurchase
option or reacquisition right with respect to shares acquired by such persons
under a Stock Award shall lapse immediately prior to such event and the shares
held by such persons shall be fully vested. With respect to any other Stock
Awards outstanding under the Plan, such Stock Awards shall terminate if not
exercised prior to such event.

For purposes of this Plan, a “Change in Control°” shall mean: (i) a sale
of all or substantially all of the assets of the Company; (ii) a merger or
consolidation in which the Company is not the surviving corporation or a
reverse merger in which the Company is the surviving corporation but the shares
of the Common Stock outstanding immediately preceding the merger are converted
by virtue of the merger into other property, whether in the form of securities,
cash or otherwise (other than (a) a merger or consolidation in which
stockholders immediately before the merger or consolidation have, immediately
after the merger or consolidation, greater stock voting power of the acquiring
or controlling corporation, and in no event less than a majority of such stock
voting power, (b) a transaction the principal purpose of which is to change the
State of the Company’s incorporation, or (c) a merger of the Company into any
of its wholly owned subsidiaries); or (iii) an acquisition by any person,
entity or group within the meaning of Section 13(d) or 14(d) of the Exchange
Act, or any comparable successor provisions (excluding any employee benefit
plan, or related trust, sponsored or maintained by the Company or an Affiliate)
of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors.

(c)      In the event of a dissolution or liquidation of the Company, any Stock
Awards outstanding under the Plan shall terminate if not exercised prior to
such event.

12. AMENDMENT OF THE PLAN AND STOCK AWARDS.

(a)      The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders
of the Company to the extent stockholder approval is necessary for the Plan to
satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq
or securities exchange listing requirements.

(b)      The Board may in its sole discretion submit any other amendment to the
Plan for stockholder approval, including, but not limited to, amendments to the
Plan intended to satisfy the requirements of Section 1 62(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

(c)      It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide Optionees with the
maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated

10

 

thereunder relating to Incentive Stock Options and/or to bring the Plan
and/or Incentive Stock Options granted under it into compliance therewith.

(d)      Rights and obligations under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.

(e)      The Board at any time, and from time to time, may amend the terms of
any one or more Stock Awards; provided, however, that the rights under any
Stock Award shall not be impaired by any such amendment unless (i) the Company
requests the consent of the person to whom the Stock Award was granted and (ii)
such person consents in writing.

13. TERMINATION OR SUSPENSION OF THE PLAN.

(a)      The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

(b)      Rights and obligations under any Stock Award granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan,
except with the consent of the person to whom the Stock Award was granted.

14. EFFECTIVE DATE OF PLAN.

The Plan shall become effective as of the date adopted by the Board, but
no Stock Awards granted under the Plan shall be exercised (or, in the case of a
stock bonus, shall be granted) unless and until the Plan has been approved by
the stockholders of the Company, which approval shall be within twelve (12)
months before or after the date the Plan is adopted by the Board.

15. CHOICE OF LAW.

All questions concerning the construction, validity and interpretation of
this Plan shall be governed by the law of the State of Colorado, without regard
to such state’s conflict of laws rules.

11

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