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                                                                   EXHIBIT 10.16

                           AVIATION DISTRIBUTORS, INC.
                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT is made as of this 1st day of June, 1998 by and between GARY
L. JOSLIN, residing at 28906 Greystone, Mission Viejo, California 92692
("Executive"), and AVIATION DISTRIBUTORS, INC., a Delaware corporation, with
offices at One Capital Drive, Lake Forest, California 92630 (the "Company"), for
the purpose of setting forth the terms and conditions of Executive's employment
by the Company and to protect the Company's knowledge, expertise, customer
relationships and the confidential information the Company has developed
regarding clients, customers, shareholders, option holders, employees, products,
business operations and services. As of the Effective Date, this Agreement
supersedes any prior understandings or agreements between Executive and the
Company or any of the Company's subsidiaries or affiliates.

     The Board desires to provide for the continued employment of Executive and
to make certain changes in Executive's employment arrangements with the Company
which the Board has determined will reinforce and encourage the continued
attention and dedication to the Company of Executive as a member of the
Company's management, in the best interest of the Company and its shareholders.
Executive is willing to commit himself to continue to serve the Company, on the
terms and conditions herein provided, although this Agreement may be amended at
any time by written agreement among the parties.

     In order to effect the foregoing, the Company and Executive wish to enter
into an employment agreement on the terms and conditions set forth below. In
consideration of the premises and the respective covenants and agreements of the
parties herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:

1.   TIME AND EFFORTS

     1.1 Executive shall be employed as the Company's Vice President - Finance
and Chief Financial Officer and shall devote his full-time attention to the
duties and responsibilities of Vice President - Finance and Chief Financial
Officer in furtherance of the Company's business. Subject to consultation with,
and the directions of, the Audit Committee or the Chief Executive Officer, as
the case may be, Executive shall have full responsibility for, and authority
over, all financial, internal control, accounting, budgeting and financial
planning matters of the Company. Executive shall have custody of the books,
records and assets of the Company and shall be responsible for the systems,
procedures and record keeping with respect to such item. The Company controller
or person performing such function, internal auditors or persons performing such
function and all financial and accounting personnel shall report directly or
indirectly to Executive, Subject to the right of the Company's independent
auditors to consult directly with the Audit Committee, Executive shall have
primary responsibility for the Company's interactions with its independent
auditors.

     1.2 In the performance of all of his responsibilities hereunder, Executive
shall be subject to all of the Company's policies, rules, and regulations
applicable to its officers and employees generally and its Vice President -
Finance and Chief

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Financial Officer specifically. Executive shall report to the Audit Committee of
the Board of Directors; however, Executive agrees to report directly to the
Chief Executive Officer of the Company if so determined by resolution of the
Board of Directors.

     1.3 Executive shall be a member of the Company's Executive Committee during
the Term of this Agreement (as defined in Section 2 below).

     1.4 Without the prior express authorization of the Board, Executive shall
not, directly or indirectly, during the Term of this Agreement engage in any
activity competitive with or adverse to the Company's business, whether alone,
as a partner or independent contractor, or as an officer, director, or employee
of any other corporation. This Agreement shall not be interpreted to prohibit
Executive from making passive personal investments, conducting private business
affairs, or engaging in educational or charitable activities, if those
activities do not materially interfere with the services required hereunder.
Subject to the reasonable prior approval of the Board, Executive may act as a
director of any profit or non-profit corporation or other business entity, if
such activity is not inconsistent with the business of the Company.

     1.5 In order to induce the Company to enter into this Agreement, Executive
represents and warrants to the Company that (i) Executive is not a party or
subject to any employment agreement or arrangement with any other person, firm,
company, corporation or other business entity; and (ii) Executive is subject to
no restraint, limitation or restriction by virtue of any agreement or
arrangement, or by virtue of any law or rule of law or otherwise which would
impair Executive's right or ability to enter the employ of the Company or to
perform fully his duties and obligations pursuant to this Agreement.

     1.6 Without first obtaining the written permission of the Board in each
instance, Executive will not authorize or permit the Company to engage the
services, of, or engage in any business activity with, or provide any financial
or other benefit to, any affiliate of Executive. The phrase "affiliate of
Executive" as used in this Agreement shall mean and include Executive's family
by blood or marriage (including, without limitation, parents, spouse, siblings,
children and in-laws), and any business or business entity which is directly or
indirectly owned or controlled by Executive or any member of Executive's family
or in which Executive or any member of Executive's family has any direct or
indirect financial interest whatsoever.

2.   TERM

     The initial Term of this Agreement is from June 1, 1998 (the "Effective
Date") until May 31, 2001; however on each anniversary of the Effective Date,
this Agreement shall be automatically renewed for a new three-year Term from
such anniversary date unless the Company notifies Executive in writing 90 days
prior to the anniversary of the Effective Date that the Company will not be
renewing this Agreement on the next anniversary of the Effective Date, or unless
sooner terminated pursuant to Section 3. References hereinafter to the "Term" of
this Agreement shall refer to both the initial term and any extended term of
Executive's employment hereunder.

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3.   TERMINATION

     This Agreement shall be terminated upon the happening of any of the
following events:

     3.1  Upon the death of Executive.

     3.2  Whenever the Company and Executive shall mutually agree to
          termination.

     3.3  At the option of the Company, upon written notice by the Company to
Executive, for Cause. "Cause" shall exist for such termination if Executive (i)
pleads or is found guilty of a felony involving an act of dishonesty or moral
turpitude by a court of competent jurisdiction; (ii) has engaged in serious
misconduct; (iii) has made any material misrepresentation or omission to the
Company under Section 1.5 hereof; (iv) has committed an unexcused material
breach of his duty in the course of Executive's employment; (v) has been guilty
of habitual neglect of his duties; (vi) has usurped a corporate opportunity, is
guilty of fraudulent embezzlement of property or funds of the Company, or
committed any act of fraud or intentional misrepresentation moral turpitude,
dishonesty or other misconduct that would constitute a felony; or (vii) has
committed a material, unexcused breach of this Agreement.

     3.4  The Company may terminate Executive's employment under this Agreement
at any time without Cause, subject to provisions for payment of compensation as
specified under Section 6.5 of this Agreement.

     3.5  At the option of Executive, upon 90 days written notice by Executive
          to the Company.

     3.6  If as a result of Executive's incapacity due to physical or mental
illness, Executive shall have been absent from his duties hereunder on a
full-time basis for the entire period of three consecutive months, and within 30
days after written notice of termination is given (which may occur before or
after the end of such three-month period) shall not have returned to the
performance of his duties hereunder on a full-time basis, the Company may
terminate Executive's employment hereunder.

     3.7  Upon the expiration of the Term of this Agreement, or any extension or
renewal thereof.

4.   COMPANY'S AUTHORITY

     Executive agrees to observe and comply with the reasonable rules and
regulations of Company as adopted by the Board of Directors of the Company or
committee of the Board of Directors respecting performance of Executive's duties
and to carry out and perform orders, directions, and policies of Company as they
may be, from time-to-time, stated to Executive either verbally or in writing.

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5.   VACATION

     During each calendar year of the Term of this Agreement, Executive shall be
entitled three weeks of paid vacation, earned ratably over the Term of each
calendar year during the Term of this Agreement. Executive shall be entitled to
receive payment for accrued vacation not taken during each calendar year during
the Term of this Agreement or may accrue such vacation for use in a subsequent
calendar year; however Executive shall be subject to a maximum of six weeks of
accrued vacation.

6.   CURRENT COMPENSATION

     6.1 ANNUAL SALARY. For all services rendered by Executive under this
Agreement, the Company shall pay or cause to be paid to Executive, and Executive
shall accept the annual Salary and Incentive Compensation, if any, all in
accordance with the subject to the terms of this Agreement. For purposes of this
Agreement, the term "Compensation" shall mean the Annual Salary and Incentive
Compensation, if any. Executive shall be entitled to receive as current
compensation an annual salary in an amount of not less than $170,000 per annum
(hereinafter referred to as the "Annual Salary"). References in this Agreement
to "annual" or "per annum" or "Annual" and similar phrases shall mean the
twelve-month period commencing on May 1st of each year during the Term of this
Agreement unless otherwise indicated.

     6.2  INCENTIVE COMPENSATION. In addition, Executive shall be entitled to
annual Incentive Compensation in accordance with the Company's Executive
Incentive Compensation Plan. The Company acknowledges the current Executive
Incentive Compensation Plan provides for the contribution of 7.5% of the
Company's earnings before taxes to a senior management bonus pool to be
allocated among the senior management in accordance with the determination of
the Board of Directors, not to exceed an aggregate contribution to such bonus
pool of $250,000 annually.

     6.3  401(K) PLAN. Executive shall be entitled to participate in the
Company's 401(k) or other similar retirement benefit plan.

     6.4  PAYMENTS OF CURRENT COMPENSATION. The payment of Executive's Annual
Salary shall be made in semi-monthly installments on the then prevailing paydays
of the Company. Any payment for Incentive Compensation will be made in
accordance with the Executive Incentive Compensation Plan, and payment will be
made in one lump sum concurrently with payments made to others in senior
management. All payments are subject to the customary withholding tax and other
employment taxes as required with respect to compensation paid to an employee.

     6.5 PAYMENT OF COMPENSATION ON TERMINATION.

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     6.5.1 Upon termination of Executive's employment prior to the expiration of
this Agreement, if such termination is pursuant to Section 3.1, 3.2, 3.5, 3.6,
or 3.7 hereof, Executive shall be entitled to any Annual Salary and vacation
accrued but unpaid through the date of termination of employment, payable on the
date of termination.

     6.5.2 Upon termination of Executive's employment prior to the expiration of
this Agreement, if such termination is pursuant to Section 3.4 hereof, Executive
shall be entitled to any Annual Salary and vacation accrued but unpaid through
the date of termination of employment, payable on the date of termination, and
payments of Annual Salary for the number of months remaining in the Term of this
Agreement prior to such termination, payable in semi-monthly installments on the
then prevailing pay days of the Company to the estate of Executive for such
number of months. Executive shall have no obligation to mitigate his damages.

7.   DETERMINATION OF DISABILITY; PAYMENT OF DISABILITY INSURANCE PREMIUMS

     7.1 In the event Executive's disability, as defined in Section 3.7, is in
question, and after written request by the Company, Executive refuses to be
examined by his regularly attending physician or if the regularly attending
physician fails to submit a report within 30 days after the examination has been
requested by the Company, the determination of disability shall be made by the
Company.

     7.2 In addition to the disability benefits available to all executive
employees of the Company, the Company agrees to pay the monthly premiums on
Executive's existing long-term disability policy with UNUM during the Term of
this Agreement. In the event of Executive's disability, as defined in Section
3.7, Executive shall be entitled to receive all of the benefits of such existing
long-term disability policy with UNUM in addition to any other disability
benefits payable to him under any policy maintained by the Company.

8.   MISCELLANEOUS BENEFITS

     8.1 MEDICAL INSURANCE. Executive and his family shall be entitled to
participate in any medical, dental, vision, life, long-term disability, other
insurance or employee benefit program instituted or maintained by the Company
for the benefit of its executive employees.

     8.2 PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT WITHOUT CAUSE. If
Executive's employment with the Company is terminated without cause, the Company
agrees that Executive shall be entitled to continued compensation as if
Executive were still actively employed by the Company, for the remainder of the
Term of this Agreement. If applicable law or the terms and conditions of such
plans do not permit Executive to be covered with respect to any benefit under
this Agreement as if Executive were still actively employed by the Company, the
Company agrees to pay Executive an amount equal to what the

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Company would have paid to maintain such benefits if Executive were still
employed by the Company for the remainder of the Term of this Agreement.

     8.3 BUSINESS EXPENSES. Executive shall be reimbursed for all reasonable
expenses incurred by Executive in connection with Executive's attendance of
business meetings and promotion of Company business upon presentation by
Executive to the Company of an expense report and adequate records or other
documentation substantiating the expenditures, not less frequently than monthly.
Any such amounts disallowed as a business expense for federal or state income
tax purposes shall be deemed additional salary to Executive. The fact that the
Company may not reimburse Executive for an expense is not an indication that the
Company determined that the expense was not incurred on its behalf or in
connection with the Company's business.

     8.4 LIFE INSURANCE. During the Term of this Agreement, the Company shall
pay for and maintain on a continuous basis, life insurance in the amount of
$500,000 on the life of Executive naming Executive's estate as beneficiary.

     8.5 ADDITIONAL BENEFITS. Executive shall be entitled to participate in all
programs, rights and benefits for which executive is otherwise entitled to any
bonus plan, incentive plan, participation plan or extra compensation plan,
pension plan, profit sharing plan, life, medical, dental, disability or other
insurance plan or policy or other plan or benefit the Company may provide for
senior executives or for employees of the Company generally from time to time in
effect during the term of this Agreement. For the avoidance of doubt, the rights
granted or afforded to Executive under any such plans shall be not less than the
most favorable rights and highest amounts granted to employees of similar or
lower position with the Company and on terms at least as favorable.

9.   RESTRICTIVE COVENANTS

     9.1 CONFIDENTIAL INFORMATION. Executive acknowledges that in his employment
hereunder he occupies a position of trust and confidence. During the Term, and
thereafter in accordance with the provisions of this Agreement, Executive shall
not, except as may be required to perform his duties hereunder as required by
applicable law, and except for information which is or becomes publicly
available other than as a result of a breach by Executive of the provisions
hereof, disclose to others or use, whether directly or indirectly, any
Confidential Information. "Confidential Information" shall mean information
about the Company, its subsidiaries and affiliates, and their respective
suppliers, clients and customers that is not disclosed by the Company for
financial reporting purposes and that was learned by Executive in the course of
his employment hereunder, including (without limitation) proprietary knowledge,
trade secrets, market research, data, formulae, information and supplier, client
and customer lists and all papers, resumes, and records (including computer
records) of the documents containing such Confidential Information. Executive
agrees to deliver or return to the Company, at the Company's request at any time
or upon termination or expiration of his employment, or as soon thereafter as
possible, all documents, computer tapes and disks, records, lists, data,
drawings, prints, notes and written information (and all copies thereof)
furnished by the Company or any of its subsidiaries

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affiliates or prepared by Executive during the Term of his employment by the
Company. The obligations hereof shall not apply to any information which is or
becomes public or in the public domain by action of the Company or through no
fault of Executive.

     9.2 BUSINESS DIVERSION. During the term and for 30 months thereafter,
Executive shall not, directly or indirectly, influence or attempt to influence
customers or suppliers of the Company or any of its subsidiaries or affiliates
to divert their business to any competitor of the Company.

     9.3 NON-SOLICITATION. Executive recognizes that he will possess
confidential information about other employees of the Company and its
subsidiaries and affiliates relating to, among other things, their education,
experience, skills, abilities, compensation and benefits, and interpersonal
relationships with suppliers and customers of the Company. Executive recognizes
that the information he will possess about these other employees is not
generally known, is of substantial value to the Company, and will be acquired by
him because of his business position with the Company. Executive agrees that,
during the Term and for 12 months thereafter, he will not, directly or
indirectly, solicit or recruit any employee of the Company, its subsidiaries or
affiliates for the purpose of being employed by him or by any other person on
whose behalf he is acting as an agent, representative or employee and that he
will not convey any such confidential information or trade secrets about other
employees of the Company, its subsidiaries or affiliates to any other person.

     9.4 If Executive breaches, or threatens to commit a breach of, any of the
provisions of Section 9 (the "Restrictive Covenants"), the Company and its
subsidiaries shall have the right to the following:

          9.4.1 SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Company or its
subsidiaries and that money damages would not provide an adequate remedy to the
Company or its subsidiaries.

          9.4.2 ACCOUNTING. The right and remedy to require Executive to account
for and pay over to the Company or its subsidiaries, as the case may be, all
compensation, profits, monies, accruals, increments or other benefits derived or
received by Executive as a result of any transaction constituting a breach of
the Restrictive Covenants.

          9.4.3 SEVERABILITY OF RESTRICTIVE COVENANTS. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in geographic
and temporal scope and in all other respects. If any court determines at any of
the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants shall not thereby be affected and shall
be given full effect without regard to the invalid provisions.

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          9.4.4 BLUE PENCILING. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographic scope or such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall not be enforceable.

          9.4.5 ENFORCEABILITY OF JURISDICTIONS. The obligations in this Section
9 shall survive the termination of Executive's employment or expiration of this
Agreement and shall be fully enforceable thereafter. Executive intends to and
hereby confers jurisdiction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographic scope of such Restrictive Covenants.
If the courts of any one or more of such jurisdictions hold the Restrictive
Covenants unenforceable by reason of the breadth of such scope or otherwise, it
is the intention of Executive that such determination not bar or in any way
affect the right of the Company or its subsidiaries to the relief provided above
in the courts of any other jurisdiction within the geographic scope of such
Restrictive Covenants, as to breaches of such Restrictive Covenants in such
other respective jurisdictions, such Restrictive Covenants as they relate to
each jurisdiction being, for this purpose, severable into diverse and
independent Restrictive Covenants.

10.  PARTICIPATION IN STOCK AND OPTION EXECUTIVE COMPENSATION PLAN

     10.1 Executive shall be granted an option (the "1998 Options") to purchase
50,000 shares of Common Stock of the Company (the "Option Shares") pursuant to
the terms and conditions contained in the Company's 1996 Stock and Option and
Incentive Award Plan, (the "Plan"). The exercise price for the Option Shares
will be equal to $5.00 per share, and the options will vest ratably over three
years on each anniversary of the Effective Date commencing on June 1, 1999.

     10.2 Executive shall be considered for additional grants of options, stock
appreciation rights, phantom stock rights, and any similar option or securities
or equity compensation when and as such grants are considered for other
executives or employees of the Company.

     10.3 In the event of termination of Executive's employment as set forth in
Section 3.4, the 1998 Options, any other option or equity-based incentives
subsequently granted, or any deferred or incentive compensation programs shall
immediately vest.

11.  DISPUTE RESOLUTION

     The parties agree that any dispute that may arise in connection with,
arising out of or relating to this Agreement, or any dispute that relates in any
way, in whole or in part, to Executive's employment with the Company, the
termination of that employment, or any other dispute by and among the parties or
their successors, assigns or affiliates, shall be submitted to binding
arbitration in Orange County, California according to the Employment Dispute
Resolution Rules and Procedures of the American Arbitration Association. This
arbitration obligation extends to any and all claims that may arise by and
between the

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parties or their successors, assigns or affiliates, and expressly extends to,
without limitation, claims or cause of action for wrongful termination,
impairment of ability to compete in the open labor market, breach or an express
or implied contract, breach of the covenant of good faith and fair dealing,
breach of fiduciary duty, fraud, misrepresentation, defamation, slander,
infliction of emotional distress, disability, loss of future earnings, and
claims under the applicable state constitution, the United States Constitution,
and applicable state fair employment laws, federal equal employment opportunity
laws, and federal and state labor statutes and regulations, including, but not
limited to, the Civil Rights Act of 1964, as amended, the Labor-Management
Relations Act, as amended, the Worker Retraining and Notification Act of 1988,
the Americans With Disabilities Act of 1990, the Rehabilitation Act of 1973, as
amended, the Employee Retirement Income Security Act of 1974, as amended, the
Age Discrimination in Employment Act of 1967, as amended, and the California
Fair Employment and Housing Act, as amended.

12.  ASSIGNMENT

     This Agreement is a personal contract, and the rights, interests and
obligations of Executive hereunder may not be sold, transferred, assigned,
pledged or hypothecated except as otherwise expressly permitted by the
provisions of this Agreement. Executive shall not under any circumstances have
any option or right to require payment hereunder otherwise than in accordance
with the terms hereof. Except as otherwise expressly provided herein, Executive
shall not have any power of anticipation, alienation or assignment of payments
contemplated hereunder, and all rights and benefits of Executive shall be for
the sole personal benefit of Executive, and no other person shall acquire any
right, title or interest hereunder by reason of any sale, assignment, transfer,
claim or judgment or bankruptcy proceedings against Executive; provided,
however, that in the event of Executive's death, Executive's estate, legal
representatives or beneficiaries (as the case may be) shall have the right to
receive all of the benefits that accrued to Executive pursuant to, and in
accordance with, the terms of this Agreement.

13.  SUCCESSOR

     This Agreement may be assigned by the Company to any successor interest to
its business. This Agreement shall bind and inure to the benefit of the
Company's successors and assigns as well.

14.  NOTICES

     All notices, requests and demands hereunder shall be in writing and
delivered by hand, by mail, or by telegram, and shall be deemed given if by hand
delivery, upon such delivery, and if by mail, 48 hours after deposit in the
United States mail, first class, registered or certified mail, postage prepaid
and properly addressed to the party at the address set forth at the beginning of
this Agreement. Any party may change its address for purposes of this paragraph
by giving the other party written notice of the new address in the manner set
forth above.

15.  INVALID PROVISIONS

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     Invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provision were
omitted.

16.  AMENDMENT, MODIFICATION OR REVOCATION

     This Agreement may be amended, modified or revoked in whole or in part, but
only by a written instrument which specifically refers to this Agreement and
expressly states that it constitutes an amendment, modification or revocation
hereof, as the case may be, and only if such written instrument has been signed
by each of the parties to this Agreement.

17.  HEADINGS

     The headings in this Agreement are inserted for convenience only and are
not to be considered in construction of the provisions hereof.

18.  ENTIRE AGREEMENT

     This Agreement contains the entire understanding among the parties and
supersedes any prior written or verbal agreements between them respecting the
subject matter hereof, including, without limitation, any prior verbal or
written employment agreement between Executive and the Company. Upon the
effectiveness hereof, any such prior verbal or written agreements shall
terminate.

     No representations or warranties of any kind or nature relating to the
Company or its affiliates or their respective businesses, assets, liabilities,
operations, future plans or prospects have been made by or on behalf of the
Company to Executive; nor have any representations or warranties of any kind or
nature been made by Executive to the Company, except as expressly set forth in
this Agreement.

19.  ATTORNEYS' FEES

     If any legal action is necessary to enforce the terms and conditions of
this Agreement, the prevailing party in such action shall be entitled to recover
all costs of suit and reasonable attorneys' fees as determined by the
arbitrator.

20.  FURTHER ASSURANCES

     The parties shall execute such documents and take such other action as is
necessary or appropriate to effectuate the provisions of this Agreement.

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21.  CONTROLLING LAW

     This Agreement shall be governed by the laws of the State of Delaware.

22.  WAIVER

     A waiver by either party of any of the terms and conditions hereof shall
not be construed as a general waiver by such party, and such party shall be free
to reinstate such part or clause, with or without notice to the other party.

23.  INDEMNIFICATION

     To the fullest extent permitted by law and the Company's Certificate of
Incorporation and Bylaws, the Company shall indemnify Executive for all amounts
(including, without limitation, judgments, fines, settlement payments, losses,
damages, costs and expenses, including reasonable attorneys fees, incurred or
paid by Executive in connection with any action, proceeding, suit or
investigation arising out of or relating to the performance by Executive of
services for, or acting as, an officer or employee of the Company or any
subsidiary thereof. The Company agrees to use its best efforts to maintain
directors' and officers' liability insurance.

24.  PERIODIC REVIEWS

     During January of each year during the term hereof, the Board of Directors
of the Company shall review Executive's Annual Salary, bonus, stock options, and
additional benefits then being provided to Executive. Following each such
review, the Company may in its discretion increase the Annual Salary, bonus,
stock options, and benefits; however, the Company shall not decrease such items
during the period Executive serves as an employee of the Company. Prior to
February 28th of each year during the term hereof, the Board of Directors of the
Company shall communicate in writing the results of such review to Executive.

THE COMPANY:                                 EXECUTIVE:

AVIATION DISTRIBUTORS, INC.

By:
   ----------------------------------        -----------------------------------
      Bruce H. Haglund, Secretary                     GARY L. JOSLIN

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                                   EXHIBIT 4.1

                             CALL TECHNOLOGIES, INC.

                 AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN,
                     AND FORMS OF AGREEMENTS USED THEREUNDER

<PAGE>

                             CALL TECHNOLOGIES, INC.

                              AMENDED AND RESTATED

                            1998 STOCK INCENTIVE PLAN

1)       PURPOSE

         The purpose of this Amended and Restated 1998 Stock Incentive Plan
(the "Plan") of Call Technologies, Inc., a Delaware corporation (the
"Company"), is to advance the interests of the Company's stockholders by
enhancing the Company's ability to attract, retain and motivate persons who
make (or are expected to make) important contributions to the Company by
providing such persons with equity ownership opportunities and
performance-based incentives and thereby better aligning the interests of such
persons with those of the Company's stockholders. Except where the context
otherwise requires, the term "Company" shall include any present or future
subsidiary corporations of Call Technologies, Inc. as defined in Section 424(f)
of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the "Code").

2)       ELIGIBILITY

         Employees of the Company, directors, consultants, affiliates and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options, restricted stock, or other stock-based awards
(each, an "Award") under the Plan provided that Incentive Stock Options shall
be granted only to employees of the Company. Any person who has been granted an
Award under the Plan shall be deemed a "Participant". Participation in the Plan
may be conditioned, in the Company's sole discretion, upon the execution and
delivery by the Participant of an Invention and Non-Disclosure Agreement prior
to any option grant pursuant to the Plan.

3)       ADMINISTRATION, DELEGATION

         a)   ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be
         administered by the Compensation Committee of the Board of Directors
         of the Company (the "Board"). The Board shall have authority to grant
         Awards and to adopt, amend and repeal such administrative rules,
         guidelines and practices relating to the Plan as it shall deem
         advisable. The Board may correct any defect, supply any omission or
         reconcile any inconsistency in the Plan or any Award in the manner and
         to the extent it shall deem expedient to carry the Plan into effect and
         it shall be the sole and final judge of such expediency. All decisions
         by the Board shall be made in the Board's sole discretion and shall be
         final and binding on all persons having or claiming any interest in the
         Plan or in any Award. No director or person acting pursuant to the
         authority delegated by the Board shall be liable for any action or
         determination relating to or under the Plan made in good faith.

         b)   DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by
         applicable law, the Board may delegate to one or more executive
         officers of the Company the power to make Awards and exercise such
         other powers under the Plan as the Board may determine, provided that
         the Board shall fix the maximum number of shares subject to Awards and
         the maximum number of shares for any one Participant to be made by such
         executive officers.

         c)   APPOINTMENT OF COMMITTEES. To the extent permitted by applicable
         law, the Board may delegate any or all of its powers under the Plan to
         one or more committees or subcommittees of the

                                       -1-
<PAGE>

         Board (a "Committee"). If and when the common stock, $0.01 par value
         per share, of the Company (the "Common Stock") is registered under the
         Securities Exchange Act of 1934 (the "Exchange Act"), the Board shall
         appoint one such Committee of not less than two members, each member
         of which shall be an "outside director" within the meaning of Section
         162(m) of the Code and a "non-employee director" as defined in Rule
         16b-3 promulgated under the Exchange Act." All references in the Plan
         to the "Board" shall mean the Board or a Committee of the Board or the
         executive officer referred to in Section 3(b) to the extent that the
         Board's powers or authority under the Plan have been delegated to such
         Committee or executive officer.

4)       STOCK AVAILABLE FOR AWARDS

         a)   NUMBER OF SHARES. Subject to adjustment under Section 4(c), Awards
         may be made under the Plan for up to 2,345,600 shares of Common Stock.
         If any Award expires or is terminated, surrendered or canceled without
         having been fully exercised or is forfeited in whole or in part or
         results in any Common Stock not being issued, the unused Common Stock
         covered by such Award shall again be available for the grant of Awards
         under the Plan, subject, however, in the case of Incentive Stock
         Options (as hereinafter defined), to any limitation required under the
         Code. Shares issued under the Plan may consist in whole or in part of
         authorized but unissued shares or treasury shares.

         b)   PER-PARTICIPANT LIMIT. Subject to adjustment under Section 4(c),
         for Awards granted after the Common Stock is registered under the
         Exchange Act, the maximum number of shares with respect to which an
         Award may be granted to any Participant under the Plan shall be
         500,000 per calendar year. The per-participant limit described in this
         Section 4(b) shall be construed and applied consistently with Section
         162(m) of the Code.

         c)   ADJUSTMENT TO COMMON STOCK. In the event of any stock split, stock
         dividend, recapitalization, reorganization, merger, consolidation,
         combination, exchange of shares, liquidation, spin-off or other similar
         change in capitalization or event, or any distribution to holders of
         Common Stock other than a normal cash dividend, (i) the number and
         class of securities available under this Plan, (ii) the number and
         class of security and exercise price per share subject to each
         outstanding Option, (iii) the repurchase price per security subject to
         each outstanding Restricted Stock Award, and (iv) the terms of each
         other outstanding stock-based Award shall be appropriately adjusted by
         the Company (or substituted Awards may be made, if applicable) to the
         extent the Board shall determine, in good faith, that such an
         adjustment (or substitution) is necessary and appropriate. If this
         Section 4(c) applies and Section 8(e)(1) also applies to any event,
         Section 8(e)(1) shall be applicable to such event, and this Section
         4(c) shall not be applicable.

5)       STOCK OPTIONS

         a)   GENERAL. The Board may grant options to purchase Common Stock
         (each, an "Option") and determine the number of shares of Common Stock
         to be covered by each Option, the exercise price of each Option and the
         conditions and limitations applicable to the exercise of each Option,
         including conditions relating to applicable federal or state securities
         laws, as it considers necessary or advisable. An Option which is not
         intended to be an Incentive Stock Option (as hereinafter defined) shall
         be designated a "Nonstatutory Stock Option".

                                       -2-
<PAGE>

         b)   INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
         "incentive stock option" as defined in Section 422 of the Code (an
         "Incentive Stock Option") shall only be granted to employees of the
         Company and shall be subject to and shall be construed consistently
         with the requirements of Section 422 of the Code. The Company shall
         have no liability to a Participant, or any other party, if an Option
         (or any part thereof) which is intended to be an Incentive Stock Option
         is not an Incentive Stock Option.

         c)   EXERCISE PRICE. The Board shall establish the exercise price at
         the time each Option is granted and specify it in the applicable option
         agreement.

         d)   DURATION OF OPTIONS. Each Option shall be exercisable at such
         times and subject to such terms and conditions as the Board may
         specify in the applicable option agreement, except that, in the case of
         an Incentive Stock Option, such Incentive Stock Option shall expire no
         later than ten years after the date on which it is granted and, in all
         cases, options shall be subject to earlier termination as provided in
         the Plan.

         e)   EXERCISE OF OPTION. Options may be exercised only by delivery to
         the Company of a written notice of exercise signed by the proper person
         together with payment in full as specified in Section 5(f) for the
         number of shares for which the Option is exercised.

         f)   PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of
         an Option granted under the Plan shall be paid for as follows:

         (i)   in cash or by check, payable to the order of the Company;

         (ii)  except as the Board may otherwise provide in an Option Agreement,
delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price, or delivery by the Participant to the Company of a copy of irrevocable
and unconditional instructions to a creditworthy broker to deliver promptly to
the Company cash or a check sufficient to pay the exercise price;

         (iii) to the extent permitted by the Board and explicitly provided in
an Option Agreement (i) by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery, (ii) by delivery of a combination of
cash equal to the par value of the Shares being purchased and a promissory note
of the Participant to the Company creating a binding obligation on the part of
Participant for the balance of the purchase price on terms determined by the
Board, or (iii) by payment of such other lawful consideration as the Board may
determine; or

         (iv)  any combination of the above permitted forms of payment.

6)       RESTRICTED STOCK

         a)   GRANTS. The Board may grant Awards entitling recipients to acquire
         shares of Common Stock, subject to the right of the Company to
         repurchase all or part of such shares at their issue price or other
         stated or formula price (or to require forfeiture of such shares to the
         extent payment has not been received) from the recipient in the event
         that conditions specified by the Board in the applicable Award are not
         satisfied prior to the end of the applicable restriction period or
         periods established by the Board for such Award (each, "Restricted
         Stock Award").

                                       -3-
<PAGE>

         b)   TERMS AND CONDITIONS. The Board shall determine the terms and
         conditions of any such Restricted Stock Award, including the conditions
         for repurchase (or forfeiture) and the issue price, if any. Any stock
         certificates issued in respect of a Restricted Stock Award shall be
         registered in the name of the Participant and, unless otherwise
         determined by the Board, deposited by the Participant, together with a
         stock power endorsed in blank, with the Company (or its designee). At
         the expiration of the applicable restriction periods, the Company (or
         such designee) shall deliver the certificates no longer subject to such
         restrictions to the Participant or if the Participant has died, to the
         beneficiary designated, in a manner determined by the Board, by a
         Participant to receive amounts due or exercise rights of the
         Participant in the event of the Participant's death (the "Designated
         Beneficiary"). In the absence of an effective designation by a
         Participant, Designated Beneficiary shall mean the Participant's
         estate.

7)       OTHER STOCK-BASED AWARDS

         The Board shall have the right to grant other Awards based upon the
Common Stock having such terms and conditions as the Board may determine,
including the grant of shares based upon certain conditions, the grant of
securities convertible into Common Stock and the grant of stock appreciation
rights.

8)       GENERAL PROVISIONS APPLICABLE TO AWARDS

         a)   TRANSFERABILITY OF AWARDS. Except as the Board may otherwise
         determine or provide in an Award, Awards shall not be sold, assigned,
         transferred, pledged or otherwise encumbered by the person to whom they
         are granted, either voluntarily or by operation of law, except by will
         or the laws of descent and distribution, and, during the life of the
         Participant, shall be exercisable only by the Participant. References
         to a Participant, to the extent relevant in the context, shall include
         references to authorized transferees.

         b)   DOCUMENTATION. Each Award under the Plan shall be evidenced by a
         written instrument in such form as the Board shall determine. Each
         Award may contain terms and conditions in addition to those set forth
         in the Plan.

         c)   BOARD DISCRETION. Except as otherwise provided by the Plan, each
         type of Award may be made alone or in addition or in relation to any
         other type of Award. The terms of each type of Award need not be
         identical, and the Board need not treat Participants uniformly.

         d)   TERMINATION OF STATUS. The Board shall determine the effect on an
         Award of the disability, death, retirement, authorized leave of absence
         or other change in the employment or other status of a Participant and
         the extent to which, and the period during which, the Participant, the
         Participant's legal representative, conservator, guardian or Designated
         Beneficiary may exercise rights under the Award.

         e)   ACQUISITION EVENTS

         (i)  CONSEQUENCES OF ACQUISITION EVENTS. Upon the occurrence of an
Acquisition Event (as defined below), each outstanding Option or Award shall be
assumed or an equivalent option or award substituted by the successor
corporation or a parent or subsidiary of the successor corporation, provided
that any such Options substituted for Incentive Stock Options shall satisfy, in
the determination of the Board, the requirements of Section 424(a) of the Code,
unless the successor corporation refuses to assume or substitute

                                       -4-
<PAGE>

for the Option or Award, in which case (i) the Participant shall have the right
to exercise the Option in full, including with respect to shares of Common
Stock as to which it would not otherwise be exercisable, (ii) all Restricted
Stock Awards then outstanding shall become free of all restrictions prior to
the consummation of the Acquisition Event; and (iii) any other stock-based
Awards outstanding shall become exercisable, realizable or vested in full, or
shall be free of all conditions or restrictions, as applicable to each such
Award, prior to the consummation of the Acquisition Event. If an Option or
Award is exercisable in lieu of assumption or substitution in the event of an
Acquisition Event, the Board shall notify the Participant in writing or
electronically that the Option or Award shall be fully exercisable for a period
of not less than forty-five (45) days from the date of such notice, and the
Option or Award shall terminate upon the expiration of such period.

         Each Option or other Award assumed or substituted pursuant to the
immediately preceding paragraph shall include a provision to the effect that
such Option or Award shall become immediately exercisable (or vested) in full
if, on or prior to the first anniversary of the Acquisition Event, the
Participant terminates his or her employment for Good Reason or is terminated
without Cause by the surviving or acquiring corporation. "Good Reason" shall
mean any significant diminution in the optionee's title, authority, or
responsibilities from and after such Acquisition Event or any reduction in the
annual cash compensation payable to the Participant from and after such
Acquisition Event, or the relocation of the Company's place of business at
which the Participant is principally located to a location that is greater than
50 miles from the current site. "Cause" shall mean any willful misconduct by
the Participant which affects the business reputation of the Company or willful
failure by the Participant to perform his or her material responsibilities to
the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company). The Participant shall be considered to have been discharged for
"Cause" if the Company determines, within 30 days after the Participant's
resignation, that discharge for Cause was warranted.

         An "Acquisition Event" shall mean: (a) any merger or consolidation
which results in the voting securities of the Company outstanding immediately
prior thereto representing immediately thereafter (either by remaining
outstanding or by being converted into voting securities of the surviving or
acquiring entity) less than 50% of the combined voting power of the voting
securities of the Company or such surviving or acquiring entity outstanding
immediately after such merger or consolidation; (b) any sale of all or
substantially all of the assets of the Company; or (c) the complete liquidation
of the Company.

         (ii)  ASSUMPTION OF OPTIONS UPON CERTAIN EVENTS. The Board may grant
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a
result of a merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and
conditions as the Board considers appropriate in the circumstances.

         f)    WITHHOLDING. Each Participant shall pay to the Company, or make
         provision satisfactory to the Board for payment of, any taxes required
         by law to be withheld in connection with Awards to such Participant no
         later than the date of the event creating the tax liability. The Board
         may allow Participants to satisfy such tax obligations in whole or in
         part in shares of Common Stock, including shares retained from the
         Award creating the tax obligation, valued at their Fair Market Value.
         The Company may, to the extent permitted by law, deduct any such tax
         obligations from any payment of any kind otherwise due to a
         Participant.

                                       -5-
<PAGE>

         g)    AMENDMENT OF AWARD. The Board may amend, modify or terminate any
         outstanding Award, including but not limited to, substituting therefor
         another Award of the same or a different type, changing the date of
         exercise or realization, and converting an Incentive Stock Option to a
         Nonstatutory Stock Option, provided that the Participant's consent to
         such action shall be required unless the Board determines that the
         action, taking into account any related action, would not materially
         and adversely affect the Participant.

         h)    CONDITIONS ON DELIVERY OF STOCK. The Company will not be
         obligated to deliver any shares of Common Stock pursuant to the Plan or
         to remove restrictions from shares previously delivered under the Plan
         until (i) all conditions of the Award have been met or removed to the
         satisfaction of the Company, (ii) in the opinion of the Company's
         counsel, all other legal matters in connection with the issuance and
         delivery of such shares have been satisfied, including any applicable
         securities laws and any applicable stock exchange or stock market rules
         and regulations, and (iii) the Participant has executed and delivered
         to the Company such representations or agreements as the Company may
         consider appropriate to satisfy the requirements of any applicable
         laws, rules or regulations.

         i)    ACCELERATION. The Board may at any time provide that any Options
         shall become immediately exercisable in full or in part, that any
         Restricted Stock Awards shall be free of all restrictions or that any
         other stock-based Awards may become exercisable in full or in part or
         free of some or all restrictions or conditions, or otherwise realizable
         in full or in part, as the case may be.

9)       MISCELLANEOUS

         a)    NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any
         claim or right to be granted an Award, and the grant of an Award shall
         not be construed as giving a Participant the right to continued
         employment or any other relationship with the Company. The Company
         expressly reserves the right at any time to dismiss or otherwise
         terminate its relationship with a Participant free from any liability
         or claim under the Plan, except as expressly provided in the applicable
         Award.

         b)    NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
         applicable Award, no Participant or Designated Beneficiary shall have
         any rights as a stockholder with respect to any shares of Common Stock
         to be distributed with respect to an Award until becoming the record
         holder of such shares.

         c)    EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective
         on the date on which it is adopted by the Board but no option granted
         under the Plan shall become exercisable unless and until the Plan shall
         have been approved by the Company's shareholders. If such shareholder
         approval is not obtained within twelve months after the date of the
         Board's adoption of the Plan, options previously granted under the Plan
         shall not vest and shall terminate and no options shall be granted
         thereafter. No Awards shall be granted under the Plan after the
         completion of ten years from the earlier of (i) the date on which the
         Plan was adopted by the Board or (ii) the date the Plan was approved by
         the Company's stockholders, but Awards previously granted may extend
         beyond that date.

         d)    AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
         Plan or any portion thereof at any time, except that if at any time the
         approval of shareholders is required under Section 422 of the Code or
         any successor provision with respect to Incentive Stock Options, or
         under Rule 16b-3, the Board of Directors may not effect such
         modification or amendment without such approval.

                                       -6-
<PAGE>

         e)    GOVERNING LAW. The provisions of the Plan and all Awards made
         hereunder shall be governed by and interpreted in accordance with the
         laws of the State of Delaware, without regard to any applicable
         conflicts of law.

Approved and adopted by the Board of Directors
on February 17, 1998.

Amended by the Board of Directors on October 8, 1998.

Amended and Restated by the Board of Directors
on December 10, 1998.

Approved by a majority of the Stockholders
on or about February 11, 1999.

                                       -7-

<PAGE>

                             CALL TECHNOLOGIES, INC.

                        Incentive Stock Option Agreement

                     GRANTED UNDER 1998 STOCK INCENTIVE PLAN

1.       GRANT OF OPTION.

         This agreement evidences the grant by Call Technologies, Inc., a
Delaware corporation (the "Company") on ___________ to _______________, an
employee of the Company (the "Participant"), of an option to purchase, in whole
or in part, on the terms provided herein and in the Company's 1998 Stock
Incentive Plan (the "Plan"), a total of ______ shares of common stock, $0.01
par value per share, of the Company ("Common Stock") (the "Shares") at $_____
per Share. Unless earlier terminated, this option shall expire ten (10) years
from the date hereof (the "Final Exercise Date").

         It is intended that the option evidenced by this agreement shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code
of 1986, as amended and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used
in this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.

2.       VESTING SCHEDULE.

         This option will become exercisable ("vest") as to 25% of the original
number of Shares on the first anniversary of the commencement date of the
vesting period (the "Vesting Commencement") and as to an additional 6.25% of
the original number of Shares at the end of each successive full calendar
quarter following the first anniversary of the Vesting Commencement Date until
the fourth anniversary of the Vesting Commencement Date. This option shall
expire upon, and will not be exercisable after, the Final Exercise Date. The
Vesting Commencement Date for this option shall be ___________.

         The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it
shall continue to be exercisable, in whole or in part, with respect to all
shares for which it is vested until the earlier of the Final Exercise Date or
the termination of this option under Section 3 hereof or the Plan.

3.       EXERCISE OF OPTION.

              (1)   FORM OF EXERCISE. Each election to exercise this option
shall be in writing, signed by the Participant, and received by the Company at
its principal office, accompanied by this agreement, and payment in full (i) by
delivery of shares of Common Stock owned by the Participant valued at their
fair market value as determined by the Board in good faith (the "Fair Market
Value"), which Common Stock was owned by the Participant at least six months
prior to such delivery; (ii) by delivery of a combination of cash equal to the
par value of the shares being purchased and a promissory note of the
Participant to the Company creating a binding obligation on the part of the
Participant for the balance of the purchase price on terms determined by the
Board; or (iii) by payment of such other lawful consideration as the Board may
determine.

                                       -1-
<PAGE>

The Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional
share or for fewer than ten whole shares.

              (2)   CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except
as otherwise provided in this Section 3, this option may not be exercised
unless the Participant, at the time he or she exercises this option, is, and
has been at all times since the date of grant of this option, an employee of,
or consultant or advisor to, the Company or any parent or subsidiary of the
Company as defined in Section 424(e) or (f) of the Code (an "Eligible
Participant").

              (3)   TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the
Participant ceases to be an Eligible Participant for any reason, then, except
as provided in paragraphs (d) and (e) below, the right to exercise this option
shall terminate three months after such cessation (but in no event after the
Final Exercise Date), PROVIDED THAT this option shall be exercisable only to
the extent that the Participant was entitled to exercise this option on the
date of such cessation. Notwithstanding the foregoing, if the Participant,
prior to the Final Exercise Date, violates the non-competition or
confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Participant and the
Company, the right to exercise this option shall terminate immediately upon
such violation.

              (4)   EXERCISE PERIOD UPON DEATH OR DISABILITY. If the
Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of
the Code) prior to the Final Exercise Date while he or she is an Eligible
Participant and the Company has not terminated such relationship for "cause" as
specified in paragraph (e) below, this option shall be exercisable, within the
period of one year following the date of death or disability of the Participant
by the Participant, PROVIDED THAT this option shall be exercisable only to the
extent that this option was exercisable by the Participant on the date of his
or her death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.

              (5)   DISCHARGE FOR CAUSE. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean willful misconduct by the
Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination
shall be conclusive. The Participant shall be considered to have been
discharged for "Cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for cause was warranted.

4.       RIGHT OF FIRST REFUSAL.

         (a)  If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant
proposes to transfer (the "Offered Shares"), the price per share and all other
material terms and conditions of the transfer.

         (b)  For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer
Notice. In the event the Company elects to purchase all of the Offered Shares,
it shall give written

                                       -2-
<PAGE>

notice of such election to the Participant within such 30-day period. Within 10
days after his receipt of such notice, the Participant shall tender to the
Company at its principal offices the certificate or certificates representing
the Offered Shares, duly endorsed in blank by the Participant or with duly
endorsed stock powers attached thereto, all in a form suitable for transfer of
the Offered Shares to the Company. Upon receipt of such certificate or
certificates, the Company shall deliver or mail to the Participant a check in
payment of the purchase price for the Offered Shares; provided THAT if the
terms of payment set forth in the Transfer Notice were other than cash against
delivery, the Company may pay for the Offered Shares on the same terms and
conditions as were set forth in the Transfer Notice.

         (c)  At and after the time at which the Offered Shares are required to
be delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Participant on account
of such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.

         (d)  If the Company does not elect to acquire all of the Offered
Shares, the Participant may, within the 30-day period following the expiration
of the option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, PROVIDED THAT such transfer shall
not be on terms and conditions more favorable to the transferee than those
contained in the Transfer Notice. Notwithstanding any of the above, all Offered
Shares transferred pursuant to this Section 4 shall remain subject to the right
of first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.

         (e)  The following transactions shall be exempt from the provisions of
this Section 4:

              (1)   any transfer of Shares to or for the benefit of any spouse,
parent, child or grandchild of the Participant, or to a trust for their benefit;

              (2)   any transfer pursuant to an effective registration
statement filed by the Company under the Securities Act of 1933, as amended
(the "Securities Act"); and

              (3)   any transfer of the Shares pursuant to the sale of all or
substantially all of the business of the Company;

PROVIDED, HOWEVER, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to the right of first refusal set forth in
this Section 4 and such transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such transferee
shall be bound by all of the terms and conditions of this Section 4.

         (f)  The Company may assign its rights to purchase Offered Shares in
any particular transaction under this Section 4 to one or more persons or
entities.

         (g)  The provisions of this Section 4 shall terminate upon the earlier
of the following events:

              (1)   the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or

                                       -3-
<PAGE>

              (2)   the sale of all or substantially all of the capital stock,
assets or business of the Company, by merger, consolidation, sale of assets or
otherwise.

         (h)  The Company shall not be required (a) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.

5.       AGREEMENT IN CONNECTION WITH PUBLIC OFFERING.

         The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration
statement under the Securities Act, (i) not to sell, make short sale of, loan,
grant any options for the purchase of, or otherwise dispose of any shares of
Common Stock held by the Participant (other than those shares included in the
offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company's securities
for a period of 180 days from the effective date of such registration
statement, and (ii) to execute any agreement reflecting clause (i) above as may
be requested by the Company or the managing underwriters at the time of such
offering.

6.       WITHHOLDING.

         No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision
satisfactory to the Company for payment of, any federal, state or local
withholding taxes required by law to be withheld in respect of this option. The
Participant may satisfy such tax obligations in whole or in part in shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their Fair Market Value.

7.       NONTRANSFERABILITY OF OPTION.

         This option may not be sold, assigned, transferred, pledged or
otherwise encumbered by the Participant, either voluntarily or by operation of
law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the
Participant.

8.       DISQUALIFYING DISPOSITION.

         If the Participant disposes of Shares acquired upon exercise of this
option within two years from the date of grant of the option or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.

9. PROVISIONS OF THE PLAN.

         This option is subject to the provisions of the Plan, a copy of which
is furnished to the Participant with this option.

                                       -4-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.

                                                 CALL TECHNOLOGIES, INC.

Dated: _________                                 By: ___________________________

                                                 Name: _________________________

                                                 Title: ________________________

                                       -5-
<PAGE>

                            PARTICIPANT'S ACCEPTANCE

          The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1998 Stock Incentive Plan.

                                  PARTICIPANT:

                                  -------------------------------------------

                                  Address: __________________________________

                                           __________________________________

                                           __________________________________

                                       -6-

<PAGE>

                             CALL TECHNOLOGIES, INC.

                       Nonstatutory Stock Option Agreement

                     GRANTED UNDER 1998 STOCK INCENTIVE PLAN

1.       GRANT OF OPTION.

         This agreement evidences the grant by Call Technologies, Inc., a
Delaware corporation (the "Company") on ________________ to _______________, a
_____________ of the Company (the "Participant"), of an option to purchase, in
whole or in part, on the terms provided herein and in the Company's 1998 Stock
Incentive Plan (the "Plan"), a total of _________ shares of common stock, $0.01
par value per share, of the Company ("Common Stock") (the "Shares") at $______
per Share. Unless earlier terminated, this option shall expire on
_________________ (the "Final Exercise Date").

         It is intended that the option evidenced by this agreement shall not
be an incentive stock option as defined in Section 422 of the Internal Revenue
Code of 1986, as amended and any regulations promulgated thereunder (the
"Code"). Except as otherwise indicated by the context, the term "Participant",
as used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.

2.       VESTING SCHEDULE.

         This option will become exercisable ("vest") as to 25% of the original
number of Shares on the first anniversary of the commencement date of the
vesting period (the "Vesting Commencement") and as to an additional 6.25% of
the original number of Shares at the end of each successive full calendar
quarter following the first anniversary of the Vesting Commencement Date until
the fourth anniversary of the Vesting Commencement Date. This option shall
expire upon, and will not be exercisable after, the Final Exercise Date. The
Vesting Commencement Date for this option shall be ___________________.

         The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it
shall continue to be exercisable, in whole or in part, with respect to all
shares for which it is vested until the earlier of the Final Exercise Date or
the termination of this option under Section 3 hereof or the Plan.

3.       EXERCISE OF OPTION.

         (1)  FORM OF EXERCISE. Each election to exercise this option shall be
in writing, signed by the Participant, and received by the Company at its
principal office, accompanied by this agreement, and payment in full (i) by
delivery of shares of Common Stock owned by the Participant valued at their
fair market value as determined by the Board in good faith (the "Fair Market
Value"), which Common Stock was owned by the Participant at least six months
prior to such delivery; (ii) by delivery of a combination of cash equal to the
par value of the shares being purchased and a promissory note of the
Participant to the Company creating a binding obligation on the part of the
Participant for the balance of the purchase price on terms determined by the
Board; or (iii) by payment of such other lawful consideration as the Board may
determine. The Participant may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share or for fewer than ten whole shares.

                                       -1-
<PAGE>

         (2)  CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, an employee of, or
consultant or advisor to, the Company or any parent or subsidiary of the
Company as defined in Section 424(e) or (f) of the Code (an "Eligible
Participant").

         (3)  TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided
in paragraphs (d) and (e) below, the right to exercise this option shall
terminate three months after such cessation (but in no event after the Final
Exercise Date), PROVIDED THAT this option shall be exercisable only to the
extent that the Participant was entitled to exercise this option on the date of
such cessation. Notwithstanding the foregoing, if the Participant, prior to the
Final Exercise Date, violates the non-competition or confidentiality provisions
of any employment contract, confidentiality and nondisclosure agreement or
other agreement between the Participant and the Company, the right to exercise
this option shall terminate immediately upon such violation.

         (4)  EXERCISE PERIOD UPON DEATH OR DISABILITY. If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant, PROVIDED THAT this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.

         (5)  DISCHARGE FOR CAUSE. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as defined below), the
right to exercise this option shall terminate immediately upon the effective
date of such discharge. "Cause" shall mean willful misconduct by the
Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the
Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination
shall be conclusive. The Participant shall be considered to have been
discharged for "Cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for cause was warranted.

4.       RIGHT OF FIRST REFUSAL.

         (1)  If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the Participant
proposes to transfer (the "Offered Shares"), the price per share and all other
material terms and conditions of the transfer.

         (2)  For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer
Notice. In the event the Company elects to purchase all of the Offered Shares,
it shall give written notice of such election to the Participant within such
30-day period. Within 10 days after his receipt of such notice, the Participant
shall tender to the Company at its principal offices the certificate or
certificates representing the Offered Shares, duly endorsed in blank by the
Participant or with duly endorsed stock powers

                                       -2-
<PAGE>

attached thereto, all in a form suitable for transfer of the Offered Shares to
the Company. Upon receipt of such certificate or certificates, the Company
shall deliver or mail to the Participant a check in payment of the purchase
price for the Offered Shares; provided THAT if the terms of payment set forth
in the Transfer Notice were other than cash against delivery, the Company may
pay for the Offered Shares on the same terms and conditions as were set forth
in the Transfer Notice.

         (3)  At and after the time at which the Offered Shares are required to
be delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Participant on account
of such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.

         (4)  If the Company does not elect to acquire all of the Offered
Shares, the Participant may, within the 30-day period following the expiration
of the option granted to the Company under subsection (b) above, transfer the
Offered Shares to the proposed transferee, PROVIDED THAT such transfer shall
not be on terms and conditions more favorable to the transferee than those
contained in the Transfer Notice. Notwithstanding any of the above, all Offered
Shares transferred pursuant to this Section 4 shall remain subject to the right
of first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.

         (5)  The following transactions shall be exempt from the provisions of
this Section 4:

              (1)   any transfer of Shares to or for the benefit of any spouse,
parent, child or grandchild of the Participant, or to a trust for their benefit;

              (2)   any transfer pursuant to an effective registration
statement filed by the Company under the Securities Act of 1933, as amended
(the "Securities Act"); and

              (3)   any transfer of the Shares pursuant to the sale of all or
substantially all of the business of the Company;

PROVIDED, HOWEVER, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to the right of first refusal set forth in
this Section 4 and such transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such transferee
shall be bound by all of the terms and conditions of this Section 4.

         (6)  The Company may assign its rights to purchase Offered Shares in
any particular transaction under this Section 4 to one or more persons or
entities.

         (7)  The provisions of this Section 4 shall terminate upon the earlier
of the following events:

              (1)   the closing of the sale of shares of Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed by the Company under the Securities Act; or

              (2)   the sale of all or substantially all of the capital stock,
assets or business of the Company, by merger, consolidation, sale of assets or
otherwise.

                                       -3-
<PAGE>

         (h)  The Company shall not be required (a) to transfer on its books
any of the Shares which shall have been sold or transferred in violation of any
of the provisions set forth in this Section 4, or (b) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.

5.       AGREEMENT IN CONNECTION WITH PUBLIC OFFERING.

         The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration
statement under the Securities Act, (i) not to sell, make short sale of, loan,
grant any options for the purchase of, or otherwise dispose of any shares of
Common Stock held by the Participant (other than those shares included in the
offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company's securities
for a period of 180 days from the effective date of such registration
statement, and (ii) to execute any agreement reflecting clause (i) above as may
be requested by the Company or the managing underwriters at the time of such
offering.

6.       WITHHOLDING.

         No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision
satisfactory to the Company for payment of, any federal, state or local
withholding taxes required by law to be withheld in respect of this option. The
Participant may satisfy such tax obligations in whole or in part in shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their Fair Market Value.

7.       NONTRANSFERABILITY OF OPTION.

         This option may not be sold, assigned, transferred, pledged or
otherwise encumbered by the Participant, either voluntarily or by operation of
law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the
Participant.

8. PROVISIONS OF THE PLAN.

         This option is subject to the provisions of the Plan, a copy of which
is furnished to the Participant with this option.

                                       -4-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.

                                         CALL TECHNOLOGIES, INC.

Dated: ____________________                     By: ____________________________
                                                Name:
                                                Title:

                                       -5-
<PAGE>

                            PARTICIPANT'S ACCEPTANCE

         The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1998 Stock Incentive Plan.

                                  PARTICIPANT:

                                   ---------------------------------------

                                   Address:   ____________________________

                                              ____________________________

                                              ____________________________

                                       -6-

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