Document:

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EXHIBIT 10.64

February 14, 2005

CONFIDENTIAL
------------
Mr. Robert Tarini
Chairman & CEO
Technest Holdings, Inc.
90 Grove Street
Ridgefield, CT 06877

         This letter agreement (this "Agreement") confirms the engagement of
Greenfield Capital Partners, LLC., a Delaware limited liability company
("GREENFIELD") by Technest Holdings, Inc., (the "COMPANY") to act as: (i) the
Company's exclusive placement agent ("PLACEMENT AGENT") to arrange the issuance
by the Company of debt securities (including, without limitation, senior or
subordinated debt, secured or unsecured debt, or bank debt) ("Debt"), equity
securities or any securities (including debt securities, preferred stock or
warrants) convertible or exercisable into, or exchangeable for, equity
securities (collectively, "EQUITY SECURITIES" and, together with Debt,
"SECURITIES"), and (ii) the Company's exclusive financial advisor ("FINANCIAL
ADVISOR") to perform the following financial advisory and investment banking
services:

                  (a) assisting the Company in analyzing its business,
operations, properties, financial condition and prospects and/or analyzing the
business, operations, properties, financial conditions and prospects of a third
party entity;

                  (b) assisting the Company in preparation of materials
(including a private placement memorandum) describing the Company for
distribution and presentation to parties that might be interested in a Financing
or a transaction on behalf of the Company (it being understood that all such
materials shall be the responsibility of the Company);

                  (c) advising the Company as to strategy and tactics for
negotiations related to a financing or a transaction and, if requested by the
Company, participating in such negotiations;

                  (d) assisting and advise the Company with respect to the form
and structure of a financing or a transaction, including financing alternatives,
and with the preparation of letters of intent or term sheets relating to a
financing Or a transaction; and

                  (e) rendering such other financial advisory and investment
banking services as may from time to time be agreed upon in writing by
Greenfield and the Company,

The sale of Securities (a "FINANCING" or "FINANCINGS") may occur through a
private placement pursuant to one or more exemptions from registration under the
Securities Act of 1933, as amended (the "SECURITIES Act"), and in compliance
with applicable state securities laws ("BLUE SKY LAWS").

         1. RETENTION. (a) Subject to the terms and conditions of this
Agreement, the Company hereby engages Greenfield to act on behalf of the
Company: (i) as its exclusive Placement Agent during the Authorization Period
(as defined in Section 2 below) to arrange for the sale of Securities in an
amount and on terms and conditions satisfactory to the Company, and (ii) to act
as its exclusive Financial Advisor during the Authorization Period with respect
to a Transaction (as defined in Section 4(c) below), and Greenfield hereby
accepts such engagement on the terns and conditions hereof. During the
Authorization Period, except for Greenfield; the Company will not retain or
consult with any person or entity to provide such services to the Company or any
of its subsidiaries or affiliates.

                  (b) To the extent Greenfield is requested by the Company to
perform any financial advisory or investment banking services which are not
within the scope of this Agreement as described herein (such as rendering a
fairness opinion), the payment of any fees to Greenfield in respect of such
services shall be mutually agreed upon by Greenfield and the Company in writing,
IN advance, depending on the level and type of services required, and shall be
in addition to the fees and expenses described herein. Except as set forth in
the immediately preceding sentence, if Greenfield is legally required to render
services directly or indirectly relating to the subject matter of this Agreement
(including, but not limited to, producing documents, answering interrogatories,
giving depositions, giving expert or other

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testimony, and whether by subpoena, court process or order or otherwise), the
Company shall pay Greenfield's then current hourly rates for the persons
involved by the time expended in rendering such services, including, but not
Limited to, time for meetings, conferences, preparation and travel, and all
related reasonable out-of-pocket costs and expenses, and the reasonable legal
fees and expenses of Greenfield's legal counsel incurred in connection
therewith.

          2. AUTHORIZATION PERIOD. Greenfield's engagement under this Agreement
shall become effective on the date of this Agreement and, unless extended by the
Company and Greenfield in writing, shall expire one hundred eighty days (180
days) after the date of this Agreement or terminated earlier as provided for
herein ("AUTHORIZATION PERIOD"). Greenfield shall be entitled to terminate its
engagement hereunder at any time upon ten (10) days prior written notice to the
Company. The Company agrees that neither it, its controlling equity holders, nor
its management will initiate any discussions regarding a Financing or a
Transaction with any prospective investor in Securities or any Person (as
defined below) during the term of this Agreement; except through Greenfield. In
the event the Company or the Company's management receive any inquiry regarding
a Financing or a Transaction ON or after the effective date of this agreement,
Greenfield will be promptly informed of such inquiry so that they can evaluate
investor or Person party and its interest in a Financing or a Transaction; and
assist the Company in any resulting negotiations. For purposes of this
Agreement, "PERSON" shall mean any natural person, corporation, unincorporated
organization, partnership, limited liability company, association, joint stock
company, joint venture, trust or government or any agency or political
subdivision of any government or any other entity.

           3. COMPENSATION FOR FINANCING. Upon the closing of a Financing THE
Company shall pay Greenfield the compensation set forth below:

                  (a) CASH FEE FOR EQUITY FINANCING. The Company shall pay
Greenfield a cash placement fee equal to ten percent (10.0%) of any gross
proceeds received by the Company in connection with the portion of any Financing
placed by Greenfield in which Equity Securities are issued by the Company (an
"EQUITY FINANCING"). In addition, the Company shall pay to Greenfield a
non-accountable cash allowance of three percent (3.0%) of any gross proceeds
received by the Company in connection with any Equity Financing. Both the cash
placement fee and cash allowance shall apply to the financing transaction
involving Genex Technologies, Inc. that was initiated prior to this agreement.
The cash placement fee and the non-accountable cash allowance shall be paid by
wire transfer on the closing of the financing (and such payment shall be a
condition of the closing), except with respect to consideration which is
contingent upon the occurrence of some future event which shall be paid by the
Company to Greenfield upon receipt of such consideration by the Company,
Greenfield shall act as solicitation agent on behalf of the Company in
connection with the exercise of warrants ("INVESTOR WARRANTS") issued to any
investors in connection with a Financing and shall pay Greenfield a cash fee of
thirteen percent (13.0%) of the gross proceeds received by the Company in
connection with the exercise of such Investor Warrants.

                  (b) CASH FEES FOR DEBT FINANCING. The Company shall pay
Greenfield a cash placement fee equal to ten percent (10%) of any gross proceeds
received by the Company in connection with any debt financing by the Company
including the issuance of Debt Securities which are not convertible or
exchangeable into equity security (a "DEBT FINANCING"), In addition, the Company
shall pay to Greenfield a non-accountable cash allowance of three percent (3.0%)
on any gross proceeds received by the Company in connection with any Debt
Financing. In the case of a committed Debt Financing, the placement fee will be
calculated based on the aggregate amount committed to the Company from investors
in the Debt Financing. The cash placement fee shall be paid by wire transfer on
the closing of the Debt Financing (and such payment shall be a condition of the
closing).

          4. TAIL PERIOD. The Company shall, and shall cause its affiliates to,
pay to Greenfield all compensation described in Section 3 with respect to all
Securities sold to an investor or investors and with respect to any Transaction
entered into with any Person at any time prior to the expiration of two (2)
years after the expiration of the Authorization Period (the "TAIL PERIOD") if
(i) such investor or investors (or their affiliates) were identified in writing
to the Company by Greenfield during the Authorization Period, or (ii) upon
written request of the Company, Greenfield advised the Company with respect TO
such investor or investors during the Authorization Period, or (iii) a closing
of a Transaction occurs within six (6) months following the expiration of the
Tail Period.

         5. REIMBURSEMENTS. If a sale of Securities to be placed by Greenfield
(and otherwise acceptable to the Transaction is not consummated by the Company
during the Authorization Period due to (i) the

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occurrence of an event which is reasonably likely to have a material adverse
effect on the business, financial condition, results of operations or future
prospects of the Company, or (ii) Greenfield discovers facts or events which a
reasonable person engaged in the business of investment banking is likely to
conclude that reports or registration statements filed by the Company, or other
public disclosure made by the Company contains an untrue statement of material
fact or omits to state material facts which should have been disclosed therein,
the Company shall reimburse Greenfield for all of its reasonable out-of-pocket
expenses, not to exceed $50,000, incurred in connection with its engagement,
including the fees and disbursements of counsel for Greenfield and the expenses
of any travel that may be necessary, upon provision of reasonable documentation
of such expenses. If any Financing or Transaction is consummated, the
non-accountable cash allowance set forth in Section 3(a) and Section 4(a) hereof
shall constitute payment of all such expenses TO the extent paid by the Company
and no additional obligation with respect to such expenses shall exist.

         6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company represents, warrants, and covenants to Greenfield as follows:

                  (a) Neither the Company nor any person acting on its behalf
has taken, and the Company shall not and shall not permit its affiliates to
take, directly or indirectly, any action so as to cause any of the transactions
contemplated by this Agreement to not be exempt from registration or
qualification under all applicable securities laws or which constitutes general
advertising or general solicitation (as those terms are used in Regulation D
under the Securities Act) with respect to the Securities.

                  (b) The Company shall take and shall cause its affiliates to
take such actions as may be required to comply with this Agreement in all
respects.

                  (c) The Company will furnish, or cause to be furnished, to
Greenfield such information as Greenfield believes necessary or appropriate to
its engagement hereunder (all such information, the "INFORMATION"), and the
Company represents that all such Information will be accurate and complete in
all material respects. The Company will promptly notify Greenfield of any change
that may be material to such information. It is understood that Greenfield will
be entitled to rely on and use the Information and other information that is
publicly available without independent verification, and will not be responsible
in any respect for the accuracy, completeness or reasonableness of all such
information or to conduct any independent verification or any appraisal or
physical inspection of properties or assets. The Company acknowledges that
Greenfield has not made and is not making any independent evaluation of the
Company or its assets in performing services hereunder as the Company's
Placement Agent or Financial Advisor.

         7. INDEMNIFICATION. The Company agrees to the indemnification
provisions and other agreements set forth on SCHEDULE A attached hereto and made
a part hereof, all of the provisions of which are incorporated herein by
reference and made a part of this Agreement as if set forth in full herein.

         8. ADVERTISEMENTS. The Company agrees that Greenfield has the right to
place advertisements in financial and other newspapers, journals, websites or
otherwise publicize, at its option and expense, describing its services to the
Company hereunder to the extent such services result in a consummated Financing
or Transaction, including, without limitation; the reproduction of the Company's
logo and a hyperlink to the Company's website. The foregoing shall also include
placement of a tombstone on the corporate website of Greenfield. If requested by
Greenfield, the Company shall include a mutually acceptable reference to
Greenfield in any press release or other public announcement made by the Company
regarding the matters described in this Agreement. The Company agrees that it
shall not use Greenfield's name, nor the name of any of its employees,
representatives or affiliates in any public manner without the prior written
consent from Greenfield, which consent shall not be unreasonably withheld.

         9, CERTAIN PROVISIONS. Greenfield's rights to compensation (which term
includes all fees, amounts and Placement Agent Warrants or Debt Placement Agent
Warrants due or which may become due) shall remain operative and in full force
and effect regardless of (i) any withdrawal, termination or consummation of or,
in the case of the expense, indemnification, reimbursement, advertisements, and
contribution obligations of the Company, failure to initiate or consummate any
transaction described herein or (ii) any termination or the completion or
expiration of this Agreement.

         10.0 NOTICES. All notices, demands, consents, requests, instructions
and other communications to be given or delivered or permitted under or by
reason of the provisions of this Agreement or in connection with the
transactions contemplated hereby shall be in writing and shall be deemed to be
delivered and received by the

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Greenfield Capital Partners LLC

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intended recipient as follows: (a) if personally delivered, on the business day
of such delivery (as evidenced by the receipt of the personal delivery service),
(b) if mailed certified or registered mail return receipt requested, four (4)
business days after being mailed, (c) if delivered by overnight courier (with
all charges having been prepaid), on the business day of such delivery (as
evidenced by the receipt of the overnight courier service of recognized
standing), or (d) if delivered by facsimile transmission, on the business day of
such delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent
after that time, on the next succeeding business day (as evidenced by the
printed confirmation of delivery generated by the sending party's facsimile
machine). If any notice, demand, consent, request, instruction or other
communication cannot be delivered because of a changed address of which no
notice was given (in accordance with this section, or the refusal to accept
same, the notice, demand, consent, request, instruction or other communication
shall be deemed received on the second business day the notice is sent (as
evidenced by a sworn affidavit of the sender). All such notices, demands,
consents, requests, instructions and other communications will be sent to the
following addresses or facsimile numbers as applicable:

If to the Company, to:
                          Technest Holdings, Inc.
                          90 Grove street
                          Ridgefield, CT 06877
                          Facsimile No:
                          Attn.: Robert Tarini

If to Greenfield, to:
                           Greenfield Capital Partners LLC
                           90 Grove Street
                           Ridgefield, CT 06877
                           Facsimile No.: 203-431-8309
                           Attn,: Michael Byl

or to such other address as any party may specify by notice given to the other
party in accordance with this section,

         11. CONFIDENTIALITY. No financial advice rendered by Greenfield
pursuant to or in connection with this Agreement may be disclosed publicly in
any manner without Greenfield's prior written consent, except as may be required
by applicable law, regulation or court order but subject to the limitation
below. If the Company is required or reasonably expects to be so required to
disclose any such advice, the Company shall provide Greenfield with prompt
notice thereof so that Greenfield may seek a protective order or other
appropriate remedy and take reasonable efforts to assure that all of such advice
disclosed will be covered by such order or other remedy, and the Company will
cooperate with Greenfield in obtaining such protective order or other
appropriate remedy. Whether or not such a protective order or other remedy is
obtained, the Company will and will cause its affiliates to disclose only that
portion of such advice which the Company is so required to disclose.

         12. INDEPENDENT CONTRACTOR. Greenfield shall be an independent
contractor in providing its Placement Agent and Financial Advisor services
hereunder. Nothing contained in this Agreement shall be deemed or construed to
create a partnership or joint venture, to create the relationships of
principal/agent, employer/employee, or otherwise create any fiduciary duty or
any liability whatsoever of either party with respect to the indebtedness,
liabilities, obligations or actions of the other party or any of their employees
or agents, or any other person or entity, Greenfield shall not have any right to
legally bind or otherwise obligate the Company in any manner whatsoever-

         13. MISCELLANEOUS.

                  (a) ATTORNEYS' FEES. If any party to this Agreement brings an
action directly or indirectly based upon this Agreement or the matters
contemplated hereby against another party, the prevailing party shall be
entitled to

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recover, in addition to any other appropriate amounts, its reasonable costs and
expenses in connection with such proceeding, including, but not limited to,
reasonable attorneys' fees and expenses and court costs.

                  (b) AMENDMENT. This Agreement may not be modified, amended,
altered or supplemented, except by a written agreement executed by each of the
parties hereto.

                  (c) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement of the parties relating to the subject matter hereof
and supersedes all prior and/or contemporaneous understandings and agreements of
any kind and nature (whether written or oral) among the parties with respect to
such subject matter, all of which are merged herein.

                  (d) WAIVER. Any waiver by a party hereto of any breach of or
failure to comply with any provision or condition of this Agreement by any other
party hereto shall not be construed as, or constitute, a continuing waiver of
such provision or condition, or a waiver of any other breach of, or failure to
comply with, any other provision or condition of this Agreement, any such waiver
to be limited to the specific matter and instance for which it is given. No
waiver of any such breach or failure or of any provision or condition of this
Agreement shall be effective unless in a written instrument signed by the party
granting the waiver and delivered to the other party hereto in the manner
provided for in the Notice section hereof. No failure or delay by any party to
enforce or exercise its rights hereunder shall be deemed a waiver hereof, nor
shall any single or partial exercise of any such right or any abandonment or
discontinuance of steps to enforce such rights, preclude any other or further
exercise thereof or the exercise of any other right.

                  (e) GOVERNING LAW; JURISDICTION. This Agreement shall be
governed by and construed IN accordance with the laws of the State of New Fork
applicable to agreements made and to be performed in that state, without regard
to any of its principles of conflicts of laws or other laws that would result in
the application of the laws of another jurisdiction. The parties shall make
reasonable efforts to resolve any dispute concerning this Agreement, its
construction or its alleged breach by face-to-face negotiations. Each of the
parties unconditionally and irrevocably consents to the exclusive jurisdiction
of the courts of the State of New York and the federal district court for the
Southern District of New York with respect to any suit, action or proceeding
arising out of or relating to this Agreement, and each of the parties hereby
unconditionally and irrevocably waives any objection to venue in any such court
or to assert that any such court is an inconvenient forum, and agrees that
service of any summons, complaint, notice or other process relating to such
suit, action or other proceeding may be effected in the manner provided in die
Notice section hereof. Each of the parties hereby unconditionally and
irrevocably waives the right to a trial by jury in any such action, suit or
other proceeding.

                  (f) BINDING EFFECT, NO ASSIGNMENT, This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by the Company without
the prior written consent of Greenfield, and any attempt to do so shall be void
and of no force and effect. The Company acknowledges and agrees that (1) a sale
of substantially all of the assets of the Company; (2) a merger or consolidation
in which the shareholders of the Company immediately before such merger or
consolidation hold, immediately after the merger or consolidation, less than of
50% of the voting power of the surviving entity; or (3) any transaction or
series of related transactions in which in excess of 50% of the Company's voting
power is transferred, shall be deemed to constitute an assignment hereunder.

                  (g) HEADINGS. The section headings contained in this Agreement
are inserted for reference purposes only and shall not affect in any way the
meaning, construction or interpretation of this Agreement. Any reference to the
masculine, feminine, or neuter gender shall be a reference to such other gender
as is appropriate. References to the singular shall include the plural and vice
versa.

                  (h) DRAFTING HISTORY. This Agreement shall be construed and
interpreted without regard to any presumption against the party causing this
Agreement to be drafted. The parties acknowledge that this Agreement was
negotiated and drafted with each Party being represented by competent counsel of
its choice and with each Party having an equal opportunity to participate in the
drafting of the provisions hereof and shall therefore be construed as if drafted
jointly by the Parties.

Counterparts

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                  (i) COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts (including by facsimile signature, which shall constitute a
legal and valid signature), and by the different Parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, and
all of which, when taken together, shall constitute one and the same document.
This Agreement shall become effective when one or more counterparts, taken
together, shall have been executed and delivered by all of the Parties,

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Greenfield Capital Partners LLC

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Greenfield is delighted to accept this engagement and looks forward to working
with you as your Placement Agent and Financial Advisor. Please confirm that the
foregoing correctly sets forth our agreement by signing and returning to
Greenfield the enclosed duplicate copy of this Agreement

                                        Very truly yours,

                                        GREENFIELD CAPITAL PARTNERS LLC

                                        By: /s/ Michael Byl
                                            --------------------------------
                                            Name: Michael Byl
                                            Title: President

ACCEPTED AND AGREED TO

this 14th day of Feb 2005

TECHNEST HOLDINGS, INC.

By: /s/ Robert Tarini
    -----------------------------
    Name: Robert Tarini
    Title: CEO

<PAGE>

                                                                      SCHEDULE A
                                                                      ----------

                           INDEMNIFICATION PROVISIONS

TO:      Greenfield Capital Partners LLC
         90 Grove Street
         Ridgefield, CT 06877

         In connection with your engagement pursuant to our letter agreement of
even date herewith (the "engagement"), the Company agrees to indemnify and hold
harmless Greenfield Capital Partners LLC ("Greenfield" or "you") and its
affiliates, the respective directors, officers, partners, agents and employees
of Greenfield and its affiliates, and each other person, if any, controlling
Greenfield or any of its affiliates (collectively, "INDEMNIFIED PERSONS"), from
and against, and we agree that no Indemnified Person shall have any liability to
us or our owners, parents, affiliates, security holders or creditors for, any
losses, claims, damages or liabilities (including actions or proceedings in
respect thereof) (collectively "LOSSES") (A) related to or arising out of (i)
our actions or failures to act (including statements or omissions made, or
information provided in writing, by us or our agents) or (ii) actions or
failures to act by an Indemnified Person with our consent or in reliance on our
actions or failures to act, or (B) otherwise related to or arising out of the
Engagement or your performance thereof, except that this clause (B) shall not
apply to any Losses that are finally judicially determined to have resulted
primarily from your bad faith or gross negligence or breach of the letter
agreement. If such indemnification is for any reason not available or
insufficient to hold you harmless, we agree to contribute to the Losses involved
in such proportion as is appropriate to reflect the relative benefits received
(or anticipated to be received) by us and by you with respect to the Engagement
or, if such allocation is judicially determined unavailable, in such proportion
as is appropriate to reflect other equitable considerations such as the relative
fault of us on the one hand and of you on the other hand; PROVIDED, HOWEVER,
that, in no event shall the amount to be contributed by you exceed the fees
actually received by you under the Engagement.

         We will reimburse each Indemnified Person for all expenses (including
reasonable fees and disbursements of counsel) as they are incurred by such
Indemnified Person in connection with investigating, preparing for or defending
any action, claim, investigation, inquiry, arbitration or other proceeding
("ACTION") referred to above (or enforcing this agreement or any related
engagement agreement), whether or not in connection with pending or threatened
litigation in which any Indemnified Person is a party, and whether or not such
Action is initiated or brought by you. We further agree that we will not settle
or compromise or consent to the entry of any judgment in any pending or
threatened Action in respect of which indemnification may be sought hereunder
(whether or not an Indemnified Person is a party therein) unless we have given
you reasonable prior written notice thereof and used all reasonable efforts,
after consultation with you, to obtain an unconditional release of each
Indemnified Person from all liability arising therefrom. In the event we are
considering entering into one or a series of transactions involving a merger or
other business combination or a dissolution or liquidation of all or a
significant portion of our assets, we shall promptly notify you in writing, If
requested by Greenfield, we shall then establish alternative means of providing
for our obligations set forth herein on terms and conditions reasonably
satisfactory to Greenfield.

         If multiple claims are brought against you in any Action with respect
to at least one of which indemnification is permitted under applicable law and
provided for under this agreement, we agree that any judgment, arbitration award
or other monetary award shall be conclusively deemed to be based on claims as to
which indemnification is permitted and provided for. In the event that you are
called or subpoenaed to give testimony in a court of law, we agree to pay your
expenses related thereto. Our obligations hereunder shall be in addition to any
rights that any Indemnified Person may have at common law or otherwise. Solely
for the purpose of enforcing this agreement, we hereby consent to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this agreement is brought by or against any Indemnified Person. We
acknowledge that in connection with the Engagement you are acting as an
independent contractor with duties owing solely to us. YOU HEREBY AGREE, AND WE
HEREBY AGREE ON OUR OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ON BEHALF OF OUR SECURITY HOLDERS, TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION ARISING OUT OF THE, ENGAGEMENT,
YOUR PERFORMANCE THEREOF OR THIS AGREEMENT.

         The provisions of this agreement shall apply to the Engagement
(including related activities prior to the date hereof) and any modification
thereof and shall remain in full force and effect regardless of the completion
or termination of the Engagement. This agreement and any other agreements
relating to the Engagement shall be governed by and construed in accordance with
the laws of the state of New York, without regard to conflicts of law principles
thereof.<PAGE>

                                                                     EXHIBIT 4.4

                      ADVANCED TECHNOLOGY INDUSTRIES, INC.
                          2005 STOCK COMPENSATION PLAN

         Advanced Technology Industries, Inc., a corporation organized under
the laws of the State of Delaware, hereby adopts this 2005 Stock Compensation
Plan.

                                 PURPOSE OF PLAN

         The purpose of this 2005 Stock Compensation Plan is to advance the
interests of Advanced Technology Industries, Inc. by allowing Advanced
Technology Industries, Inc. to compensate employees and certain consultants who
have provided bona fide services to Advanced Technology Industries, Inc. through
the award of Common Stock (as defined below).

                          TERMS AND CONDITIONS OF PLAN
                          ----------------------------

         1.       DEFINITIONS.
                  ------------
                  Set forth below are definitions of capitalized terms which are
generally used throughout this Plan, or references to provisions containing such
definitions (capitalized terms whose use is limited to specific provisions are
not referenced in this Section):

                  (a) AFFILIATE - The term "Affiliate" is defined as any person
controlling the Company, controlled by the Company, or under common control with
the Company.

                  (b) AWARD - The term "Award" is collectively and severally
defined as any Options or Award Shares granted under this Plan.

                  (c) AWARD SHARES - The term "Award Shares" is defined as
shares of Common Stock granted by the Plan Committee in accordance with SECTION
6 of this Plan.

                  (d) BOARD - The term "Board" is defined as the Board of
Directors of the Company, as such body may be reconstituted from time to time.

                  (e) COMMON STOCK - The term "Common Stock" is defined as the
Company's common stock, par value
$0.0001.

                  (f) COMPANY - The term "Company" is defined as Advanced
Technology Industries, Inc.

                                       1

<PAGE>

                  (g) CONSULTANT - The term "Consultant" is defined as any
Person who is or was a consultant to the Company or an Affiliate who provides or
provided bona fide consulting services to the Company or the Affiliate.

                   (h) COVERED TRANSACTION - The term "Covered Transaction" is
defined as any of (i) a consolidation or merger in which the Company is not the
surviving corporation, (ii) a sale or transfer of all or substantially all the
Company's assets, or (iii) a dissolution or liquidation of the Company.

                  (i) DISPOSED - The term "Disposed" (or the equivalent terms
"Disposition" or "Dispose") is defined as any transfer or alienation of an Award
which would directly or indirectly change the legal or beneficial ownership
thereof, whether voluntary or by operation of law, or with or without the
payment or provision of consideration, including, by way of example and not
limitation: (i) the sale, assignment, bequest or gift of the Award; (ii) any
transaction that creates or grants an option, warrant, or right to obtain an
interest in the Award; (iii) any transaction that creates a form of joint
ownership in the Award between the Recipient and one or more other Persons; (iv)
any Disposition of the Award to a creditor of the Recipient, including the
hypothecation, encumbrance or pledge of the Award or any interest therein, or
the attachment or imposition of a lien by a creditor of the Recipient on the
Award or any interest therein which is not released within thirty (30) days
after the imposition thereof; (v) any distribution by a Recipient which is an
entity to its stockholders, partners, co-venturers or members, as the case may
be, or (vi) any distribution by a Recipient which is a fiduciary such as a
trustee or custodian to its settlors or beneficiaries.

                  (j) ELIGIBLE PERSON - The term "Eligible Person" means
Consultants and Employees.

                  (k) EMPLOYEE - The term "Employee" is defined as any person
who is employed by the Company or an Affiliate.

                  (l) FAIR MARKET VALUE - The term "Fair Market Value" means the
fair market value as of the applicable valuation date of the Option Shares,
Award Shares, or other shares of Common Stock, as the case may be, to be valued
(the "SUBJECT SHARES"), determined in accordance with the following principles:

                           (i) If the Common Stock is traded on a stock exchange
         on the date in question, then the Fair Market Value of the Subject
         Shares will be equal to the closing bid price of Common Stock on the
         principal exchange on which the Common Stock is then trading, or, if
         Common Stock is not traded on such date, then on the next preceding
         trading day during which a sale occurred;

                           (ii) If the Common Stock is traded over-the-counter
         on the Nasdaq National Market System on the date in question, then the
         Fair Market Value of the Subject Shares will equal (1) the last sales
         price (if the Common Stock is then listed as a National Market Issue
         under the Nasdaq National Market System) or (2) the mean between the
         closing representative bid and asked price (in all other cases) for the
         Common Stock on such date as reported by Nasdaq or such successor
         quotation system;

                                       2

<PAGE>

                           (iii) If the Common Stock is traded over-the-counter
         on Nasdaq (other than on the Nasdaq National Market System) on the date
         in question, then the Fair Market Value of the Subject Shares will
         equal the mean between the closing representative bid and asked price
         (in all other cases) for the Common Stock on such date as reported by
         Nasdaq;

                           (iv) If the Common Stock is not publicly traded on an
         exchange and is not quoted on Nasdaq or a successor quotation
         system, then the Fair Market Value of the Subject Shares shall be
         determined by the Board acting in good faith on such basis as it deems
         appropriate;

                           (v) If the Subject Shares are unregistered securities
         (and thus are considered "restricted stock" within the meaning of
         Section 144 of the Securities Act), or if the Subject Shares are
         subject to conditions, risk of forfeiture, or repurchase rights or
         rights of first refusal which impair its value including, without
         limitation, those conditions more particularly described in SECTION 7
         of this Plan, then the Fair Market Value of the Subject Shares shall be
         subject to such discount to reflect such impairments to value as the
         Plan Committee may, in its sole discretion and without obligation to do
         so, determine to be appropriate; and

                           (vi) Anything in SUBSECTIONS (i) through (v) above to
         the contrary, in no circumstances shall the Fair Market Value of the
         Subject Shares be less than its par value.

                  (m) ISSUED SHARES - The term "Issued Shares" is defined as
shares of Common Stock issued pursuant to the terms of this Plan.

                  (n) OPTION - The term "Option" is defined as an option to
purchase Common Stock granted by the Plan Committee pursuant to the terms of
this Plan and, in particular, the terms of SECTION 5 of this Plan.

                  (o) OPTION PRICE - The term "Option Price" is defined in
SECTION 5(b) of this Plan.

                  (p) OPTION SHARES - The term "Option Shares" is defined as the
shares of Common Stock which an Option entitles the holder thereof to purchase.

                                       3

<PAGE>

                  (q) PERSON - The term "Person" is defined, in its broadest
sense, as any individual, entity or fiduciary such as, by way of example and not
limitation, individual or natural persons, corporations, partnerships (limited
or general), joint-ventures, associations, limited liability
companies/partnerships, or fiduciary arrangements, such as trusts.

                  (r) PLAN - The term "Plan" is defined as this 2005 Stock
Compensation Plan.

                  (s) PLAN COMMITTEE - The term "Plan Committee" is defined as
that Committee appointed by the Board to administer and interpret this Plan as
more particularly described in SECTION 3 of this Plan; PROVIDED, HOWEVER, that
the term Plan Committee will refer to the Board during such times as no Plan
Committee is appointed by the Board.

                  (t) RESTRICTED SHARES - The term "Restricted Shares" is
defined as Option Shares or Award Shares, as the case may be, that are subject
to restrictions as more particularly set forth in SECTION 7 of this Plan.

                  (u) RECIPIENT - The term "Recipient" is defined as any
Eligible Person who, at a particular time, receives the grant of an Award.

                  (v) SECURITIES ACT - The term "Securities Act" is defined as
the Securities Act of 1933, as amended (references herein to Sections of the
Securities Act are intended to refer to Sections of the Securities Act as
enacted at the time of the adoption of this Plan by the Board and as
subsequently amended, or to any substantially similar successor provisions of
the Securities Act resulting from recodification, renumbering or otherwise).

         2.       TERM OF PLAN.
                  -------------
                  This Plan shall be effective as of such time and date as this
Plan is adopted by the Board, and this Plan shall terminate on the first
business day prior to the ten (10) year anniversary of the date this Plan became
effective. No grants of Options shall be made under this Plan before the date
this Plan becomes effective or after the date this Plan terminates; PROVIDED,
HOWEVER, that (i) all Awards granted pursuant to this Plan prior to the
effective date of this Plan shall not be affected by the termination of this
Plan and (ii) all other provisions of this Plan shall remain in effect until the
terms of all outstanding Awards have been satisfied or terminated in accordance
with this Plan and the terms of such Awards.

         3.       PLAN ADMINISTRATION.
                  --------------------
                  (a) PLAN COMMITTEE.

                           (i) This Plan shall be administered and interpreted
         by a committee consisting of two (2) or more members of the Board.

                                       4

<PAGE>

                           (ii) Members of the Plan Committee may resign at any
         time by delivering written notice to the Board. Vacancies in the Plan
         Committee shall be filled by the Board. The Plan Committee shall act by
         a majority of its members in office. The Plan Committee may act either
         by vote at a meeting or by a memorandum or other written instrument
         signed by a majority of the Plan Committee.

                           (iii) If the Board, in its discretion, does not
         appoint a Plan Committee, the Board itself will administer and
         interpret this Plan and take such other actions as the Plan Committee
         is authorized to take hereunder; provided that the Board may take such
         actions hereunder in the same manner as the Board may take other
         actions under the Certificate of Incorporation and bylaws of the
         Company generally.

                  (b) ELIGIBILITY OF PLAN COMMITTEE MEMBERS TO RECEIVE AWARDS.
While serving on the Plan Committee, such members shall not be eligible for
selection as Eligible Persons to whom an Award may be granted under this Plan.

                  (c) POWER TO MAKE AWARDS. The Plan Committee shall have the
full and final authority in its sole discretion, at any time and from
time-to-time, subject only to the express terms, conditions and other provisions
of the Certificate of Incorporation of the Company and this Plan, and the
specific limitations on such discretion set forth herein, to:

                           (i) Designate the Eligible Persons or classes of
         Eligible Persons eligible to receive Awards from among the Eligible
         Persons;

                           (ii) Grant Awards to such selected Eligible Persons
         or classes of Eligible Persons in such form and amount (subject to the
         terms of this Plan) as the Plan Committee shall determine;

                           (iii) Impose such limitations, restrictions and
         conditions upon any Award as the Plan Committee shall deem appropriate
         and necessary including, without limitation, the term of Options and
         any vesting conditions attached thereto, and any vesting and repurchase
         conditions described in SECTIONS 5 or 7 of this Plan placed upon grants
         of Option Shares or Restricted Shares;

                           (iv) Interpret this Plan, adopt, amend and rescind
         rules and regulations relating to this Plan, and make all other
         determinations and take all other action necessary or advisable for the
         implementation and administration of this Plan; and

                                       5

<PAGE>

                           (v) Delegate all or a portion of its authority under
         subsections (i) through (iii) of this SECTION 3(c) to one or more
         directors of the Company who are executive officers of the Company,
         subject to such restrictions and limitations (such as the aggregate
         number of shares of Common Stock that may be awarded) as the Plan
         Committee may decide to impose on such delegate directors.

                  In determining the recipient, form and amount of Awards, the
Plan Committee shall consider any factors deemed relevant, including the
individual's functions, responsibilities, value of services to the Company and
past and potential contributions to the Company's profitability and sound
growth.

                  (d) INTERPRETATION OF PLAN. The Plan Committee shall, in its
sole and absolute discretion, interpret and determine the effect of all matters
and questions relating to this Plan. The interpretations and determinations of
the Plan Committee under this Plan (including without limitation determinations
pertaining to the eligibility of Persons to receive Awards, the form, amount and
timing of Awards, the methods of payment for Awards, the restrictions and
conditions placed upon Awards, and the other terms and provisions of Awards and
the certificates or agreements evidencing same) need not be uniform and may be
made by the Plan Committee selectively among Persons who receive, or are
eligible to receive, Awards under this Plan, whether or not such Persons are
similarly situated. All actions taken and all interpretations and determinations
made under this Plan in good faith by the Plan Committee shall be final and
binding upon the Recipient, the Company, and all other interested Persons. No
member of the Plan Committee shall be personally liable for any action taken or
decision made in good faith relating to this Plan, and all members of the Plan
Committee shall be fully protected and indemnified to the fullest extent
permitted under applicable law by the Company in respect to any such action,
determination, or interpretation.

                  (e) COMPENSATION; ADVISORS. Members of the Plan Committee
shall receive such compensation for their services as members as may be
determined by the Board. All expenses and liabilities incurred by members of the
Plan Committee in connection with the administration of this Plan shall be borne
by the Company. The Plan Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other Persons, at
the cost of the Company. The Plan Committee, the Company and its officers and
directors shall be entitled to rely upon the advice, opinions, or valuations of
any such Persons.

         4.       STOCK POOL.
                  -----------
                  (a) MAXIMUM NUMBER OF SHARES AUTHORIZED UNDER PLAN. Shares of
stock which may be issued or granted under this Plan shall be authorized and
unissued or treasury shares of Common Stock. The aggregate maximum number of
shares of Common Stock which may be issued in exercise of Options or as a grant
of Award Shares, as the case may be, shall not exceed Five Million (5,000,000)
shares of Common Stock (the "Stock Pool"); PROVIDED, HOWEVER, that such number
shall be increased by the following:

                                       6

<PAGE>

                           (i) Any shares of Common Stock tendered by a
         Recipient as payment for Option Shares or Award Shares;

                           (ii) Any rights to shares of Common Stock surrendered
         by a Recipient as payment for Option Shares or Award Shares;

                           (iii) Any shares of Common Stock subject to an Option
         which for any reason is terminated unexercised or expires; and

                           (iv) Any Restricted Shares which are granted as
         Option Shares or Award Shares, and are subsequently forfeited by the
         holders thereof.

                  (b) CALCULATING SHARES AVAILABLE FOR AWARDS. For purposes of
calculating the maximum number of shares of Common Stock in the Stock Pool which
may be issued under the Plan, the following rules shall apply:

                           (i) When Options are exercised, and when cash is used
         as full payment for shares issued upon exercise of such Options, all
         the shares issued (including the shares, if any, withheld for tax
         withholding requirements) shall be counted;

                           (ii) When Options are exercised, and when shares of
         Common Stock are used as full or partial payment for shares issued upon
         exercise of such Options, if permitted by the Plan Committee, only the
         net shares issued (including the shares, if any, withheld for tax
         withholding requirements) shall be counted; and

                           (iii) When Award Shares are granted and the Plan
         Committee elects to require payment with respect to such grant, and
         when shares of Common Stock are used as full or partial payment for the
         grant of such shares, only the net shares issued (including the shares,
         if any, withheld for tax withholding requirements) shall be counted.

                  (c) DATE OF AWARD. The date an Award is granted shall mean the
date selected by the Plan Committee as of which the Plan Committee allots a
specific number of shares to a Recipient with respect to such Award pursuant to
this Plan.

         5.       OPTIONS (TO PURCHASE OPTION SHARES).
                  ------------------------------------
                 (a) GRANT. The Plan Committee may from time to time, and
subject to the provisions of this Plan and such other terms and conditions as
the Plan Committee may prescribe, grant to any Eligible Person one or more
options to purchase for cash or shares of Common Stock the number of shares of
Common Stock ("OPTIONS") allotted by the Plan Committee; PROVIDED, HOWEVER, no
Option shall be granted to any Eligible Person who is a member of the Plan
Committee. The grant of an Option shall be evidenced by either a written
agreement or a written option certificate separate from such agreement, executed
by the Company and the Recipient, stating the number of shares of Common Stock
subject to the Option, and stating all terms and conditions of such Option.

                                       7

<PAGE>

                  (b) OPTION PRICE. The purchase price per Option Share
deliverable upon the exercise of an Option (the "OPTION PRICE") shall be such
price as may be determined by the Plan Committee.

                  (c) OPTION TERM; EXPIRATION. The term of each Option shall
commence at the grant date for such Option as determined by the Plan Committee,
and shall expire, unless an earlier expiration date is expressly provided in the
underlying agreement or separate option certificate, on the first business day
prior to the ten (10) year anniversary of the date of grant thereof.

                  (d) EXERCISE DATE. Unless a later exercise date is expressly
provided in the underlying agreement or option certificate, each Option shall
become exercisable on the date of its grant as determined by the Plan Committee.
No Option shall be exercisable after the expiration of its applicable term.
Subject to the foregoing, each Option shall be exercisable in whole or in part
during its applicable term unless expressly provided otherwise in the underlying
agreement or option certificate.

                  (e) VESTING PROVISIONS. The Plan Committee may, in its sole
discretion, subject Options granted to Recipients to such vesting conditions
pertaining to continued provision of consulting services to, or employment with,
the Company or any Affiliate or the attainment of goals as the Plan Committee,
in its sole discretion, determines are appropriate. If no vesting is expressly
provided in the underlying agreement or separate option certificate, the Option
Shares shall be deemed fully vested upon date of grant.

                  (f) MANNER OF EXERCISE AND PAYMENT. An exercisable Option, or
any exercisable portion thereof, may be exercised solely by delivery of all of
the following to the Secretary of the Company at his or her office at the
Company prior to the time when such Option or such portion becomes unexercisable
under this SECTION 5:

                           (i) Notice in writing signed by the Recipient or
         other Person then entitled to exercise the Option or portion thereof
         stating that such Option or portion is exercised, such notice complying
         with the procedures set forth in the applicable agreement or option
         certificate which governs the exercise of the Option, and any other
         applicable rules established by the Plan Committee.

                           (ii) Full payment for the shares with respect to
         which such Option or portion is thereby exercised as follows (or any
         combination of the following):

                                    (1) In good funds (in U.S. dollars) by cash
                           or by check; and/or

                                       8

<PAGE>

                                    (2) If expressly permitted in the underlying
                           agreement or option certificate, or otherwise
                           consented to by the Plan Committee in writing:

                                             (A) Shares of Common Stock owned by
                                    the Recipient duly endorsed for transfer to
                                    the Company with a Fair Market Value on the
                                    date of delivery equal to the aggregate
                                    Option Price of the Option Shares with
                                    respect to which the Option or portion is
                                    thereby exercised;

                                             (B) The surrender or relinquishment
                                    of rights to acquire Common Stock owned by
                                    the Recipient with a Fair Market Value on
                                    the date of delivery equal to the aggregate
                                    Option Price of the Option Shares with
                                    respect to which the Option or portion is
                                    thereby exercised; or

                                             (C) A full recourse promissory note
                                    bearing interest and payable upon such terms
                                    as may be prescribed by the Plan Committee.
                                    The Plan Committee may also prescribe the
                                    form of such note and the security to be
                                    given for such note.

                           (iii) Such representations and documents as the Plan
         Committee, in its absolute discretion, deems necessary or advisable to
         effect compliance with all applicable provisions of the Securities Act
         and any other federal or state securities laws or regulations. The Plan
         Committee may, in its absolute discretion, also take whatever
         additional actions it deems appropriate to effect such compliance
         including, without limitation, placing legends on share certificates
         and issuing stop-transfer orders to transfer agents and registrars.

                           (iv) In the event that the Option or portion thereof
         shall be exercised by any Person other than the Recipient, appropriate
         proof of the right of such Person or Persons to exercise the Option or
         portion thereof.

                  (g) NON-ASSIGNABILITY. Except as expressly provided in the
underlying agreement or option certificate, Options may not be Disposed by the
Recipient, nor exercised by any Person other than the Recipient, without the
prior written consent of the Plan Committee, which consent the Plan Committee
may withhold in its sole and absolute discretion, and such Options shall, upon
the Disposition or exercise of such Option without the Plan Committee 's prior
written consent, terminate and be null and void AB INITIO and of no further
force and effect.

                                       9

<PAGE>

                  (h) NO STOCKHOLDER RIGHTS. The Recipient shall not be, nor
have any of the rights or privileges of, a stockholder of the Company with
respect to the Option Shares unless and until all conditions for exercise of the
Option and the issuance of certificates for the Option Shares shall be
satisfied, at which time the Recipient shall become a stockholder of the Company
with respect to the Option Shares and as such shall thereafter be fully entitled
to receive dividends (if any are declared and paid), to vote and to exercise all
other rights of a stockholder with respect to the Option Shares.

         6.       AWARD SHARES.
                  -------------
                  (a) GRANT. The Plan Committee may from time to time, and
subject to the provision of this Plan and such other terms and conditions as the
Plan Committee may prescribe, grant to any Eligible Person one or more shares of
Common Stock ("AWARD SHARES") allotted by the Plan Committee. The grant of Award
Shares or grant of the right to receive Award Shares shall be evidenced by a
written agreement confirming such grant, executed by the Company and the
Recipient, stating the number of Award Shares granted and stating all terms and
conditions of such grant.

                  (b) PURCHASE PRICE AND MANNER OF PAYMENT. The Plan Committee,
in its sole discretion, may grant Award Shares in any of the following
instances:

                           (i) as a "bonus" or "reward" for services previously
         rendered and compensated, in which case the Recipient shall not be
         required to pay any consideration for such Award Shares, and the value
         of such Award Shares shall be the Fair Market Value of such Award
         Shares on the date of grant;

                           (ii) as "compensation" for the previous performance
         or future performance of services or attainment of goals, in which case
         the Recipient shall not be required to pay any consideration for such
         Award Shares (other than the performance of Recipient's services), and
         the value of such Award Shares received shall be the Fair -Market Value
         of such Award Shares on the date of grant; or

                           (iii) in consideration for the payment of a purchase
         price for such Award Shares in an amount established by the Plan
         Committee.

                                       10

<PAGE>

         7.       RESTRICTED SHARES.
                  ------------------
                  (a) VESTING CONDITIONS; FORFEITURE OF UNVESTED SHARES. The
Plan Committee may subject or condition the grant of Issued Shares (hereinafter
referred to as "RESTRICTED SHARES") to such vesting conditions based upon
continued provision of services or attainment of goals subsequent to such grant
of Restricted Shares as the Plan Committee, in its sole discretion, may deem
appropriate. In the event the Recipient does not satisfy such vesting
conditions, the Company may require the Recipient to forfeit such unvested
Restricted Shares. All vesting conditions imposed on the grant of Restricted
Shares shall be set forth in a written agreement, executed by the Company and
the Recipient on or before the time of the grant of such Restricted Shares,
stating the number of said Restricted Shares subject to such conditions and
further specifying the vesting conditions. If no vesting conditions are
expressly provided in the underlying agreement, the Issued Shares shall not be
deemed to be Restricted Shares, and will not be required to be forfeited. Any
grant of Restricted Shares shall be subject to the following limitations:

                           (i) In no case shall the Recipient be required to
         forfeit any vested Restricted Shares; and

                           (ii) In the event of the forfeiture of any unvested
         Restricted Shares, the Company shall pay to the Recipient with respect
         to all of such unvested Restricted Shares an amount equal to not less
         than the original purchase price, if any, paid by the Recipient for
         such unvested Restricted Shares.

                  (b) RESTRICTIVE LEGEND. Until such time as all conditions
placed upon Restricted Shares lapse, the Plan Committee may place a restrictive
legend on the share certificate representing such Restricted Shares which
evidences said restrictions in such form and subject to such stop instructions
as the Plan Committee shall deem appropriate. The conditions shall similarly
apply to any new, additional or different securities the Recipient may become
entitled to receive with respect to such Restricted Shares by virtue of a stock
split or stock dividend or any other change in the corporate or capital
structure of the Company. The Plan Committee shall also have the right, should
it elect to do so, to require the Recipient to deposit the share certificate for
the Restricted Shares with the Company or its agent, endorsed in blank or
accompanied by a duly executed irrevocable stock power or other instrument of
transfer, until such time as the conditions lapse. The Company shall remove the
legend with respect to any Restricted Shares which become vested.

                  (c) STOCKHOLDER RIGHTS. The Recipient of Restricted Shares
shall have all rights or privileges of a stockholder of the Company with respect
to the Restricted Shares notwithstanding the terms of this SECTION 7 (with the
exception of SUBSECTION (d) hereof) and, as such, shall be fully entitled to
receive dividends (if any are declared and paid), to vote and to exercise all
other rights of a stockholder with respect to the Restricted Shares.

                  (d) NON-ASSIGNABILITY. Except as expressly provided in the
underlying agreement, unvested Restricted Shares may not be Disposed by the
Recipient without the prior written consent of the Plan Committee, which consent
the Plan Committee may withhold in its sole and absolute discretion, and such
purported Disposition shall be null and void AB INITIO and of no force and
effect.

                                       11

<PAGE>

         8.       ADJUSTMENTS.
                  ------------

                  (a) SUBDIVISION OR STOCK DIVIDEND. In the event of a stock
dividend, stock split or combination of shares, recapitalization or other change
in the Company's capital structure, the Plan Committee will make appropriate
adjustments to the maximum number of shares that may be delivered under this
Plan under Section 4(a), and will also make appropriate adjustments to the
number and kind of shares of stock or securities subject to Awards then
outstanding or subsequently granted, any exercise prices relating to Awards and
any other provision of Awards affected by such change.

                  (b) COVERED TRANSACTIONS. Except as otherwise provided in this
paragraph, in the event of a Covered Transaction and unless otherwise determined
by the Plan Committee, the Plan Committee may provide that (i) all outstanding
Awards vest and, if relevant, become exercisable immediately prior to the
Covered Transaction (and if unexercised upon consummation of such Covered
Transaction such Awards are forfeited), (ii) all Awards that are payable in
shares of Stock and that have not been exercised, exchanged or converted, as
applicable, convert into and represent the right to receive the consideration to
be paid in such Covered Transaction for each share of Common Stock into which
such Award is exercisable, exchangeable or convertible, less the applicable
exercise price or purchase price for such Award, and/or (iii) in connection with
any Covered Transaction in which there is an acquiring or surviving entity,
Awards are substituted, replaced or assumed by the acquiring or surviving entity
or its affiliates, any such substitution, replacement or assumption to be on
such terms as the Plan Committee determines.

                  (c) ADJUSTMENTS DETERMINED IN SOLE DISCRETION OF THE PLAN
COMMITTEE. To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Plan Committee,
whose determination in that respect shall be final, binding and conclusive.

                  (d) NO OTHER RIGHTS TO RECIPIENT. Except as expressly provided
in this SECTION 8, (i) the Recipient shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class, and (ii) the dissolution, liquidation, merger,
consolidation, reorganization or sale of assets or stock to another corporation,
or any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of, or
the Option Price for, the Award Shares. The grant of an Award pursuant to this
Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell
or transfer all or any part of its business or assets.

                                       12

<PAGE>

         9.       PERFORMANCE ON BUSINESS DAY.
                  ----------------------------
                  In the event the date on which a party to this Plan is
required to take any action under the terms of this Plan is not a business day,
the action shall, unless otherwise provided herein, be deemed to be required to
be taken on the next succeeding business day.

         10.      EMPLOYMENT STATUS.
                  ------------------
                  In no event shall the granting of an Award be construed as
granting a continued right of a Recipient to be retained or employed by the
Company or any Affiliate, nor effect any right which the Company may have to
terminate any consulting or employment relationship with such Person.

         11.      AMENDMENT AND DISCONTINUATION OF PLAN; MODIFICATION OF AWARDS.
                  --------------------------------------------------------------
                  (a) AMENDMENT, MODIFICATION OR TERMINATION OF PLAN. The Board
may amend this Plan or suspend or discontinue this Plan at any time or from
time-to-time; PROVIDED, HOWEVER no such action may adversely alter or impair any
Award previously granted under this Plan without the consent of each Recipient
affected thereby.

                  (b) MODIFICATION OF TERMS OF OUTSTANDING OPTIONS. Subject to
the terms and conditions and within the limitations of this Plan, the Plan
Committee may modify, extend or renew outstanding Options granted under this
Plan, including vesting conditions, or accept the surrender of outstanding
Options (to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, however, no modification of any outstanding
Option may, without the consent of the Recipient affected thereby, adversely
alter or impair such Recipients rights under such Option.

                  (c) MODIFICATION OF RESTRICTED SHARE VESTING CONDITIONS.
Subject to the terms and conditions and within the limitations of this Plan,
including vesting conditions, the Plan Committee may modify the conditions
placed upon the grant of any Restricted Shares, PROVIDED, HOWEVER, no
modification of any conditions placed upon Restricted Shares may, without the
consent of the Recipient thereof, adversely alter or impair such Recipient's
rights with respect to such Restricted Shares.

                  (d) COMPLIANCE WITH LAWS. The Plan Committee may at any time
or from time-to-time, without receiving further consideration from any Person
who may become entitled to receive or who has received the grant of an Award
hereunder, modify or amend Awards granted under this Plan as required to: (i)
comport with changes in securities, tax or other laws or rules, regulations or
regulatory interpretations thereof applicable to this Plan or Awards thereunder
or to comply with stock exchange rules or requirements and/or (ii) ensure that

                                       13

<PAGE>

this Plan is and remains or shall become exempt from the application of any
participation, vesting, benefit accrual, funding, fiduciary, reporting,
disclosure, administration or enforcement requirement of either the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
corresponding provisions of the Internal Revenue Code of 1986, as amended;
PROVIDED, HOWEVER, no such modification may, without the consent of the holder
thereof, adversely alter or impair his or her rights with respect to such Award
Shares.

         13.      WITHHOLDING TAXES.
                  ------------------
                  As a condition of the grant of any Award and/or exercise of
any Option, as the case may be, the Company shall have the right to require the
Recipient to remit to the Company an amount sufficient to satisfy any federal,
state and/or local withholding tax requirements incident to such grant or
exercise; PROVIDED, HOWEVER, whenever the Company is delivering any shares of
Common Stock the Company may, in its sole discretion, but without obligation to
do so, issue or transfer such shares of Common Stock net of the number of shares
sufficient to satisfy any withholding tax requirements incident to such issuance
or transfer. For withholding tax purposes, the shares of Common Stock shall be
valued on the date the withholding obligation is incurred.

                                       14

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