Document:

MENDMENT
NO. 2 TO CANCELLATION AGREEMENT

    BETWEEN
QPORTER, INC. AND ZMG—ZURICH MANAGEMENT GROUP

     

    AGREEMENT
dated as of July 22, 2009, by and between Qporter, Inc., a wholly owned
subsidiary of Qnective, Inc., a Nevada corporation with its principal place of
business at Thurgauerstrasse 54, CH-8050 Zurich, Switzerland (collectively,
"Qnective"), and ZMG—Zurich Management Group, a Swiss company, with its
principal place of business at Thurgauerstrasse 54, CH-8050, Zurich, Switzerland
("ZMG").

     

    WITNESSETH:

     

    WHEREAS,
Qnective, through its wholly owned subsidiary, Qporter, Inc., and ZMG entered
into a consulting agreement dated as of December 20, 2007, as amended by
amendment dated June 20, 2008 (collectively, the "Consulting Agreement") whereby
ZMG agreed to provide certain services to Qnective in exchange for compensation
which included the grant of stock options for shares of Qnective common stock;
and

     

    WHEREAS,
Qnective and ZMG terminated the Consulting Agreement by Agreement dated March
30, 2009 (the "Cancellation Agreement"); and

     

    WHEREAS,
Qnective and ZMG amended the Cancellation Agreement by Amendment dated March 31,
2009; and

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    WHEREAS,
Qnective and ZMG have agreed to amend further the Cancellation Agreement upon
the terms and conditions set forth herein; and

     

    WHEREAS
Qnective and ZMG have agreed to provide for the issuance of Stock Rights in lieu
of Options as more fully set forth in this Amendment; and

     

    WHEREAS,
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed in Qnective's Amended and Restated Equity Incentive Plan (the "Plan");
and ZMG shall be deemed a Key Person under the Plan.

     

    NOW,
THEREFORE, in consideration of the foregoing premises and the mutual promises
and covenants contained herein the parties agree as follows.

     

    1.  Termination.

     

    (a) The
Consulting Agreement was terminated on March 30, 2009 (the "Termination Date")
as amended on March 31, 2009,  pursuant to the terms of the
Cancellation Agreement and the first amendment to the Cancellation Agreement, a
copy of each of which is annexed hereto as Exhibit A and Exhibit B,
respectively, and all obligations of ZMG and its president, Zoran
Trifovic,  terminated on the Termination Date, including but not
limited to Mr. Trifovic's membership on the board of directors of Qnective
(Swiss) AG (formerly Qporter (Swiss) AG), and all obligations of Qnective
terminated on such date, other than the obligation to grant Options in
accordance with the first amendment to the Cancellation
Agreement.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    2.  Termination
Payment.  Upon termination of the Consulting Agreement Qnective
paid to ZMG a lump-sum settlement payment in the amount of Three Thousand Eight
Hundred and fifty and 00/100 (CHF3,850.00) Swiss Francs receipt of which is
hereby acknowledged by ZMG.

     

    3.  Stock
Options.

     

    (a)  Qnective
and ZMG have agreed to exchange the 350,000 Options granted to ZMG to Stock
Rights for 350,000 Shares effective July 22, 2009.

     

    (b)  In
accordance with the terms of the Plan the Board of Directors of Qnective has
determined that the Fair Market Value Price of the Shares to be issued pursuant
to the Stock Rights shall be $.14 per Share, a price per Share in excess of the
closing price on the OTC Bulletin Board on the date of grant of the Stock Rights
resulting in additional compensation to ZMG of $49,000 for services rendered to
Qnective.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (c) The
foregoing grant of Stock Rights and issuance of Shares is subject to, and
contingent upon, ZMG's execution and delivery to Qnective of all necessary and
required documentation, including but not limited to the form of Subscription
Agreement annexed hereto as Exhibit
C.

     

    4. Return of
Documentation.

     

    (a) ZMG
on its behalf and on behalf of its President, Zoran Trifovic, hereby represents
and warrants to Qnective that all documents relating to Qnective that it might
have had in its possession have been returned to Qnective.

     

    5. Release.  ZMG,
its officers, directors, shareholders, and employees hereby release and
discharge Qnective, and its parents, subsidiaries, affiliates, successors, and
assigns and each of their respective officers, directors, shareholders, agents,
attorneys, employees, and representatives from any and all actions, causes of
action, claims, costs, liabilities, damages, expenses, attorneys' fees, or
demands of any kind or nature, contingent or fixed, liquidated or unliquidated,
matured or unmatured, and whether at law or in equity any of them may have had,
now may have, or may hereafter have against Qnective.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    6. Confidentiality.   ZMG
on its behalf, and on behalf of its President, Zoran Trifovic, and all other of
its employees or agents, agrees not to use, divulge, sell, or deliver to or for
any other person, firm, or corporation any Confidential Information (as
hereinafter defined) regarding Qnective which it acquired, learned, developed,
or created by reason of its relationship with Qnective, except as specifically
authorized or as required by law and except for information that is or becomes
public other than through ZMG's breach of this
paragraph.  "Confidential Information" herein means information about
Qnective and its employees and consultants, including their education,
experience, skills, abilities, compensation, and benefits, that is not disclosed
by Qnective in the ordinary course of business and that was learned by ZMG in
the course of its relationship with Qnective, and also includes without
limitation data, business plans, methods of operation, formulae, information,
and client and customer lists and all papers, resumes, and records (including
computer records) or documents containing such Confidential
Information.  ZMG acknowledges that such Confidential Information is
specialized, unique in nature, and of great value to Qnective and that such
information gives Qnective a competitive advantage.

     

    7.  Governing Law; Dispute
Resolution.  This Agreement shall be governed by and construed
in accordance with the laws of Switzerland without application of principles of
conflicts of laws.  Any dispute relating in any manner to this
Agreement shall be resolved before the courts of the Canton of Zurich,
Switzerland.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

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

     

    
      
        	
                QPORTER,
      INC.

              
	 
      
	
                By:

              	      
                /s/
      Oswald Ortiz

              
	 
      	
                Oswald
      Ortiz

              
	 
      	
                Chief
      Executive Officer

              
	 
      
	
                ZMG—ZURICH
      MANAGEMENT GROUP

              
	 
      
	
                By:

              	      
                /s/
      Zoran Trifovic

              
	 
      	
                Zoran
      Trifovic

              
	 
      	
                President

              

      

    

    

    SOLELY
FOR PURPOSES OF SECTION 3:

    QNECTIVE,INC.

    

    
      
        	
                By:

              	      
                /s/
      Oswald Ortiz

              
	 
      	
                Oswald
      Ortiz

              
	 
      	
                Chief
      Executive Officer

              

      

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    Cancellation
Agreement

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    This
document is a translation of the German original. In the event of conflict or
inconsistency between the terms of the German version of this Agreement and this
translation, the German version shall prevail.

    

    Cancellation
Agreement

    between

    

    The shareholders of Qnective AG,
represented by Oswald Ortiz, Thurgauerstrasse 54, 8050
Zurich,

    (QNV)

    

    and

    

    Zurich Management Group, represented
by Zoran Trifkovic, Thurgauerstrasse 54, 8050 Zurich,

    (ZMG)

    

    1. Termination of
Agreements

    

    The
Consultancy Agreement dated December 20, 2007, relating to “Business Development
Support” and the associated Supplementary Agreement dated June 20, 2008, are
hereby terminated with effect from March 31, 2009. The mandate of Mr. Zoran
Trifkovic on the Board of Directors of Qnective AG shall end on the same date;
the shareholders of QNV hereby relieve him of his duties in this
capacity.

    

    2. Settlement

    

    The
parties hereby agree to a lump-sum settlement payment of CHF 3,850 to satisfy
all claims of ZMG and Mr. Zoran Trifkovic. Neither party shall have any
additional claims following payment of this settlement.

    

    3. Place of jurisdiction and applicable
law

    

    The
place of jurisdiction for any disputes arising out of this Agreement shall be
Zurich. This Agreement is governed by Swiss law.

    

    Zurich
and Schlieren, March 30, 2009

    

    
      
        	
                The
      shareholders of Qnective AG

              	
                Zurich
      Management Group

              
	 
      	 
      
	
                /s/
      Oswald Ortiz

              	
                /s/
      Zoran Trifkovic

              
	
                Oswald
      Ortiz

              	
                Zoran
      Trifkovic

              

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    Amendment
No. 1 to Cancellation Agreement

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    Zurich,
March 31, 2009

    

    Zurich
Management Group

    Mr. Zoran
Trifkovic

    Thurgauerstrasse
54

    8050
Zurich

    

    Appendix
to the cancellation agreement between Qnective AG, Zurich, and Zurich Management
Group dated March 30, 2009

    

    Dear Mr.
Trifkovic,

    

    As per
our conversation yesterday, we can contractually stipulate the following in the
form of an appendix to the aforementioned cancellation agreement:

    

    
      	
               
      

            	
              -

            	
              It
      is now agreed that, regardless of any condition originally set, all
      350,000 options are owed on March 31, 2009, and will be issued when the
      option plan is instated.

            

    

    

    Thank you
again for the services you have provided.

    

    Sincerely,

    

    
      
        	
                For
      Qnective AG

              	
                For
      Zurich Management Group

              
	 
      	 
      
	
                /s/
      Oswald Ortiz

              	
                /s/
      Zoran Trifkovic

              
	
                Oswald
      Ortiz

              	
                Zoran
      Trifkovic

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    Subscription
Agreement

    
      
         

      

      
        2THIS
SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE
TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“1933 ACT”).

     

    NONE
OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION
AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.

     

    SUBSCRIPTION
AGREEMENT

    (Offshore
Subscribers)

     

    
      	
              TO:

            	
              Qnective,
      Inc. (the “Company”)

            

    

    c/o
Qnective (Switzerland) AG

    Thurgauerstrasse
54, CH-8050, Zurich, Switzerland

     

    
      Purchase of
Shares

    

     

    
      	
              1.

            	
              Subscription

            

    

     

    1.1                     On
the basis of the representations and warranties and subject to the terms and
conditions set forth herein and the Company's Equity Incentive Plan, a copy of
which is annexed hereto as Exhibit A, the Company hereby grants to ZMG — Zurich
Management Group (the “Subscriber”) an irrevocable
Stock Right to subscribe for and receive 350,000 shares of the Company’s common
stock (“Common Stock”),
par value $0.001 per share (each a “Share” and collectively the “Shares”) in consideration for
services rendered to the Company.  For purposes of this Subscription
Agreement and in accordance with the terms of the Plan, the Board of Directors
has determined that each share be valued at a price per Share of US$.14 (the
subscription and agreement to transfer being the “Subscription”), a price per
share in excess of the closing price on the OTC Bulletin Board on the date of
grant of these Stock Rights, representing additional compensation to Subscriber
in 2009 of $49,000.  For purposes of the Plan Subscriber shall be
deemed a Key Person and this Subscription Agreement shall be deemed a Stock
Rights Agreement.  Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed in the Plan.

     

    1.2                     The
Shares may also be hereafter referred to, collectively, as the “Securities”.

     

    1.3                     On
the basis of the representations and warranties and subject to the terms and
conditions set forth herein, the Company hereby irrevocably agrees to transfer
the Shares to the Subscriber.

     

    1.4                     Subject
to the terms hereof, the Subscription will be effective on July 22,
2009.

     

    
      	
              2.

            	
              Consideration

            

    

     

    2.1                     The
Company hereby acknowledges and agrees that the value of the services provided
by Subscriber prior to the date of this Subscription Agreement is equal to or
greater than the value of the Stock Rights granted hereunder.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      	
              3.

            	
              Documents Required
      from Subscriber

            

    

     

    3.1                     The
Subscriber must complete, sign and return to the Company an executed copy of
this Subscription Agreement.

     

    3.2                     The
Subscriber shall complete, sign and return to the Company as soon as possible,
on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, the Financial
Industry Regulatory Authority's Over the Counter Bulletin Board (the “OTCBB”)
and applicable law.

     

    
      	
              4.

            	
              Closing

            

    

     

    4.1                     The
transfer of the Shares shall be completed (the “Closing”) as of July 22, 2009
(the “Closing
Date”).

     

    4.2                     At
the Closing, or promptly thereafter, the Company will deliver a certificate for
the Shares registered as provided in this Subscription Agreement.

     

    
      	
              5.

            	
              Acknowledgements of
      Subscriber

            

    

     

    5.1                     The
Subscriber acknowledges and agrees that:

     

    
      	
               
      

            	
              (a)

            	
              none
      of the Securities have been or will be registered under the Securities
      Act, or under any state securities or “blue sky” laws of any state of the
      United States, and, unless so registered, may not be offered or sold in
      the United States or, directly or indirectly, to U.S. Persons, as that
      term is defined in Regulation S under the Securities Act (“Regulation S”), except
      in accordance with the provisions of Regulation S, pursuant to an
      effective registration statement under the Securities Act, or pursuant to
      an exemption from, or in a transaction not subject to, the registration
      requirements of the Securities Act and in each case only in accordance
      with applicable state securities
laws;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Company has not undertaken, and will have no obligation, to register any
      of the Securities under the Securities Act or any other securities
      legislation;

            

    

     

    
      	
               
      

            	
              (c)

            	
              it
      has received and carefully read this Subscription
    Agreement;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      decision to execute this Subscription Agreement and purchase the Shares
      agreed to be purchased hereunder has not been based upon any oral or
      written representation as to fact or otherwise made by or on behalf of the
      Company and such decision is based entirely upon a review of any public
      information which has been filed by the Company with the Securities and
      Exchange Commission (“Commission”) in
      compliance, or intended compliance, with applicable securities
      legislation;

            

    

     

    
      	
               
      

            	
              (e)

            	
              it
      and its advisor(s) have had a reasonable opportunity to ask questions of
      and receive answers from the Company in connection with the sale of the
      Shares hereunder, and to obtain additional information, to the extent
      possessed or obtainable by the Company without unreasonable effort or
      expense;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      books and records of the Company were available upon reasonable notice for
      inspection, subject to certain confidentiality restrictions, by the
      Subscriber during reasonable business hours at its principal place of
      business and that all documents, records and books in connection with the
      sale of the Securities hereunder have been made available for inspection
      by it and its attorney and/or
advisor(s);

            

    

     

    
      	
               
      

            	
              (g)

            	
              all
      information which the Subscriber has provided to the Company is correct
      and complete as of the date the Subscription Agreement is signed, and if
      there should be any change in such information prior to this Subscription
      Agreement being executed by the Company, the Subscriber will immediately
      provide the Company with such
information;

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (h)

            	
              the
      Company is entitled to rely on the representations and warranties of the
      Subscriber contained in this Subscription Agreement and the Subscriber
      will hold the Company harmless from any loss or damage it may suffer as a
      result of the Subscriber’s failure to correctly complete this Subscription
      Agreement;

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Subscriber has been advised to consult the Subscriber’s own legal, tax and
      other advisors with respect to the merits and risks of an investment in
      the Securities and with respect to applicable resale restrictions, and it
      is solely responsible (and the Company is not in any way responsible) for
      compliance with:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      applicable laws of the jurisdiction in which the Subscriber is resident in
      connection with the distribution of the Securities hereunder,
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              applicable
      resale restrictions;

            

    

     

    
      	
               
      

            	
              (j)

            	
              none
      of the Securities are listed on any stock exchange or automated dealer
      quotation system and no representation has been made to the Subscriber
      that any of the Securities will become listed on any stock exchange or
      automated dealer quotation system, except that currently certain market
      makers make a market in the common shares of the Company on the OTCBB
      operated by the Financial Industry Regulatory Authority, Inc.
      (“FINRA”);

            

    

     

    
      	
               
      

            	
              (k)

            	
              none
      of the Securities may be offered or sold by the Subscriber to a U.S.
      Person (as defined in Section 6.2, below), or for the account or benefit
      of a U.S. Person (other than a distributor) prior to the end of the
      Distribution Compliance Period (as defined
  herein);

            

    

     

    
      	
               
      

            	
              (l)

            	
              the
      Company will refuse to register any transfer of the Securities not made in
      accordance with the provisions of Regulation S, pursuant to an effective
      registration statement under the Securities Act or pursuant to an
      available exemption from the registration requirements of the Securities
      Act and in each case in accordance with applicable state securities
      laws;

            

    

     

    
      	
               
      

            	
              (m)

            	
              neither
      the Commission nor any other securities commission or similar regulatory
      authority has reviewed or passed on the merits of the
      Securities;

            

    

     

    
      	
               
      

            	
              (n)

            	
              no
      documents in connection with the transfer of the Shares hereunder have
      been reviewed by the Commission or any state securities
      administrators;

            

    

     

    
      	
               
      

            	
              (o)

            	
              there
      is no government or other insurance covering any of the
      Securities;

            

    

     

    
      	
               
      

            	
              (p)

            	
              the
      issuance and sale of the Securities to the Subscriber will not be
      completed if it would be unlawful or if, in the discretion of the Company
      acting reasonably, it is not in the best interests of the
      Company;

            

    

     

    
      	
               
      

            	
              (q)

            	
              the
      Subscriber is purchasing the Securities pursuant to an exemption from the
      registration and the prospectus requirements of applicable securities
      legislation on the basis that the Subscriber is not a resident of the
      United States and, as a
consequence:

            

    

     

    
      	
               
      

            	
              (i)

            	
              is
      restricted from using most of the civil remedies available under
      securities legislation,

            

    

     

    
      	
               
      

            	
              (ii)

            	
              may
      not receive information that would otherwise be required to be provided
      under securities legislation, and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Company is relieved from certain obligations that would otherwise apply
      under securities legislation;

            

    

     

    
      	
               
      

            	
              (r)

            	
              the
      statutory and regulatory basis for the exemption claimed for the offer and
      sale of the Securities, although in technical compliance with Regulation
      S, would not be available if the offering is part of a plan or scheme to
      evade the registration provisions of the Securities Act;
    and

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (s)

            	
              this
      Subscription Agreement is not enforceable by the Subscriber unless it has
      been accepted by the Company.

            

    

     

    
      	
              6.

            	
              Representations,
      Warranties and Covenants of the
  Subscriber

            

    

     

    6.1       The
Subscriber hereby represents and warrants to and covenants with the Company
(which representations, warranties and covenants shall survive the Closing)
that:

     

    
      	
               
      

            	
              (a)

            	
              the
      Subscriber is not a U.S. Person;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Subscriber is not acquiring the Securities for the account or benefit of,
      directly or indirectly, any U.S.
Person;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Subscriber is resident in the jurisdiction set out on the signature page
      of this Subscription Agreement and the transfer of the Securities to the
      Subscriber as contemplated in this Subscription Agreement complies with or
      is exempt from the applicable securities legislation of the jurisdiction
      of residence of the Subscriber;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Subscriber has the legal capacity and competence to enter into and execute
      this Subscription Agreement and to take all actions required pursuant
      hereto and, if the Subscriber is a corporation, it is duly incorporated
      and validly subsisting under the laws of its jurisdiction of incorporation
      and all necessary approvals by its directors, shareholders and others have
      been obtained to authorize execution and performance of this Subscription
      Agreement on behalf of the
Subscriber;

            

    

     

    
      	
               
      

            	
              (e)

            	
              if
      the Subscriber is a corporation or other entity, the entering into of this
      Subscription Agreement and the transactions contemplated hereby do not and
      will not result in the violation of any of the terms and provisions of any
      law applicable to, or the outstanding documents of, the Subscriber or of
      any agreement, written or oral, to which the Subscriber may be a party or
      by which the Subscriber is or may be
bound;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Subscriber is acquiring the Securities as principal for its own account
      for investment purposes only and not for the account of any other person
      and not for distribution, assignment or resale to others, and no other
      person has a direct or indirect beneficial interest in such Securities,
      and it has not subdivided its interest in the Securities with any other
      person;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      Subscriber is outside the United States when receiving and executing this
      Subscription Agreement and is acquiring the Securities as principal for
      the Subscriber’s own account for investment purposes only, and not with a
      view to, or for, resale, distribution or fractionalisation thereof, in
      whole or in part, and no other person has a direct or indirect beneficial
      interest in the Securities;

            

    

     

    
      	
               
      

            	
              (h)

            	
              the
      Subscriber is aware that an investment in the Company is speculative and
      involves certain risks, including the possible loss of the entire
      investment and it has carefully read and considered the matters set forth
      under the heading “Risk Factors” appearing in the Company’s Form 10-KSB,
      and the Company’s Form 10-Q, Form 8-K and any other periodic filings filed
      from time to time with the
Commission;

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Subscriber has made an independent examination and investigation of an
      investment in the Securities and the Company and has depended on the
      advice of its legal and financial advisors and agrees that the Company
      will not be responsible in any way whatsoever for the Subscriber’s
      decision to invest in the Securities and the
  Company;

            

    

     

    
      	
               
      

            	
              (j)

            	
              the
      Subscriber (i) has adequate net worth and means of providing for its
      current financial needs and possible personal contingencies, (ii) has no
      need for liquidity in this investment, and (iii) is able to bear the
      economic risks of an investment in the Securities for an indefinite period
      of time;

            

    

     

    
      	
               
      

            	
              (k)

            	
              the
      Subscriber understands and agrees that the Company and others will rely
      upon the truth and accuracy of the acknowledgements, representations and
      agreements contained in this Subscription Agreement and agrees that if any
      of such acknowledgements, representations and agreements are no longer
      accurate or have been breached, the Subscriber shall promptly notify the
      Company;

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (l)

            	
              the
      Subscriber has the legal capacity and competence to enter into and execute
      this Subscription Agreement and to take all actions required pursuant
      hereto;

            

    

     

    
      	
               
      

            	
              (m)

            	
              the
      Subscriber has duly executed and delivered this Subscription Agreement and
      it constitutes a valid and binding agreement of the Subscriber enforceable
      against the Subscriber in accordance with its
  terms;

            

    

     

    
      	
               
      

            	
              (n)

            	
              the
      Subscriber is not an underwriter of, or dealer in, the Common Stock of the
      Company, nor is the Subscriber participating, pursuant to a contractual
      agreement or otherwise, in the distribution of any of the
      Securities;

            

    

     

    
      	
               
      

            	
              (o)

            	
              the
      Subscriber understands and agrees that none of the Securities have been or
      will be registered under the Securities Act or under any state securities
      or “blue sky” laws of any state of the United States and, unless so
      registered, may not be offered or sold in the United States or directly or
      indirectly to U.S. Persons, except in accordance with the provisions of
      Regulation S (“Regulation “S”) promulgated under the Securities Act,
      pursuant to an effective registration statement under the Securities Act,
      or pursuant to an exemption from, or in a transaction not subject to, the
      registration requirements of the Securities Act and in each case only in
      accordance with applicable state securities laws consistent with the laws
      of any other applicable
jurisdiction;

            

    

     

    
      	
               
      

            	
              (p)

            	
              the
      Subscriber understands and agrees that offers and sales of any of the
      Securities prior to the expiration of a period of six months after the
      date of original issuance of the Securities (the six month period
      hereinafter referred to as the “Distribution Compliance
      Period”) shall only be made in compliance with the safe harbor
      provisions set forth in Regulation S, pursuant to the registration
      provisions of the Securities Act or an exemption therefrom, and that all
      offers and sales after the Distribution Compliance Period shall be made
      only in compliance with the registration provisions of the Securities Act
      or an exemption therefrom and in each case only in accordance with
      applicable state securities laws;

            

    

     

    
      	
               
      

            	
              (q)

            	
              the
      Subscriber has not acquired the Securities as a result of, and it
      covenants that it will not itself engage in, any “directed selling
      efforts” (as defined in Regulation S) in the United States in respect of
      any of the Securities which would include any activities undertaken for
      the purpose of, or that could reasonably be expected to have the effect
      of, conditioning the market in the United States for the resale of any of
      the Securities; provided, however, that the Subscriber may sell or
      otherwise dispose of any of the Securities pursuant to registration of any
      of the Securities pursuant to the Securities Act and any applicable state
      securities laws or under an exemption from such registration requirements,
      as otherwise provided herein and in compliance with any other applicable
      securities laws;

            

    

     

    
      	
               
      

            	
              (r)

            	
              the
      Subscriber agrees not to engage in any hedging transactions involving any
      of the Securities unless such transactions are in compliance with the
      provisions of the Securities Act and in each case only in accordance with
      applicable state securities laws;

            

    

     

    
      	
               
      

            	
              (s)

            	
              the
      Subscriber understands and agrees that the Company will refuse to register
      any transfer of the Securities not made in accordance with the provisions
      of Regulation S, pursuant to an effective registration statement under the
      Securities Act or pursuant to an available exemption from the registration
      requirements of the Securities Act;

            

    

     

    
      	
               
      

            	
              (t)

            	
              the
      Subscriber (i) is able to fend for itself in the Subscription; (ii) has
      such knowledge and experience in financial and business matters as to be
      capable of evaluating the merits and risks of its investment in the
      Securities and the Company; and (iii) has the ability to bear the economic
      risks of its prospective investment and can afford the complete loss of
      such investment;

            

    

     

    
      	
               
      

            	
              (u)

            	
              the
      Subscriber is not aware of any advertisement of any of the Securities and
      is not acquiring the Securities as a result of any form of general
      solicitation or general advertising including advertisements, articles,
      notices or other communications published in any newspaper, magazine or
      similar media or broadcast over radio or television, or any seminar or
      meeting whose attendees have been invited by general solicitation or
      general advertising; and

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (v)

            	
              no
      person has made to the Subscriber any written or oral
      representations:

            

    

     

    
      	
               
      

            	
              (i)

            	
              that
      any person will resell or repurchase any of the
  Securities,

            

    

     

    
      	
               
      

            	
              (ii)

            	
              that
      any person will refund the purchase price of any of the
      Securities,

            

    

     

    
      	
               
      

            	
              (iii)

            	
              as
      to the future price or value of any of the Securities,
  or

            

    

     

    
      	
               
      

            	
              (iv)

            	
              that
      any of the Securities will be listed and posted for trading on any stock
      exchange or automated dealer quotation system or that application has been
      made to list and post any of the Securities of the Company on any stock
      exchange or automated dealer quotation system, except that currently the
      Company’s Common Stock is quoted on the Over-The-Counter Bulletin Board
      (“OTCBB”) operated by FINRA.

            

    

     

    6.2                      In
this Subscription Agreement, the term “U.S. Person” shall have the meaning
ascribed thereto in Regulation S.

     

    7.           Representations,
Warranties and Covenants of the Company

     

    7.1          Except
as set forth or incorporated by reference into the reports required to be filed
by the Company during the two years preceding the date hereof (the “SEC
Reports”) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), the Company hereby makes the following representations and warranties to
the Subscriber:

     

    
      	
               
      

            	
              (a)

            	
              Organization, Good Standing and
      Qualification.  The Company is a corporation duly
      organized, validly existing and in good standing under the laws of the
      State of Nevada and has full corporate power and authority to conduct its
      business as currently conducted.  The Company is duly qualified
      to do business as a foreign corporation and is in good standing in all
      jurisdictions in which the character of the property owned or leased or
      the nature of the business transacted by it makes qualification necessary,
      except where any failure to be so qualified would not, individually or in
      the aggregate, have a material adverse effect on (i) the business,
      properties, financial condition or results of operations of the Company or
      (ii) the transactions contemplated hereby or by the agreements and
      instruments to be entered into in connection herewith or therewith or on
      the ability of the Company to perform its obligations hereunder (a
      “Material Adverse Effect”).

            

    

     

    
      	
               
      

            	
              (b)

            	
              Issuance of
      Shares.  The issuance of the Shares has been duly and
      validly authorized by all necessary corporate action and no further action
      is required by the Company or its stockholders in connection
      therewith.  The Shares, when issued will be validly issued,
      fully paid and non-assessable shares of Common Stock of the
      Company.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Authorization;
      Enforceability.  The Company has all corporate right,
      power and authority to enter into this Agreement and to consummate the
      transactions contemplated hereby.  All corporate action on the
      part of the Company necessary for the authorization, execution, delivery
      and performance of this Agreement by the Company has been taken and no
      further action is required by the Company or its stockholders in
      connection therewith.  This Agreement has been (or upon delivery
      will have been) duly executed by the Company and, when delivered in
      accordance with the terms hereof, will constitute the legal, valid and
      binding obligation of the Company, enforceable against the Company in
      accordance with its terms except as limited by (i) applicable bankruptcy,
      insolvency, reorganization, moratorium and other laws of general
      application affecting enforcement of creditors' rights generally, (ii)
      laws relating to the availability of specific performance, injunctive
      relief or other equitable remedies, and (iii) laws, or public policy
      underlying such laws, relating to indemnification and
      contribution.

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
              8.

            	
              Representations and
      Warranties will be Relied Upon by the
  Company

            

    

     

    8.1                     The
Subscriber acknowledges that the representations and warranties contained herein
are made by it with the intention that such representations and warranties may
be relied upon by the Company and its legal counsel in determining the
Subscriber’s eligibility to purchase the Securities under applicable securities
legislation.  The Subscriber further agrees that by accepting delivery
of the certificates representing the Shares, it will be representing and
warranting that the representations and warranties contained herein are true and
correct as at the Closing Date with the same force and effect as if they had
been made by the Subscriber on the date of this Subscription Agreement and that
they will survive the transfer to the Subscriber of the Shares and will continue
in full force and effect notwithstanding any subsequent disposition by the
Subscriber of such Securities.

     

    
      	
              9.

            	
              Resale
      Restrictions

            

    

     

    9.1                     The
Subscriber acknowledges that the Shares are not transferable and that any resale
of any of the other Securities will be subject to resale restrictions contained
in the securities legislation applicable to each Subscriber or proposed
transferee.  The Subscriber acknowledges that the Securities have not
been registered under the Securities Act or the securities laws of any state of
the United States and that none of the Securities may be offered or sold in the
United States unless registered in accordance with United States federal
securities laws and all applicable state securities laws or exemptions from such
registration requirements are available.

     

    9.2                     The
Subscriber acknowledges that restrictions on the transfer, sale or other
subsequent disposition of the Securities by the Subscriber may be imposed by
securities laws in addition to any restrictions referred to in Section 9.1
above, and, in particular, the Subscriber acknowledges and agrees that none of
the Securities may be offered or sold to a U.S. Person or for the account or
benefit of a U.S. Person (other than a distributor) prior to the end of the
Distribution Compliance Period.

     

    
      	
              10.

            	
              Acknowledgement and
      Waiver

            

    

     

    10.1                    The
Subscriber has acknowledged that the decision to purchase the Securities was
solely made on the basis of information available to the Subscriber on the EDGAR
database maintained by the Commission at www.sec.gov.  The
Subscriber hereby waives, to the fullest extent permitted by law, any rights of
withdrawal, rescission or compensation for damages to which the Subscriber might
be entitled in connection with the distribution of the Securities.

     

    
      	
              11.

            	
              Legending of Subject
      Securities

            

    

     

    11.1                    The
Subscriber hereby acknowledges that that upon the issuance thereof, and until
such time as the same is no longer required under the applicable securities laws
and regulations, the certificates representing any of the Securities will bear a
legend in substantially the following form:

     

    
      	
               
      

            	
              “THESE
      SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
      U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S (“REGULATION S”)
      UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
      ACT”).  ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS
      CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S.
      STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR
      SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS
      DEFINED IN REGULATION S) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
      STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
      SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE
      ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION,
      HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
      IN ACCORDANCE WITH THE 1933 ACT.”

            

    

     

    11.2                     The
Subscriber hereby acknowledges and agrees to the Company's making a notation on
its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Subscription Agreement.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
              12.

            	
              Costs

            

    

     

    12.1                    The
Subscriber acknowledges and agrees that all costs and expenses incurred by the
Subscriber (including any fees and disbursements of any special counsel retained
by the Subscriber) relating to the purchase of the Shares shall be borne by the
Subscriber.

     

    
      	
              13.

            	
              Governing
      Law

            

    

     

    13.1                    This
Subscription Agreement is governed by the laws of the State of New York
applicable to agreements made and to be performed solely within such state
without reference to, or application of, principles of conflicts of
law.

     

    
      	
              14.

            	
              Survival

            

    

     

    14.1                    This
Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Securities by the Subscriber pursuant
hereto.

     

    
      	
              15.

            	
              Assignment

            

    

     

    15.1                    This
Subscription Agreement is not transferable or assignable.

     

    
      	
              16.

            	
              Severability

            

    

     

    16.1                    The
invalidity or unenforceability of any particular provision of this Subscription
Agreement shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription Agreement.

     

    
      	
              17.

            	
              Entire
      Agreement

            

    

     

    17.1                    Except
as expressly provided in this Subscription Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Subscription Agreement contains the entire agreement between the parties with
respect to the sale of the Securities and there are no other terms, conditions,
representations or warranties, whether expressed, implied, oral or written, by
statute or common law, by the Company or by anyone else.

     

    
      	
              18.

            	
              Notices

            

    

     

    18.1                    All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication.  Notices to the Subscriber shall be directed to the
address on the signature page of this Subscription Agreement and notices to the
Company shall be directed to it at Qnective, Inc., c/o Qnective (Switzerland)
AG., Thurgauerstrasse 54, CH-8050, Zurich, Switzerland, Attention:
President.

     

    
      	
              19.

            	
              Counterparts and
      Electronic Means

            

    

     

    19.1                    This
Subscription Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original and all of
which together shall constitute one instrument.  Delivery of an
executed copy of this Subscription Agreement by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy will be deemed to be execution and delivery of this Subscription
Agreement as of the date hereinafter set forth.

     

    
      	
              20.

            	
              Delivery
      Instructions

            

    

     

    20.1                    The
Subscriber hereby directs the Company to deliver any certificates representing
the Shares issued pursuant to this Subscription Agreement
to:

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    ZMG—Zurich
Management Group

    Thurgauerstrasse
54

    CH-8050

    Zurich,
Switzerland

    Attention:  Mr.
Zoran Trifkovic

    

    20.2                   The
Subscriber hereby directs the Company to cause any certificates representing the
Shares issued pursuant to this Subscription Agreement to be registered on the
books of the Company as follows:

    

    ZMG—Zurich
Management Group

    

    20.3                   The
undersigned hereby acknowledges that it will deliver to the Company all such
additional completed forms in respect of the Subscriber’s purchase of the
Securities as may be required for filing with the appropriate securities
commissions and regulatory authorities.

     

    IN WITNESS WHEREOF the
Subscriber has duly executed this Subscription Agreement as of the date of
acceptance by the Company.

    

    
      	 
      	
              ZMG—ZURICH MANAGEMENT
  GROUP

            
	 
      	
              (Name
      of Subscriber – Please type or print)

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Zoran Trifkovic

            
	 
      	 
      	
              Zoran
      Trifkovic

            
	 
      	 
      	
              President

            
	 
      	 
      
	 
      	
              Thurgauerstrasse 54

            
	 
      	
              (Address
      of Subscriber)

            
	 
      	 
      
	 
      	
              (City,
      State or Province, Postal Code of Subscriber)

            
	 
      	 
      
	 
      	
              Zurich, Switzerland

            
	 
      	
              (Country
      of Subscriber)

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    ACCEPTANCE

     

    The
above-mentioned Subscription Agreement in respect of the Shares is hereby
accepted by Qnective, Inc.

     

    DATED at
Zurich, Switzerland as of the 22ND day of
July, 2009.

    

    
      	
              QNECTIVE,
      INC.

            
	 
      
	
              By:

            	
              /s/ Oswald Ortiz

            	 
      
	 
      	
              Oswald
      Ortiz

            
	 
      	
              Chief
      Executive Officer

            
	 
      	 
      

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    AMENDED
AND RESTATED

    

    EQUITY
INCENTIVE PLAN

    

    OF

    

    QNECTIVE,
INC.

    

    ARTICLE
I

    

    PURPOSES
OF PLAN

    

    Qnective,
Inc., a Nevada corporation (the “Company”), has adopted The Qnective Equity
Incentive Plan (the “Original Plan”), effective as of April 1,
2009.  The Company amended the Original Plan as of May 25, 2009 and
further amended and restated the Original Plan as of July 20, 2009 (as so
amended and restated, the “Plan”).  The purpose of the Plan is to
enable Qnective and its subsidiaries to attract, retain, and reward Key Persons
(as hereinafter defined) by offering them an opportunity to have a greater
proprietary interest in, and closer identity with, the Company and with its
financial success.  An option granted under the Plan to a Key Person
to purchase Shares (as hereinafter defined) of common stock of the Company, may
be an Incentive Stock Option or a Non-Qualified Option as defined by the Code
(as hereinafter defined) (collectively referred to as “Options”).  An
Option that is not an Incentive Stock Option shall be a Non-Qualified
Option.  Proceeds received by the Company from the sale of the Shares
pursuant to Options granted under this Plan, shall be used for general corporate
purposes.  The Company may also grant Stock Rights (as hereinafter
defined) to Key Persons.  This Plan shall expire on March 31, 2019
(the “Expiration Date”).

    

    ARTICLE
II

    

    DEFINITIONS

    

    As used
in this Plan, the terms set forth below shall be defined as
follows:

    

    “Beneficiary”
means the person, persons, trust, or trusts entitled by will or the laws of
descent and distribution to receive a Key Person’s benefits under this Plan in
the event of such Key Person’s death.

    

    “Board”
or “Board of Directors” means the Board of Directors of the Company as elected
by the Shareholders.

    

    “Code”
means the U.S. Internal Revenue Code of 1986 and regulations issued thereunder
as they may be amended from time to time.

    

    “Commission”
means the U.S. Securities and Exchange Commission.

    

    "Company"
means Qnective, Inc.

    

    “Date of
Grant” means the date, as determined by the Board in its sole discretion, upon
which an Option is awarded or Stock Right is granted.

    

    “Exchange
Act” means the U.S. Securities Exchange Act of 1934, as
amended.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    "Expiration
Date" means March 31, 2019.

    

    “Fair
Market Value Price” means, as of the Date of Grant, such value as the Board of
Directors in good faith shall determine for purposes of granting Options or
Stock Rights under the Plan.

    

    “Incentive
Stock Option” means a stock option which meets the requirements of §422 of the
Code.  If any option designated as an Incentive Stock Option does not
meet the requirements of §422 of the Code, such Option shall be treated as a
Non-Qualified Option for all purposes under the provisions of the
Plan.

    

    “Key
Person” means officers, directors, consultants, professional advisors and any
employees of the Company who are deemed by the Board to be eligible for grants
of Options or Stock Rights because of their existing or potential contributions
to the welfare of the Company.

    

    “Non-Qualified
Option” means a stock option which does not meet the requirements of §422 of the
Code with respect to Incentive Stock Options.

    

    “Option”
or “Options” means both an Incentive Stock Options and a Non-Qualified Options
granted under the Plan.

    

    “Option
Agreement” means an agreement between the Company and a Key Person setting forth
the terms and conditions upon which an Option is granted to a Key
Person.  Such agreement, at the discretion of the Board, may
incorporate by reference the terms and conditions of the Plan.

    

    “Personal
Representative” means the person or persons who, upon the death, disability or
incompetence of a Key Person, shall have acquired on behalf of the Key Person by
legal proceeding or otherwise the power to exercise the rights and receive the
benefits of such Key Person under this Plan or a trustee in
bankruptcy.

    

    “Securities
Act” means the U.S. Securities Act of 1933, as amended.

    

    “Shares”
means $.001, par value shares of the common stock of the Company.

    

    “Shareholder” means a
beneficial owner of Shares.

    

    “Stock
Right” means the right to receive Shares.

    

    “Stock Right
Agreement”or
“Subscription
Agreement”
means an agreement between the Company and a Key Person setting forth the terms
and conditions upon which Stock Rights are granted to a Key
Person.  Such agreement, at the discretion of the Board, may
incorporate by reference the terms and conditions of the Plan.

    

    “Subsidiary”
means a present or future subsidiary of the Company as is defined in §424(f) of
the Code.  For purposes of the Plan, an eligible Key Person of the
Company shall include Key Persons of any Subsidiary.

    

    “Wrongful
Activities” means the commission of, conspiracy to commit, or attempt to commit,
any criminal act in any manner relating to the Company or a Key Person’s willful
or grossly negligent action which is demonstrably inimical to the interests,
business, or reputation of the Company or any Subsidiary.

    

    ARTICLE
III

    

    EFFECTIVE
DATE OF PLAN

    

    The Plan
shall become effective as of April 1, 2009, and shall remain in effect through
the Expiration Date of the Plan, except as may otherwise be provided
herein.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    ARTICLE
IV

    

    ADMINISTRATION
OF THE PLAN

    

    A.           The
Plan shall be administered by the Board of Directors.

    

    B.           The
Board is authorized to administer and interpret the Plan, to adopt, amend, and
rescind from time to time such rules and regulations for carrying out the Plan
as it may deem advisable, and to make all other determinations and take such
steps as it may deem necessary or advisable for the administration of the Plan,
subject to the terms, conditions, and limitations of the Plan.  The
Board shall have the sole authority:

    

    1.           to
select the Key Persons to whom Options or Stock Rights will be granted under the
Plan;

    

    2.           to
designate the type of Option to be granted under the Plan as an Incentive Stock
Option or a Non-Qualified Option;

    

    3.           to
determine the number of Shares to be covered by Options granted under the Plan,
and the option price thereof subject to Article VII hereof;

    

    4.           to
determine the number of Shares to be granted pursuant to Stock
Rights;

    

    5.           to
determine the time or times when Stock Rights will be granted and when Options
shall be granted and the period during which they will be
exercisable;

    

    6.           to
determine the form of any Stock Rights Agreement, Subscription Agreement, or
Option Agreements;

    

    7.           to
impose such conditions on the issuance of Stock Rights or the grant or exercise
of an Option as it determines are appropriate;

    

    8.           to
determine any question as to the termination of service of a Key Person with or
for the Company, and the duration and purposes of leaves of absence which may be
granted to Key Persons without constituting a termination of employment or
termination of services for purposes of the Plan; and

    

    9.           to
determine what events, if any, will result in the acceleration of a Stock Right
or the exercisability of all or any portion of an Option.

    

    The
determination of the Board, in any of the foregoing respects shall be final,
conclusive, and binding as to all concerned.

    

    C.           The
Board may request the recommendations of the officers of the Company with
respect to participation under the Plan of all Key Persons.

    

    D.           A
majority of the Board shall constitute a quorum and make all determinations,
take all actions, and conduct business in respect of the Plan. Any Board action
may be taken or determined without a meeting if all members thereof shall
consent in writing to such action or determination.  In the event
action by the Board is taken by written consent, the action shall be deemed to
have been taken at the time specified in the consent or, if none is specified,
at the time of the last signature.  The Board may delegate
administrative functions in respect of the Plan to individuals who are officers
or employees of the Company.  All determinations or interpretations
made by the Board shall be final and conclusive.  No members of the
Board shall be liable for any action, determination, interpretation or omission
taken or made in good faith with respect to the Plan or any Options or Stock
Rights granted hereunder.

    

    E.           All
costs and expenses incurred in connection with the administration of the Plan,
including any stock transfer taxes, shall be borne by the
Company.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    ARTICLE
V

    

    SHARES
SUBJECT TO THE PLAN

    

    A.           Subject
to the provisions of Article XII hereof, an aggregate of 3,000,000 Shares shall
be reserved for issuance upon the grant of Stock Rights or the exercise of
Options granted under the Plan.

    

    B.           The
Shares issued pursuant to Stock Rights and the Options to be granted under the
Plan shall be made available either from authorized but unissued Shares or from
Shares reacquired by the Company, including, if applicable, Shares purchased in
the open market.

    

    C.           If
prior to the Expiration Date any Stock Rights or Options granted under the Plan
expire because of non-exercise, or are terminated prior to exercise pursuant to
the provisions of the Plan, the Shares subject to such Stock Rights or Options
shall again become available for the grant of Stock Rights or Options under the
Plan (unless in the meantime the Plan has been terminated).

    

    ARTICLE
VI

    

    ELIGIBILITY

    

    Stock
Rights and Options may be granted under the Plan only to persons who are
designated as Key Persons of the Company or its Subsidiaries by the Board
whether or not such persons are salaried employees of the
Company.  However, Key Persons who are not also employees of the
Company are not eligible to receive qualified Incentive Stock
Options.

    

    ARTICLE
VII

    

    OPTION
PRICE; VESTING

    

    The
option price for any Option granted under the Plan shall be the Fair Market
Value Price of the Shares at the day of grant.  Vesting shall be as
set forth in the Option Agreement or Stock Rights Agreement.

    

    ARTICLE
VIII

    

    GRANTING
OF OPTIONS AND STOCK RIGHTS

    

    A.           The
Board may at any time prior to the Expiration Date grant to Key Persons Stock
Rights and Options to purchase Shares under the Plan.

    

    B.           Each
grant of an Option under the Plan shall be evidenced by an Option Agreement
between the Key Person and the Corporation which clearly identifies the type of
Option granted (Incentive Stock Option or Non-Qualified Option) and shall
contain provisions not inconsistent with the Plan.  Each Option grant
shall be approved by the Board. Key Persons may be granted Incentive Stock
Options or Non-Qualified Options.  The terms and conditions of such
Option Agreements need not be the same in each case and may be changed from time
to time by the Board.  Anything in this agreement to the contrary
notwithstanding, with respect to Incentive Stock Options granted pursuant to the
Plan, the aggregate Fair Market Value (determined as of the Date of Grant of
such Option) of the Shares which are exercisable for the first time by a Key
Person during any calendar year under the Plan (or any other plan adopted by the
Company) shall not exceed $100,000.

    

    C.           Each
grant of Stock Rights under the Plan shall be evidenced by a Stock Rights
Agreement or Subscription Agreement between the Key Person and the Corporation
which clearly identifies the terms and conditions of the Stock Right and shall
contain provisions not inconsistent with the Plan.  Each Stock Right
granted shall be approved by the Board.  The terms and conditions of
such Stock Rights Agreements need not be the same in each case and may be
changed from time to time by the Board.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ARTICLE
IX

    

    TERMS
OF OPTIONS AND STOCK RIGHTS

    

    A.           The
Board shall determine the time or times Stock Rights will be granted and when
Options shall be exercisable and conditions that need to be satisfied in order
for an Option to be exercised or stock to be issued pursuant to Stock
Rights.

    

    B.           An
outstanding Option or Stock Right may, in the sole discretion of the Board, be
modified or amended with respect to the time or times when such Stock Right or
Option becomes exercisable, provided such Stock Right or Option as so modified
is not less favorable to the Key Person.

    

    C.           Options
shall terminate upon the first to occur of the following events:

    

    1.           Termination
of the Option as provided in the Option Agreement; or

    

    2.           Termination
of the Option as provided in Articles X and XI; or

    

    3.           Expiration
of or earlier termination of the Plan.

    

    D.           Stock
Rights shall terminate in accordance with the terms and conditions of the Stock
Rights Agreement or Subscription Agreement but in no event later than the
Expiration Date.

    

    E.           Notwithstanding
any other provision of this Plan, the Board may impose, by rule, resolution or
Agreement, such conditions upon the exercise of Options or grant of Stock Rights
(including, without limitation, conditions limiting the time of exercise to
specified periods) as may be required to satisfy applicable regulatory
requirements, including, without limitation, Rule 16b-3 (or any successor rule)
promulgated by the Commission pursuant to the Exchange Act.

    

    ARTICLE
X

    

    ADDITIONAL
PROVISIONS RELATING TO ISSUANCE

    

    OF
STOCK RIGHTS AND GRANTS OF OPTIONS

    

    All
grants of Stock Rights and Options shall be subject to the following
provisions:

    

    A.           The
Company’s right to terminate the employment or engagement of the Key Person for
any reason, with or without cause, and without liability to the Key Person with
respect to any Stock Rights or Options shall be unrestricted.

    

    B.           Upon
each exercise of an Option, the purchase price for the Shares being purchased
shall be payable in full to the Company, in cash, or by certified check or wire
transfer.

    

    C.           Notwithstanding
the foregoing, the Board may, in its sole discretion, permit the issuance of
Shares pursuant to an Option upon such other payment terms as the Board deems
reasonable.

    

    D.           Shares
issued shall be represented by a separate stock certificate issued by the
Company.

    

    E.           No
fractional Shares shall be issued.

    

    F.           No
Option or Stock Right to receive Shares shall be transferable by the Key Person
other than by will or by the laws of descent and distribution.  Stock
Rights or Options may be exercised only by the Key Person, or by his, her, or
its Personal Representative.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    G.           No
person shall have the right and privileges of a Shareholder of the Company with
respect to Shares subject to, purchased, or received under an Option or a Stock
Right until the date of issue of such Shares.

    

    H.           No
Shares may be issued unless, and until any applicable requirements of the
Commission and any other regulatory agencies having jurisdiction shall have been
fully met.  As a condition precedent to the issuance of Shares, the
Company may require the Key Person to take any reasonable action to meet such
requirements, including representing to or otherwise satisfying the Company that
(i) the Key Person understands that the Company has no obligation to register
under the Securities Act, any state securities laws, or the laws of any other
applicable jurisdiction any of the Shares issuable upon exercise of Options or
issuance of Shares pursuant to Stock Rights and that such Shares may have to be
held indefinitely until so registered or unless an exemption from such
registration is available; (ii) the Key Person is receiving or purchasing the
Shares as an investment and not with a view to, or for sale in connection with,
the distribution of any of them; and (iii) the Key Person will not dispose of
such Shares absent compliance with any such requirements or receipt by the
Company of a written opinion of its counsel that the circumstances of such
proposed sale do not require such compliance; provided, however, that with
respect to any Shares issued hereunder that have been registered with the
Commission, no investment representation by the Key Person shall be required by
the Company; and, provided further, that in the event that the Shares issued to
the Key Person pursuant to Options or Stock Rights hereunder are subsequently
registered with the Commission, any investment representation theretofore
furnished to the Company as to such Shares will be inoperative.  The
Company may endorse certificates representing Shares with a legend indicating
any restrictions on the transfer thereof resulting from applicable securities
laws or otherwise.

    

    I.           1.           Whenever
the Company proposes or is required to issue Shares to a Key Person under the
Plan, the Company shall have the right to require the Key Person to remit to the
Company an amount sufficient to satisfy all federal, state, and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares.  If such certificates have been
delivered prior to the time a withholding obligation arises, the Company shall
have the right to require the Key Person to remit to the Company an amount
sufficient to satisfy all federal, state, or local withholding tax requirements
at the time such obligation arises and to withhold from other amounts payable to
the Key Person, as compensation or otherwise, as necessary.  Whenever
payments under the Plan are to be made to a Key Person in cash, such payments
shall be net of any amounts sufficient to satisfy all federal, state, and local
withholding tax obligation.

    

    2.           In
connection with the issuance of Shares a Key Person may elect to satisfy his,
her, or its tax withholding obligation incurred with respect to the issuance of
Shares by (a) directing the Company to withhold a portion of the Shares
otherwise distributable to the Key Person, or (b) by transferring to the Company
a certain number of Shares owned, such Shares being valued at the Fair Market
Value Price thereof on the taxable date.  Notwithstanding any
provisions of the Plan to the contrary, a Key Person’s election pursuant to the
preceding sentence (a) must be made on or prior to the taxable date with respect
to such issuance of Shares, and (b) must be irrevocable.  In lieu of a
separate election on each taxable date of an issuance of Shares, a Key Person
may make a blanket election with the Board that shall govern all future taxable
dates until revoked by the Key Person.

    

    3.           If
the holder of Shares purchased in connection with the exercise of an Incentive
Stock Option disposes of such Shares within two years of the date such Incentive
Stock Option was granted or within one year of such exercise, he, she, or it
shall notify the Company of such disposition and remit an amount necessary to
satisfy applicable withholding requirements including those arising under
federal income tax laws.  If such holder does not remit such amount,
the Company may withhold all or a portion of any salary or other compensation
then or in the future owed to such holder as necessary to satisfy such
requirements. Taxable date means the date a Key Person recognized income under
the Code or any applicable federal, state, or other  income tax law
with respect to an issuance of Shares.

    

    J.           1.           If
at any time any Shareholder desires to sell, encumber, or otherwise dispose of
Shares distributed to him, her, or it under this Plan other than if the Shares
have been registered with the Commission, the Shareholder shall first offer the
Shares to the Company by giving the Company written notice disclosing: (a) the
name of the proposed transferee of the Shares; (b) the certificate number and
number of Shares proposed to be transferred or encumbered; (c) the proposed
price; (d) all other terms of the proposed transfer; and (e) a written copy of
the proposed offer.  Within thirty (30) days after receipt of such
notice, the Company shall have the option to purchase all or part of such Shares
at the same price and on the same terms as contained in such
notice.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    2.           If
the Company (or a Shareholder, as described below) does not exercise the option
to purchase Shares, as provided in J.1 above, the person shall have the right to
sell, encumber, or otherwise dispose of his, her, or its Shares on the same
terms of transfer as set forth in the written notice to the Company, provided
such transfer is effective within thirty (30) days after the expiration of the
Company's option to purchase period.  If the transfer is not effected
within such period, the Company must again be given an option to purchase, as
provided above.

    

    3.           The
Board of Directors, in its sole discretion, may waive the Company’s right of
first refusal pursuant to this Section and the Company’s repurchase right
pursuant to Section K below.  If the Company’s right of first refusal
or repurchase right is so waived, the Board of Directors may, in its sole
discretion, pass through such right to the remaining Shareholders of the Company
in the same proportion that each Shareholders’ share ownership bears to the
Share ownership of all the Shareholders of the Company, as determined by the
Board of Directors. To the extent that a Shareholder has been given such right
and does not purchase his, her, or its allotment, the other Shareholders shall
have the right to purchase such allotment on the same basis.

    

    K.           1.           If
(i) the Key Person’s employment or service with the Company is terminated as a
result of the Key Person’s Wrongful Activities, or (ii) the Board determines in
good faith that the Key Person has materially breached any non-compete,
non-solicitation, or confidentiality agreement with the Company during or after
termination of his, her, or its services with the Company as an employee,
consultant, advisor, or member of the Board of Directors, then the Company shall
have the right to repurchase all Shares issued to the Key Person at a price
equal to the Fair Market Value Price on the effective date of the Stock Rights
and terminate all Options granted but not yet exercised and all Stock
Rights.   Any repurchase shall be made in accordance with
accounting rules to avoid adverse accounting treatment.  All
unexercised Options shall terminate.  The determination by the Board
that any such Wrongful Activity has occurred, whether proven or not, shall be
final, conclusive, and binding upon such Key Person.

    

    2.           The
Company’s right to repurchase shall be exercisable at any time within one year
after the date of Key Person’s termination of employment or performance of
services by the delivery of written notice by the Company to such effect to the
Key Person or his, her, or its Personal Representative; provided, that, in the
case of Shares purchased through the exercise of an Incentive Stock Option (i)
such date shall be extended to the date that is 30 days after a Key Person can
sell his or her Shares without causing the Incentive Stock Options to not
qualify as Incentive Stock Options and (ii) the Company shall not have the right
to repurchase the Shares if it would result in the Shares purchased through the
exercise of Incentive Stock Options as not qualifying as Incentive Stock
Options.  Within thirty (30) days after receipt of such notice, the
Key Person or his, her, or its Personal Representative shall deliver a
certificate or certificates for the Shares being sold, together with appropriate
duly signed stock powers transferring such Shares to the Company, and the
Company shall deliver to the Key Person, or his, her, or its Personal
Representative an amount equal to the purchase price for the Shares being
sold.

    

    3.           This
Article K shall not apply to any Key Person from and after the date of an
underwritten initial public offering of the Company’s Common
Stock.

    

    ARTICLE
XI

    

    EFFECT
OF TERMINATION OF EMPLOYMENT

    

    OR
SERVICE OR DEATH

    

    A.           If
the employment or engagement by a Key Person by the Company shall terminate as a
result of such Key Person’s retirement, total and permanent disability, or
death, such Stock Rights or Options may be exercised by such Key Person or such
Key Person’s Personal Representative or beneficiaries, to the extent that such
Key Person shall have been entitled to do so on the date of such
event.  Notwithstanding the foregoing, the Board may, in its sole
discretion, permit such Option or Stock Rights to be issued or to be exercised
to an extent greater than would otherwise be provided under this
paragraph.

    

    Options
may be exercised to the extent set forth above no later than the first to occur
of the following:

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    1.           the
expiration of three (3) months after termination of employment if such
termination is due to retirement, or total and permanent disability; provided if
such Key Person shall die during such three (3) month period, then one (1) year
after the date of death; or

    

    2.           the
expiration of one (1) year after termination of employment if such termination
is due to such Key Person’s death; or

    

    3.           the
expiration date of such Incentive Stock Option.

    

    B.           If
the employment or service of a Key Person shall terminate for any reason other
than retirement, total and permanent disability, death or Wrongful Activities of
the Key Person, any Incentive Stock Option held by the Key Person may be
exercised only within three (3) months after such termination unless by its
terms the Incentive Stock Option expired sooner and only to the extent that the
Key Person would have been entitled to do so on the date of such
termination.

     

    ARTICLE
XII

    

    MISCELLANEOUS
PROVISIONS

    

    A.           Notwithstanding
anything to the contrary in this Plan, in the event of any recapitalization,
stock dividend, stock split, reverse stock split, stock dividend, combination,
reclassification or exchange affecting the Shares subject to this Plan, or any
merger, consolidation, or reorganization as a result of which the Company is the
surviving corporation, the aggregate number of Shares subject to the Plan and
outstanding Options both as to number of Shares and the option price, and Stock
Rights may be appropriately adjusted as determined by the Board, whose
determination shall be final, binding, and conclusive.

    

    Notwithstanding
anything to the contrary in this Plan, in the event of dissolution or
liquidation of the Company, or in the event of reorganization, merger,
reorganization, or consolidation of the Company with one or more corporations in
which the Company is not the surviving corporation or the Company becomes a
wholly owned subsidiary of another corporation as a result of one of the events
described in this paragraph or a sale of the Company, the Plan shall terminate,
and any Option or Stock Rights then outstanding hereunder shall terminate on the
effective date of such transaction unless the surviving corporation, or if
applicable the corporation purchasing all of the Shares of the Company (or its
affiliates) agrees to assume such Option or obligation to issue Shares pursuant
to Stock Rights or elects to issue substitute options or rights in place
thereof; provided, however, that all outstanding Options or Stock Rights not
being assumed by the surviving or purchasing corporation shall become
exercisable in part or in full, at the election of the Key Person, during the
five (5) business days immediately preceding the effective date of such
transaction.

    

    B.           In
addition to such other rights of indemnification as they may have as members of
the Board of Directors, the Company shall indemnify to the full extent permitted
by law, each member of the Board (and his or her respective heirs, executors,
and administrators) made, or threatened to be made, a party to any action, suit
or proceeding (whether civil, criminal, administrative, or investigative) by
reason of any action taken or failure to act under, or in connection with, the
Plan or any Option or Stock Rights granted thereunder.

    

    C.           The
Board of Directors shall have the power, in its discretion, to amend, suspend,
or terminate the Plan in whole or in part at any time; provided no amendment or
termination shall in any manner affect an Option or Stock Right theretofore
granted without the consent of the Key Person.

    

    D.           Nothing
contained in this Plan, or in Option Agreements, Stock Rights Agreements or
Subscription Agreements or in any other documents related to this Plan or to
Options or Stock Rights shall confer upon any Key Person any right to continue
in the employ of, or be engaged by, the Company, as an employee or otherwise,
constitute any contract or agreement of employment, or engagement, or interfere
in any way with the right of the Company to reduce such person’s fees,
compensation, or benefits or to terminate the employment or engagement of such
Key Person, with or without cause, but nothing contained in this Plan or any
document related thereto shall affect any other contractual right of any Key
Person.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    E.           No
Key Person, Beneficiary, or other person shall have any right, title, or
interest in any fund or in any specific asset of the Company by reason of any
Option or Stock Rights granted hereunder.  Neither the provisions of
this Plan (or of any documents related hereto), nor the creation or adoption of
this Plan, nor any action taken pursuant to the provisions of this Plan shall
create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Key Person, Beneficiary, or other
person.  To the extent that a Key Person, Beneficiary, or other person
acquires a right to receive an Option or Stock Rights hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Company.

    

    F.           Any
notice required herein to be given by a Key Person to the Company shall be
deemed to have been given on delivery of such notice in writing to the Company
at such addresses the Company designates in writing to the Key Person at the
Date of Grant, or at such other address as the Company may thereafter designate
in writing to such Key Person.  Any notice required herein to be given
by the Company to any Key Person shall be deemed to have been given on mailing
of such notice in writing addressed to the last known address of such Key Person
as shown on the records of the Company.

    

    G.           The
provisions of the Plan shall be binding upon all Personal Representatives and
Beneficiaries of the Key Person.

    

    H.           This
Plan shall be construed, administered, and governed in all respects by the laws
of the State of New York without regard to conflicts of laws thereof and is a
plan maintained outside the United States primarily for the benefit of
non-resident aliens of the United States; and, therefore, the U.S. Employment
Retirement Income Security Act of 1974, as amended shall not
apply.

    
      
         

      

      
        9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]