Document:

Exhibit 10.1

                               LICENSE AGREEMENT

      THIS  LICENSE AGREEMENT ("Agreement") is made and entered into as of June
15, 2003 (the  "Effective  Date"),  by  and between, TRIPLE EIGHT TECHNOLOGIES,
INC.  (TET),  a  British  Virgin Islands corporation  ("LICENSOR"),  and  NUTRI
PHARMACEUTICALS RESEARCH, INC. (NPRI), a Nevada corporation ("LICENSEE").

                                   RECITALS

      WHEREAS, TET is the owner  of  certain  technologies in the form of trade
secrets  and proprietary technical documentation,  together  with  further  and
future extensions  of  the  "art"  of  the  subject  technologies including any
derivative rights related to certain processes for the  conversion  of  any oil
substance  from a viscous liquid to a dry or powder condition in a manner  that
preserves optimum active ingredients the ("Technology"); and

      WHEREAS,  LICENSEE  desires to obtain from LICENSOR the exclusive, United
States license in and to such technologies supra, and other rights to include a
non-exclusive international  right,  in  accordance  with  the  terms  of  this
Agreement,  to  develop  and  commercially  exploit  products,  byproducts  and
processes based thereon.

      NOW,  THEREFORE,  in consideration of the mutual covenants and agreements
contained herein, LICENSOR and LICENSEE hereby agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

      1.1   Definitions.   Terms  not  otherwise  defined herein shall have the
meanings set forth below.

      "Advertising   Co-op",  means  a  co-operative  Licensee   "peer"   group
coordinating and optimizing  advertising  expenditures  and  programs  for  the
Technology.

      "Affiliate,"  or any variation thereof means, when used with reference to
a specified Person, any  Person  directly or indirectly controlling, controlled
by or under common control with the  specified  Person.   For  purposes of this
Agreement,  the direct or indirect ownership of 15% or more of the  outstanding
voting securities  of  a  Person,  or  the  right to receive 15% or more of the
profits or earnings of a Person, or the right  to  control the policy decisions
of a Person, shall be deemed to constitute control.

      "Bankruptcy"  is  defined  as  the  filing of a petition  for  relief  or
protection in a US Federal Bankruptcy Court.

      "Field" means all fields and methods of use, application or practice.

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      "Force Majeure Event" means an event  beyond  the reasonable control of a
party,  including,  without  limitation,  acts of God; acts  of  war,  acts  of
terrorism or public enemies; civil commotions; embargoes; epidemics; quarantine
restrictions; floods; fires; earthquakes, unusually  severe weather conditions,
strikes, labor disputes, accidents, mechanical breakdowns, governmental actions
or condemnations, or the inability to obtain necessary governmental approvals.

      "Gross Revenues" means amounts received on account  of  Licensed Products
sold  or  otherwise  distributed by LICENSEE or Licensed Processes  contracted,
after allowing deductions  for  the following items: (i) sales taxes, use taxes
and  other  similar  governmental  charges,  (ii)  freight  and  transportation
charges,  (iii)  custom  duties,  (iv)  insurance   charges,  (v)  rebates  and
retroactive price reductions and (vi) commissions actually paid to distributors
and  sales  representatives.   In  the  event  a Licensed Product  is  sold  or
otherwise distributed for consideration other than  solely  cash, or a Licensed
Process is contracted for consideration other than solely cash,  the cash value
equivalent  of  such  other  consideration  attributable  to the sale or  other
distribution  of  the  Licensed  Product or of the Licensed Process,  shall  be
included in Gross Revenues.  Gross  Revenues  shall  be  deemed  received  when
actually  collected.   With  respect  to any Combination Product or Combination
Process, Gross Revenues shall be limited to amounts received on account of that
portion of the product or process that  is covered by or manufactured using the
Technology.

      "Improvements" means any and all new  or  useful processes, manufacturing
methods, compositions of matter or methods of use  that  are  first  conceived,
reduced  to practice or developed after the Effective Date, derivative  of  the
above Identified  "Technology",  extended  internationally by custom, courtesy,
and treaty.
      "Insolvency" is defined (in "Black's Law Dictionary") as the inability to
pay debts and bills as they become due in the ordinary course of business.
      "Intellectual  Property  Entitlements" means  the  underlying  reasonable
compensation  for  the  LICENSOR's   Intellectual   Property  inherent  to  the
Technology as set forth in herein.
      "Licensed Marks" means the trademarks, trade names, service marks, logos,
designs and/or symbols set forth on Exhibit A (as may  be  expanded  or amended
from  time  to  time)  hereto,  together  with  any variations and translations
thereof, extended internationally by custom, courtesy, and treaty.
      "Licensed  Product"  means  any  product  that  (i)  is  covered  by  the
"Technology";  (ii)  is  manufactured  using a Licensed Process;  or  (iii)  is
manufactured using a material portion of  the  Technical  Information, extended
internationally by custom, courtesy, and treaty.
      "Licensed  Process"  means  any  process  that  (i)  is  covered  by  the
"Technology"; or (ii) the practice of which involves use of a material  portion
of the Technical Information, extended internationally by custom, courtesy, and
treaty.
      "Master License" means the exclusive right to represent and implement the
Technology  within the territory and a limited non-exclusive right to represent
and implement the Technology in Open Territories.
      "Oil" is  identified  as  any  of  various  vegetable, mineral, or animal
substances that tend to reduce the friction of surfaces  rubbing  against  each
other,   are   inflammable,   used   for  heat,  lubrication,  medicines,  food
ingredients, etc.

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      "Open  Territory"  means  the  non-exclusive   right  to  present  and/or
implement the Technology outside of the United States in the absence of a local
Master Licensee.
      "Powder"  a  substance  comprised of fine, dry, particles  or  the  state
thereof.
      "Processed Material Charge"  (PMC)  the "End Product" and /or Process Fee
per kilo of finished product pertinent to the then current subject oil.
      "Technology   Rights"   means   the  Identified   Proprietary   Technical
Information and Trade Secrets supra and  any  applications  directly derivative
therefrom,  covering  inventions,  developments and processes first  conceived,
reduced to practice or developed by the LICENSOR, that relate to the conversion
of  oil  and  other  similar  materials  to   powder   and  any  continuations,
continuations-in-part,     additions,    divisions,    renewals,    extensions,
reexaminations and reissues  of  any of the foregoing, extended internationally
by custom, courtesy, and treaty.
      "Person" means any corporation,  trust, partnership, joint venture, other
entity or natural person.
      "Technical Information" means all  technical information, data, know-how,
methods,  processes,  specifications, plans,  drawings,  blueprints,  formulae,
trade secrets and other  similar  items  related  to the Identified Technology,
supra, that are owned, controlled, or possessed by  LICENSOR  on  or before the
Effective  Date  and further and future extensions of the "art" of the  subject
technologies after  the Effective Date that relate to the conversion of oil and
other similar materials to powder.
      "Technology" means  the  Trade Secrets, the Technical Information, or any
subset thereof and the Licensed  Marks,  extended  internationally  by  custom,
courtesy, and treaty.
      "Territory"  -- Worldwide Exclusive

                                   ARTICLE 2

            GRANT OF LICENSE AND TRANSFER OF TECHNICAL INFORMATION

      2.1   License.    LICENSOR   hereby  grants  to  LICENSEE  an  exclusive,
perpetual, entitlement-bearing right  and  license  (i)  to  practice under the
Technology Rights supra, and to use, improve, enhance, modify,  copy,  publish,
disclose,  disseminate  and  create  derivative  works  based  on the Technical
Information, for purposes of developing, making, having made, using, marketing,
selling  and otherwise commercially exploiting Licensed Products  and  Licensed
Processes  in  the Field; and (ii) to use and display the Licensed Marks on and
in connection with  marketing,  selling  and  otherwise  distributing  Licensed
Products and Licensed Processes in the Field.

      2.2   Quality  Control;  Trademark  Usage.   All  uses by LICENSEE of the
Licensed  Marks  on  and  in  connection  with  the  marketing, sale  or  other
distribution  of  Licensed  Products  and  Licensed  Processes   (i)  shall  be
obligatory,  and  (ii)  shall  be  designed  to  enhance the value and goodwill
inherent in such marks, and (iii) shall be in accordance  with  all  applicable
laws, rules and regulations.

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      2.3   Quality Control; Authorized Equipment.  LICENSEE shall be  required
to insure specification and use of LICENSOR engineered and authorized equipment
in all Technology implementations.   LICENSEE may take "markups" on such as per
industry custom.

      2.4   Quality Control; Authorized Procedures.  LICENSEE shall be required
to   insure  specification  and  use  of  LICENSOR  engineered  and  authorized
procedures in all Technology implementations.   LICENSEE may charge for such as
per industry custom.

      2.5   Government   Approvals.    LICENSEE  and  its  customers  shall  be
responsible  for paying all costs and expenses  incurred  by  any  of  them  in
obtaining  or  maintaining   all   approvals,   licenses,   registrations   and
authorizations  of  any  U.S.  or  non-U.S. national, state or local regulatory
agency,  department, bureau or other  government  entity,  including,  but  not
limited to the FDA, USDA, and EPA, necessary for the manufacture, use, storage,
transportation or sale of any Licensed Products or Licensed Processes.

      2.6   Compliance  with  Laws.   LICENSEE  shall endeavor to comply in all
material respects with all applicable laws, rules and regulations pertaining to
the  use  of  the  Technology and the development, marketing,  advertising  and
distribution of Licensed Products and Licensed Processes.

                                   ARTICLE 3

                                    FINANCES

      3.1   Master License.   In  consideration  of  the License Rights granted
under Article 2 supra, LICENSEE shall remit herewith a one-time cash fee in the
amount  of  four  hundred  thousand dollars ($400,000 USD),  thereafter  paying
Intellectual Entitlements as  specified  in  Item  "3.2.A"  below,  or,  at the
Licensee's option, forgoing the one-time cash fee in the amount of four hundred
thousand  dollars  ($400,000  USD)  and  paying  Intellectual  Entitlements  as
specified  in  Item  "3.2.B",  below.   Further,  if the Licensee has initially
elected to forgo Payment of the four hundred thousand dollar ($400,000 USD) one
time cash fee, they may, solely at their option, elect  at  any time to pay the
fee and revert to the lower Intellectual Entitlements rate delineated  in  Item
"3.2.A" below

      3.2   Intellectual  Entitlements.  In consideration of the license rights
granted under Article 2 supra,  LICENSEE  shall  pay  Intellectual Entitlements
(License Fees), to LICENSOR as follows:

      A.  Having paid the $400,000 of Item "3.1" supra, an amount equal to four
                percent (4.00%) of the Gross Revenues received  by  LICENSEE or
                any of its Affiliates on account of Licensed Products  Licensed
                Processes sold or otherwise distributed by LICENSEE; or,
      B.  Having elected to not pay the $400,000 of Item "3.1" supra, an amount
                equal  to  8 percent (8.00%) of the Gross Revenues received  by
                LICENSEE or  any  of  its  Affiliates  on  account  of Licensed
                Products  Licensed  Processes sold or otherwise distributed  by
                LICENSEE.
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      A.1   In the case of a Licensed  Product,  such Intellectual Entitlements
shall remain payable for so long as the Licensed Product  is covered by a Valid
Claim  of  the Identified Technology in the country in which  such  product  is
made, used,  sold  or otherwise distributed, or is manufactured using a process
that is covered by a Valid Claim of the Identified Technology in the country in
which such process is  utilized.   In  the  case  of  a  Licensed Process, such
Intellectual  Entitlements  shall remain payable for so long  as  the  Licensed
Process is covered by a Valid Claim of the Identified Technology in the country
in which such process is utilized.

      A.2   Advertising Co-op Contributions.  In addition to the considerations
supra, of the license rights  granted  under  Article  2  supra, LICENSEE shall
convey to LICENSOR Advertising Co-op Contributions in cash equal to one and one
half percent (1.50%) of the Gross Revenues received by LICENSEE  or  any of its
Affiliates on account of Licensed Products Licensed Processes sold or otherwise
distributed  by  LICENSEE.   In  the  case  of  a  Licensed Product, such Co-op
Contributions  shall  remain  payable for so long as the  Licensed  Product  is
covered by a Valid Claim of the  Identified  Technology in the country in which
such product is made, used, sold or otherwise  distributed,  or is manufactured
using  a process that is covered by a Valid Claim of the Identified  Technology
in the country  in  which  such process is utilized.  In the case of a Licensed
Process, such Co-op Contributions  shall  remain  payable  for  so  long as the
Licensed  Process  is covered by a Valid Claim of the Identified Technology  in
the country in which  such process is utilized.  Such Co-op Contributions shall
be  amalgamated  with  like   contributions   from  other  peer  LICENSEEs  for
advertising  and marketing and will be administered  and  disseminated  by  the
LICENSOR.

      A.3   Payment  of  Entitlements.   Entitlements  and  payable  under this
Article 3 shall be due to LICENSOR for each calendar quarter beginning with the
first  calendar  quarter  in  which  any  Licensed Product is sold or otherwise
distributed,  or in which any Licensed Process  is  contracted,  and  shall  be
payable to LICENSOR  within  thirty  (30)  days  following  the last day of the
applicable calendar quarter.

      A.4   Payment  of  Advertising  Co-op Contributions.  Any  and  all  such
contributions payable under this Article  3  shall  be due to LICENSOR for each
calendar month in which any Licensed Product is sold  or otherwise distributed,
or in which any Licensed Process is contracted, and shall  be  payable  to  the
care  of  the  LICENSOR  within  thirty (30) days following the last day of the
applicable month.

      A.5   Reports.  LICENSEE shall  deliver  to  LICENSOR, within thirty (30)
days after the end of each calendar month, a report setting forth in reasonable
detail LICENSEE's calculation of the royalties payable  to  LICENSOR  for  such
calendar  period,  supported  by  LICENSEE's calculation of Gross Revenues on a
category-by-category basis.

      A.6   Method of Payment; Currency.   All remuneration payable to LICENSOR
under this Agreement shall be paid by wire transfer  in  immediately  available
funds in legal currency of the United States and shall be delivered to LICENSOR
at the account designated in writing by LICENSOR from time to time.

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      A.7   Tax Withholding.  If laws, rules or regulations require withholding
of income taxes or other taxes imposed upon payments set forth in this  Article
3, LICENSEE shall make such withholding payments as required and subtract  such
withholding  payments  from the payments set forth in this Article 3.  LICENSEE
shall submit reasonable  proof  of payment of the withholding taxes to LICENSOR
within a reasonable period of time.   The  parties agree to cooperate with each
other, including, without limitation, in the filing of appropriate certificates
of tax exemption, (i) to ensure that any withholding  payments  required  to be
made  by  LICENSEE are reduced to the fullest extent permitted by law, and (ii)
to seek credit  for  withholding  payments previously made by LICENSEE.  In the
event LICENSEE is subsequently credited for withholding payments that have been
subtracted from payments required to  be made to LICENSOR under this Article 3,
the amount of each such credit shall be  immediately  due and owing by LICENSEE
to LICENSOR.

      A.8   Late Payment.  Any remuneration not paid on or before the date when
due shall accrue interest thereon from such date until  the  date of payment in
full at two (2) percentage points over the per annum interest rate published as
the "Prime Rate" in The Wall Street Journal (Eastern Edition),  but in no event
shall such rate exceed the maximum rate permitted by applicable law.   Payments
hereunder  shall  be  deemed paid as of the day on which they are released  and
"liquid" in the then current designated account.

      A.9   Records.  LICENSEE  agrees  to maintain for two (2) years after the
submission of each report under Section 3.6,  books  and  records in sufficient
detail  to  enable  the remuneration payable hereunder to be verified,  and  to
require each Affiliate of LICENSEE to do the same.

      A.10  Audit Rights.   Upon  reasonable prior notice to LICENSEE, LICENSOR
and its certified public accountants shall have access to the books and records
of LICENSEE and its Affiliates to conduct a review or audit thereof in order to
verify the payment of all required  remuneration  hereunder.  Such access shall
be available not more than once during any calendar  year  and  shall  only  be
available during normal business hours for the term of this Agreement and for a
period  of  two  (2)  years  after  its  termination.  LICENSOR shall treat all
financial  information  subject  to review hereunder  in  accordance  with  the
confidentiality provisions of this  Agreement,  and  shall  cause its certified
public  accountants  to  enter into a confidentiality agreement  with  LICENSEE
obligating  such accountants  to  retain  all  such  financial  information  in
confidence pursuant to such confidentiality agreement.

      A.11  Insolvency.   A condition of insolvency on the part of the LICENSEE
that is not corrected within  45 days of a notice to cure will cause all rights
herein granted to be rescinded  by the LICENSOR with no recourse.   Upon filing
of  bankruptcy on the part of the  LICENSEE,  all  rights  herein  granted  are
immediately rescinded by the LICENSOR with no recourse.

                                     6

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                                   ARTICLE 2

        TECHNOLOGY PROSECUTION AND MAINTENANCE; TRADEMARK REGISTRATIONS

      2.1   Obligations  of  Licensor.   LICENSOR  shall be responsible for the
prosecution and maintenance of the Technology Rights;  the  filing, prosecution
and  maintenance  of all trademark registrations and registration  applications
for the Licensed Marks;  and  all  associated  fees,  costs and other expenses,
including the costs of any interference, opposition, reexamination  or  reissue
applications  or counterparts or proceedings.  LICENSOR shall (i) keep LICENSEE
fully informed  of  all  activity concerning the prosecution and maintenance of
the Technology Rights and  the  filing,  prosecution  and  maintenance  of  all
trademark  registration  and  registration applications for the Licensed Marks;
(ii) consult with LICENSEE on material  aspects  of  matters  relating  to such
activities;  (iii)  promptly provide LICENSEE with copies of all correspondence
to and from the U.S.  Patent  and Trademark Office (or any foreign counterparts
thereof) concerning the Technology  Rights  or the Licensed Marks; (iv) provide
LICENSEE with advance copies of all correspondence  or  other  materials  to be
submitted  to the U.S. Patent and Trademark Office (or any foreign counterparts
thereof) concerning  the  Technology  Rights  or  the Licensed Marks and obtain
LICENSEE's approval of such items before so submitting  them;  and  (v) provide
LICENSEE with reasonable advance notice of and an opportunity to participate in
all hearings and other proceedings before the U.S. Patent and Trademark  Office
(or any foreign counterparts thereof) concerning the Technology Rights and  the
Licensed Marks.

      2.2   Obligations   of  Licensee.   LICENSEE  shall  assist  LICENSOR  in
prosecuting  and  maintaining   the   Licensed   Technologies  and  in  filing,
prosecuting  and  maintaining  all  trademark  registrations  and  registration
applications for the Licensed Marks as reasonably requested by LICENSOR.

      2.3   Additional Actions by Licensee.  If  LICENSOR fails to prosecute or
maintain any of the Technology Rights in any country,  or to file, prosecute or
maintain any registration or registration application for  a  Licensed  Mark in
any  country,  LICENSEE  shall  have  the  right,  but  not  the obligation, to
prosecute  or  maintain  such Technology Rights in such country,  or  to  file,
prosecute or maintain such  registration  or  registration  application in such
country,  in  each  case  on behalf of and in the name of LICENSOR.    In  such
event, LICENSOR shall execute  and deliver to LICENSEE all such instruments and
other documents and shall take such  other  actions  as  may  be  necessary  or
reasonably  requested  by  LICENSEE  in  connection  therewith.   All costs and
expenses  (including, without limitation, reasonable attorneys' fees)  incurred
by LICENSEE  in  connection  with  exercising its rights under this Section 4.3
shall  be  creditable  in  full  against  the  royalties  payable  to  LICENSOR
hereunder.

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                                   ARTICLE 3

                                 IMPROVEMENTS

      3.1   Ownership and Assignment.  As between the parties, all Improvements
upon the Identified Technology that  are  used  or useful in the Field shall be
owned  solely by LICENSOR.  The LICENSOR hereby retains  any  and  all  rights,
title and interest in and to such Improvements.

      3.2   Patents  on Improvements.  LICENSOR shall be solely responsible for
preparing,  filing,  prosecuting   and   maintaining  all  patents  and  patent
applications claiming or covering any Improvements  as  LICENSOR  sees fit, and
shall bear all associated fees, costs and other expenses.

      3.3   Disclosure  of  Improvements.  LICENSOR shall promptly disclose  to
LICENSEE all Improvements conceived, reduced to practice or developed by either
of them, in whole or in part.  Such disclosures shall be in writing.

                                   ARTICLE 4

                                 INFRINGEMENTS

      4.1   Notice of Infringements.   Each  party  shall promptly give written
notice  to  the  other  parties  of  any infringement or unauthorized  use,  or
suspected infringement or unauthorized  use,  of any of the Technology or other
Intellectual Properties supra, by a third party (each, an "Infringement").

      4.2   Actions by Licensee.  LICENSEE shall  have  the  right, but not the
obligation,  to  secure  cessation  of  each  Infringement by instituting  suit
against the Person engaged in the Infringement  (the "Infringer") in LICENSEE's
own name (or, if required by law, in its, LICENSOR's),  and/or by entering into
a settlement or license agreement with the Infringer.  Recoveries  obtained  by
LICENSEE  in  any  such  action shall be retained solely by LICENSEE; provided,
however, that amounts recovered  by  LICENSEE  as compensation for lost profits
shall be treated as Gross Revenues for purposes of Article 3.  Each such action
shall be at LICENSEE's own expense; provided, however,  that  LICENSEE shall be
entitled to reduce any royalties payable to LICENSOR hereunder  by  up to fifty
percent  (50%)  of  its out-of-pocket expenses, including reasonable attorneys'
fees, incurred in prosecuting and/or settling any suit against an Infringer.

      4.3   Actions by  Licensor.   If,  within  six  months  of learning of an
Infringement,  LICENSEE  has  not  (i)  entered  into any settlement  with  the
Infringer; (ii) otherwise caused the Infringer to cease the Infringement, (iii)
instituted a suit against the Infringer to bring an  end  to  the Infringement,
then  LICENSOR  shall  have  the  right,  but  not  the  obligation,  to   take
responsibility  for ending the Infringement.  In such event, LICENSOR shall not
impose any obligations  or restrictions on LICENSEE, or grant any rights to the
Technology that are inconsistent  with  LICENSEE's  license  rights  hereunder,
without LICENSEE's prior written consent.

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<PAGE>

      4.4   Declaratory  Judgment  Actions.   In  the  event  that either party
learns  of  plans  for or the institution of a declaratory judgment  action  or
response alleging invalidity  of any of the Technology Rights, that party shall
provide the other parties with  prompt  written notice thereof.  LICENSEE shall
have the sole right, but not the obligation, to defend or settle such action or
response; provided, however, that LICENSOR  may  participate  in the defense or
settlement  thereof with counsel of its own choosing at its own  expense.   All
costs and expenses  (including, without limitation, reasonable attorneys' fees)
incurred by LICENSEE  in  connection with defending or settling any declaratory
judgment action or response  under this Section 6.4 shall be creditable in full
against the royalties payable  to  LICENSOR  hereunder.   In the event LICENSEE
notifies  LICENSOR  that  LICENSEE  does  not intend to defend such  action  or
response, or should LICENSEE at any time cease to diligently defend such action
or response, LICENSOR shall have the right,  but  not  the  obligation, to take
over  the sole defense of the action or response at its own expense;  provided,
however,  that  the counsel retained by LICENSOR to defend or settle the action
or response shall  be  subject  to  LICENSEE's  prior  written  approval,  such
approval not to be unreasonably withheld.

      4.5   Assistance.   In  any suit as either party may institute against an
Infringer, or to enforce or defend  the  Technology  Rights  pursuant  to  this
Agreement,  the  other  parties  hereto  shall  cooperate  as  requested in all
reasonable  respects  and,  to  the  extent  necessary,  testify or have  their
employees  testify  when  requested  and  make available all relevant  records,
papers, information, samples, specimens, and the like.

                                   ARTICLE 5

                             TERM AND TERMINATION

      5.1   Term.  The term of this Agreement  shall  commence on the Effective
Date and continue until terminated pursuant to the provisions  of  this Article
7.

      5.2   Termination  by  LICENSOR.   LICENSOR  shall  have  the  right   to
terminate  this  Agreement  upon  thirty  (30)  days'  prior  written notice to
LICENSEE if LICENSEE fails to pay any amount finally determined  by  a court of
competent  jurisdiction  to be due and owing to LICENSOR hereunder within  such
thirty (30) day period, or  upon insolvency or bankruptcy as per paragraph 3.12
supra.
      5.3   Termination  by  LICENSEE.    LICENSEE  shall  have  the  right  to
terminate this Agreement upon thirty (30) days prior written notice to LICENSOR
(i) if LICENSEE determines, in its reasonable judgment based on tests and after
consultation with LICENSOR, that the Technology  has  little  or no efficacy in
the Field or is not commercially viable, or (ii) in the event LICENSOR breaches
or  fails to perform any covenant, requirement, representation or  warranty  of
this  Agreement and does not cure the breach or failure within such thirty (30)
day period.

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<PAGE>

      5.4   No  Other  Events  of  Termination.  This Agreement shall remain in
effect unless and until terminated by  either LICENSOR or LICENSEE as permitted
under this Article 7, or by LICENSEE under  Section  12.2  in connection with a
Force Majeure Event.

      5.5   Survival.  Termination of this Agreement shall not relieve LICENSEE
of its obligation to pay any royalties that become due and payable  to LICENSOR
prior to the effective date of such termination.  Except as otherwise  provided
under  this  Article  7, upon termination of this Agreement, LICENSEE's license
rights shall cease and  all  rights  to  the  Technology and the Licensed Marks
shall revert unto LICENSOR.  In addition, Articles 8, 9, 10, 11 and 12, and any
other provisions required to interpret this Agreement shall survive termination
of this Agreement.

                                   ARTICLE 6

                                CONFIDENTIALITY

      6.1   Obligation of Confidentiality and Non-Use.  LICENSOR shall maintain
in confidence, and shall cause their employees,  agents  and representatives to
maintain in confidence, all Technical Information and any  information, data or
materials    pertaining    to    Improvements    (collectively,   "Confidential
Information").   In  addition,  LICENSOR  shall  use,  and  shall  cause  their
employees, agents and representatives to use, all Confidential Information only
for purposes of performing their obligations under this Agreement.

      6.2   Exceptions.    The   provisions  of  Section  8.1  respecting   the
maintenance of Confidential Information  in  confidence  shall not apply to any
information, data or materials that (i) become known to the  public  through no
act  or  omission  of  LICENSOR  or  any  other  Person  with  an obligation of
confidentiality to LICENSEE; or (ii) are required to be disclosed  pursuant  to
applicable  laws,  rules, regulations, government requirements or court orders,
provided,  however, that  LICENSOR  shall  advise  LICENSEE  of  such  required
disclosure promptly  upon  learning  thereof  in  order  to  afford  LICENSEE a
reasonable  opportunity  to contest, limit and/or assist them in crafting  such
disclosure.

      6.3   Obligation  to  Inform.   Upon  learning  thereof,  LICENSOR  shall
provide LICENSEE with prompt  written  notice of the unauthorized disclosure or
use of any Confidential Information.

      6.4   Injunctive Relief.  LICENSEE  hereby  acknowledges  that damages at
law  would  be an inadequate remedy for a breach of any of the obligations  and
restrictions  set  forth  in  this Article 8.  Accordingly LICENSEE agrees that
LICENSOR shall be entitled to seek  injunctive  relief with respect to any such
breach or threatened breach without the posting of  any bond or other security.
The  rights set forth in this Section 8.4 shall be in  addition  to  any  other
rights  or remedies that LICENSOR may have available to it hereunder, at law or
in equity.

                                     10

<PAGE>

                                   ARTICLE 7

                        REPRESENTATIONS AND WARRANTIES

      7.1   Representations  and  Warranties  of LICENSOR.  LICENSOR represents
and warrants to LICENSEE as follows:

            (a)LICENSOR is a corporation duly organized,  validly  existing and
in good standing under the laws of the British Virgin Islands.

            (b)The execution and delivery of this Agreement have been  duly and
validly  authorized,  and  all  necessary  action  has  been taken to make this
Agreement  a  legal,  valid and binding obligation of LICENSOR  enforceable  in
accordance with its terms.

            (c)The execution and delivery of this Agreement and the performance
by LICENSOR of its obligations  hereunder  will not contravene or result in any
breach of the Certificate of Incorporation or  Bylaws  of LICENSOR or result in
any  material  breach or violation of or material default  under  any  material
agreement, indenture,  license,  instrument or understanding or, to the best of
its knowledge, result in any violation  of  any law, rule, regulation, statute,
order or decree to which LICENSOR or any of its  Affiliates  is  a  party or by
which any of them or any of their property is subject.

            (d)LICENSOR   has  the  full  and  unencumbered  right,  power  and
authority to enter into this  Agreement, to grant the license rights granted by
LICENSOR to LICENSEE hereunder,  and  otherwise  to  carry  out its obligations
hereunder.

            (e)LICENSOR  is  the  exclusive  owner  of  all rights,  title  and
interest in and to the Technology.

            (f)LICENSOR  has  not  received  notice  of any claim  and  is  not
otherwise  aware  that  any of the Technology, or use thereof  by  LICENSEE  as
contemplated hereunder, infringes  or  misappropriates,  or  would  infringe or
misappropriate,   upon   the  Technology,  trademark,  trade  secret  or  other
intellectual property rights of any third party.

            (g)LICENSOR has  not  licensed  or  granted to any third party, and
will not license or grant to any third party during the term of this Agreement,
any  rights  in  or to the Technology that are inconsistent  with  the  license
rights granted by LICENSOR to LICENSEE hereunder.

            (h)To the best of LICENSOR's knowledge, no government, governmental
agency or subdivision  thereof  has any claim of right to or interest in any of
the Technology.

            (i)There is no action  or  proceeding  pending  or,  in  so  far as
LICENSOR  knows,  threatened  against LICENSOR before any court, administrative
agency or other tribunal that could  impact  upon  LICENSOR's  right, power and
authority to enter into this Agreement, to grant the license rights  granted by
LICENSOR  to  LICENSEE  hereunder,  or  to  otherwise carry out its obligations
hereunder.
                                     11

<PAGE>

            (j)LICENSOR  is  unaware  of  any  invalidity   of  the  Identified
Technology  and  will  immediately  notify  LICENSEE  upon  learning   of   any
information to the contrary.

            (k)To  the  best  of LICENSOR's knowledge, there does not exist any
patent of a third party, which is dominant to the Technology Rights.

            (l)All employees and  contractors  of LICENSOR are bound by written
agreements providing for the assignment to LICENSOR  of  all  Improvements that
they may conceive, reduce to practice or develop, on their own  or jointly with
others, in connection with performing any work for LICENSOR.

            (m)  LICENSOR is not aware of any Person who has superior rights to
use the Licensed Marks.  No claims are pending or, in so far as LICENSOR knows,
have  been  threatened against LICENSOR in connection with use of the  Licensed
Marks.

      7.2   Representations  and  Warranties  of LICENSEE.  LICENSEE represents
and warrants to LICENSOR as follows:

            (a)LICENSEE  is a corporation duly incorporated,  validly  existing
and in good standing under the laws of the State of Nevada.

            (b)The execution  and delivery of this Agreement have been duly and
validly authorized, and all necessary  action  has  been  taken  to  make  this
Agreement  a  legal,  valid  and  binding obligation of LICENSEE enforceable in
accordance with its terms.

            (c)The execution and delivery of this Agreement and the performance
by LICENSEE of its obligations hereunder  will not contravene, or result in any
breach of, the Certificate of Incorporation or Bylaws of LICENSEE, or result in
any  material breach or violation of or material  default  under  any  material
agreement,  indenture,  license, instrument or understanding or, to the best of
its knowledge, result in  any  violation of any law, rule, regulation, statute,
order or decree to which LICENSEE  or  any  of  its Affiliates is a party or by
which any of them or any of their property is subject.

            (d)LICENSEE  has  the  full  and  unencumbered   right,  power  and
authority  to  enter  into  this  Agreement  and  otherwise  to carry  out  its
obligations hereunder.

                                   ARTICLE 8

                   DISCLAIMERS AND LIMITATIONS OF LIABILITY

      8.1   No Additional Warranties.  EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE
9,  LICENSOR MAKES ANY EXPRESS OR IMPLIED WARRANTIES, STATUTORY  OR  OTHERWISE,
CONCERNING  THE  TECHNOLOGY.  SPECIFICALLY, BUT WITHOUT LIMITING THE FOREGOING,
LICENSOR  MAKE NO IMPLIED  WARRANTIES  OF  MERCHANTABILITY  OR  FITNESS  FOR  A
PARTICULAR  PURPOSE OR OTHERWISE WITH RESPECT TO THE TECHNOLOGY OR ANY LICENSED
PRODUCTS OR LICENSED PROCESSES.

                                     12

<PAGE>

      8.2   Limitation   on   Damages.    EXCEPT   FOR   ANY  BREACHES  OF  THE
REPRESENTATIONS AND WARRANTIES OF A PARTY UNDER ARTICLE 9, OR ANY VIOLATIONS OF
THE  OBLIGATIONS  OF CONFIDENTIALITY AND RESTRICTED USE UNDER  ARTICLE  8,  AND
SUBJECT TO THE INDEMNIFICATION  OBLIGATIONS OF THE PARTIES UNDER ARTICLE 11, IN
NO EVENT SHALL ANY PARTY BE LIABLE  TO  ANY  OTHER PARTY FOR ANY CONSEQUENTIAL,
INCIDENTAL,  INDIRECT,  SPECIAL,  PUNITIVE  OR  EXEMPLARY  DAMAGES  (INCLUDING,
WITHOUT LIMITATION, LOST PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY
SUCH  OTHER  PARTY  IN  CONNECTION  WITH  A BREACH OR ALLEGED  BREACH  OF  THIS
AGREEMENT,  EVEN IF SUCH PARTY HAS BEEN ADVISED  OF  THE  POSSIBILITY  OF  SUCH
DAMAGES.

      8.3   Acknowledgment.  Each party hereby acknowledges and agrees that the
foregoing disclaimer  and  limitation  of  liability  represent  bargained  for
allocations  of  risk,  and  that  the  economies, terms and conditions of this
agreement reflect such allocations.

                                   ARTICLE 9

                                   INDEMNITY

      9.1   Mutual Indemnity.  Subject to  the provisions of Section 11.2, each
party agrees to defend the other parties, their Affiliates and their respective
officers, directors, employees, agents and representatives from and against any
and all third-party claims, suits, actions and  demands,  and  to indemnify and
hold  harmless  such  persons from and against any and all damages,  penalties,
judgments, assessments,  settlement  amounts,  costs  and  expenses  (including
reasonable attorneys' fees) paid or payable to third parties in connection with
such  claims,  suits  actions  and  demands,  to  the  extent arising out of or
relating to (i) such party's breach of any representation,  warranty,  covenant
or  agreement  of  such  party  contained  in  this  Agreement;  or  (ii) gross
negligence or willful misconduct on the part of such party.

      9.2   Conditions to Indemnification.  The obligations of the indemnifying
party  under Section 11.1 are conditioned upon the prompt notification  to  the
indemnifying  party  of  the  suit,  claim,  action or demand in question.  The
indemnifying party shall have the right to assume  the defense of any the suit,
claim, action or demand in question unless, in the reasonable  judgment  of the
indemnified  party,  such  suit,  claim,  demand or action involves an issue or
matter which could have a materially adverse effect on the business, operations
or assets of the indemnified party, in which  event  the  indemnified party may
control the defense or settlement thereof.  If the indemnifying  party  defends
the suit, claim, demand or action, the indemnified party may participate in the
defense   thereof   at   its   sole  cost  and  expense.   This  provision  for
indemnification shall be void and  there  shall  be  no  liability  against the
indemnifying  party  as  to  any  suit,  claim,  demand  or  action  settled or
compromised  by  the  indemnified  party  without  the  prior  consent  of  the
indemnifying party.

                                     13

<PAGE>

                                  ARTICLE 10

                                 MISCELLANEOUS

      10.1  Entire  Agreement.   This  Agreement,  together  with  the Exhibits
annexed  hereto,  sets  forth and constitutes the entire agreement between  the
parties hereto with respect  to  the  subject matter hereof, and supersedes any
and all prior agreements, understandings, promises, and representations made by
either party to the other concerning the  subject  matter  hereof and the terms
applicable hereto.  This Agreement may not be released, discharged,  amended or
modified  in  any manner except by an instrument in writing signed by the  duly
authorized representatives of LICENSEE and LICENSOR.

      10.2  Force Majeure.  None of the parties shall be liable for any default
or delay in performance of such party's obligations hereunder to the extent the
same is attributable to any Force Majeure Event, provided that such party shall
use commercially reasonable efforts to overcome the Force Majeure Event as soon
as is reasonably  possible  and  all obligations of the parties shall return to
being in full force and effect upon  the  termination  of  such  Force  Majeure
Event.   Should  any  Force  Majeure  Event having a material adverse effect on
LICENSEE's ability to fully exploit the  license  rights  granted  to  LICENSEE
hereunder  last  or  be  reasonably expected to last for a period of sixty (60)
days or longer, LICENSEE shall  have  the  right  to  terminate this Agreement,
effective immediately, on written notice to LICENSOR.   Any such termination by
LICENSEE shall be without liability to LICENSOR on account thereof.

      10.3  Parties Independent.  In making and performing  this Agreement, the
parties  are acting at all times as independent entities and nothing  contained
in  this  Agreement  shall  be  construed  or  implied  to  create  an  agency,
partnership  or  employer and employee relationship between any of the parties.
Except as specifically  provided  herein,  at  no  time  shall  any  party make
commitments  or  incur any charges or expenses for or in the name of any  other
party.

      10.4  Assignment; Successors and Assigns.   LICENSEE shall NOT be free to
assign or transfer  this  Agreement,  or any of its rights hereunder, to any of
its Affiliates, except to any entity acquiring  all or substantially all of the
assets  of  LICENSEE  to  which  this  Agreement relates,  whether  by  merger,
acquisition  or  otherwise.   Subject  to  the   foregoing  restrictions,  this
Agreement, and each and every provision hereof, shall be binding upon and shall
inure  to the benefit of the parties, their respective  successors,  heirs  and
permitted  assigns,  and  each  and  every  successor-in-interest to any party,
whether  such  successor  acquires such interest  by  way  of  gift,  purchase,
foreclosure or any other method,  shall  hold  such interest subject to all the
terms and provisions of this Agreement.

                                     14

<PAGE>

      10.5  Governing Law; Jurisdiction; Service of Process.  To the extent not
in  conflict with Federal substantive law, this Agreement  and  the  covenants,
promises, representations and warranties contained herein, shall be governed by
the laws of the British Virgin Islands, without giving effect to any provisions
concerning  conflicts  of law or choice of law.  Any legal action or proceeding
arising out of or in connection  with  this  Agreement  shall be brought in the
courts  of  the  British  Virgin  Islands,  and the parties hereto  accept  the
exclusive jurisdiction of such courts.  Each  of  the  parties  hereto  further
irrevocably  consents  to  the  service  of  process by registered mail, return
receipt  requested, at the address specified below,  or  by  any  other  method
provided under applicable law.

      10.6  Waiver  of  Jury  Trials.  LICENSOR and LICENSEE hereby irrevocably
waives all rights such party may have to a trial by jury in any legal action or
proceeding arising out of or in connection with this Agreement.

      10.7  Publicity.  Except  as expressly permitted under this Agreement, or
as may be required by law, none of  the  parties shall originate any publicity,
news release or other public announcement  relating  to  this  Agreement or its
terms   and   conditions,  written  or  oral,  whether  to  the  public  press,
stockholders or  otherwise,  without  the  prior  written approval of the other
parties, such approval not to be unreasonably withheld.

      10.8  No Waiver of Rights.  The failure of any  party  to  insist, in any
one  or more instances, upon the performance of any of the terms, covenants  or
conditions  of this Agreement and to exercise any right hereunder, shall not be
construed as  a  waiver or relinquishment of the future performance of any such
term, covenant or  condition  or  the  future  exercise  of such right, but the
obligations of the other parties with respect to such future  performance shall
continue in full force and effect.

      10.9  Severability.   If  any provision of this Agreement is  held  by  a
tribunal  of  competent jurisdiction  to  be  illegal,  invalid,  or  otherwise
unenforceable in  any jurisdiction, then to the fullest extent permitted by law
(i) the same shall  not effect the other terms or provisions of this Agreement,
(ii) such term or provision shall be deemed modified to the extent necessary in
the tribunal's opinion  to  render  such term or provision enforceable, and the
rights  and  obligations  of  the  parties  shall  be  construed  and  enforced
accordingly, preserving to the fullest  extent the intent and agreements of the
parties set forth herein and (iii) such finding  of  invalidity,  illegality or
unenforceability  shall not affect the validity, legality or enforceability  of
such term or provision in any other jurisdiction.

      10.10 Headings.   The  headings of the articles and sections used in this
Agreement  are  included for convenience  only  and  are  not  to  be  used  in
construing or interpreting this Agreement.

                                     15

<PAGE>

      10.11 Notice.  All notices provided for or permitted under this Agreement
shall be in writing  and  (i)  delivered  personally,  (ii)  sent by commercial
overnight courier with written verification of receipt, (iii) sent by certified
or  registered U.S. mail, postage prepaid and return receipt requested  to  the
party to be notified, at the address for such party set forth below, or at such
other  address  of  which such party has provided notice in accordance with the
provisions of this Section  12.11.   Notices  shall  be  deemed  effective when
received  if sent pursuant to subsection (i) or (iii), one business  day  after
sending if  sent pursuant to subsection (ii), and when sent if sent pursuant to
subsection (iv)  on  a  business day, or one business day after sending if send
pursuant to subsection (iv)  other than on a business day.  In any event Notice
shall  be  deemed transmitted upon  receipt  of  acknowledgement  or  proof  of
delivery.  Each  Party  shall  notify  the other immediately upon any change of
address.

IF TO LICENSOR:

TRIPLE EIGHT TECHNOLOGIES, INC.
US Contact Office
c/o Fabian Vincent,
8894 Los Montanas St.
Las Vegas, NV 89147

      10.12 Counterparts.  This Agreement  may  be  executed  in  any number of
counterparts,  each of which shall be an original; but such counterparts  shall
together constitute but one and the same instrument.

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

TRIPLE EIGHT TECHNOLOGIES, INC.    NUTRI PHARMACEUTICALS RESEARCH, INC.

By:  /s/ Godfrey Yew               By:  /s/ Bryant Behrmann
--------------------               ------------------------
Name: Godfrey Yew                  Name:  Bryant Behrmann

                                     16

<PAGE>

                                   EXHIBIT A

                       TRADEMARKS & TRADE NAMES & LOGOS

"OIL TO POWDER"
"O2P"
ANY GRAPHIC REPRESENTATION OF THE FOREGOING.

                                                                    - # -
Initials_____ Initials _____

<PAGE>EXHIBIT 4.1

                             HAUPPAUGE DIGITAL, INC.
                   2003 PERFORMANCE AND EQUITY INCENTIVE PLAN

                                    ARTICLE 1

                                NAME AND PURPOSE

1.1 Name. The name of this Plan is the "Hauppauge Digital, Inc. 2003 Performance
and Equity Incentive Plan".

1.2 Purpose. The purpose of the Plan is to enhance the profitability and value
of the Company for the benefit of its shareholders by providing equity ownership
opportunities and performance based incentives to attract and retain the
services of key employees, directors and non-employee consultants of the Company
and its Subsidiaries and to motivate such individuals to put forth maximum
efforts on behalf of the Company.

                                   ARTICLE II

                  DEFINITION OF TERMS AND RULES OF CONSTRUCTION

2.1 General Definitions. The following words and phrases when used in the Plan,
unless otherwise specifically defined or unless the context clearly otherwise
requires, shall have the following respective meanings:

            (a)   "Board" means the Board of Directors of the Company.

            (b)   "Change in Control" and "Change in Control Price" have the
                  meanings set forth in Sections 10.2 and 10.3, respectively.

            (c)   "Code" means the Internal Revenue Code of 1986, as amended
                  from time to time.

            (d)   "Commission" means the Securities and Exchange Commission or
                  any successor agency.

            (e)   "Committee" means the Committee referred to in Section 4.1, or
                  the Board.

            (f)   "Company" means Hauppauge Digital, Inc., a corporation

                                       11
<PAGE>

                  organized under the laws of the State of Delaware, or any
                  successor corporation.

            (g)   "Disability" means permanent and total disability as
                  determined under procedures established by the Committee for
                  purposes of the Plan.

            (h)   "Early Retirement" means retirement, with the consent, for
                  purposes of the Plan, of the Committee or such officer of the
                  Company as may be designated from time to time by the
                  Committee, from active employment with the Company or a
                  Subsidiary prior to Normal Retirement.

            (i)   "Exchange Act" means the Securities Exchange Act of 1934, as
                  amended from time to time.

            (j)   "Fair Market Value" means the closing price of a share of
                  Stock, as of any given date, on any Exchange or in the
                  over-the-counter market on such date (or, if there is no
                  reported sale on such date, on the last preceding date on
                  which any reported sale occurred), or if no such reported
                  sales prices are available, the fair market value of the Stock
                  as established by a good faith determination of the Committee.

            (k)   "Holder" means an Optionee or a Transferee, as defined in this
                  Section 2.1 (p) and (y), respectively and shall include any
                  person to whom a Stock Option has been transferred by will or
                  the laws of descent and distribution.

            (l)   "Incentive Stock Option" means any Stock option intended to
                  qualify as an "incentive stock option" within the meaning of
                  Section 422 of the Code.

            (m)   "Long Term Performance Award" or "Long Term Award" means an
                  award under Article IX.

            (n)   "Non-Qualified Stock Option" means any Stock Option that is
                  not an Incentive Stock Option.

            (o)   "Normal Retirement" means retirement from active employment
                  with the Company or a Subsidiary at or after the retirement
                  age determined by the Board.

            (p)   "Optionee" means a person who is granted a Stock Option

                                       12
<PAGE>

                  under Article VI.

            (q)   "Plan" means the Hauppauge Digital, Inc. 2003 Performance and
                  Equity Incentive Plan, as set forth herein and as hereinafter
                  amended from time to time.

            (r)   "Restricted Stock" means an award under Article VIII.

            (s)   "Retirement" means Normal or Early Retirement.

            (t)   "Rule 16b-3" means Rule 16b-3 as promulgated by the Commission
                  under Section 16(b) of the Exchange Act as amended from time
                  to time.

            (u)   "Stock" means the Common Stock, $.01 par value, of the
                  Company.

            (v)   "Stock Appreciation Right" means a right granted under Article
                  VII.

            (w)   "Stock Option" or "Option" means an option granted under
                  Article VI.

            (x)   "Subsidiary" means any business entity in which the Company,
                  directly or indirectly, owns 50 percent or more of the total
                  combined voting power of all classes of stock or other equity
                  interest.

            (y)   "Transferee" means a member of an Optionee's Immediate Family,
                  a partnership or a trust to whom or which any Option is
                  transferred as provided in Section 6.5(c).

2.2 Other Definitions. In addition to the above definitions, certain words and
phrases used in the Plan and any agreement may be defined in other portions of
the Plan or in such agreement.

2.3 Conflicts in Plan. In the case of any conflict in the terms of the Plan, or
between the Plan and an agreement, relating to a benefit, the provisions in the
Article of the Plan which specifically grants such benefit shall control.

                                       13
<PAGE>

                                   ARTICLE III

                              STOCK SUBJECT TO PLAN

3.1 Number of Shares. The number of shares of Stock reserved for distribution
pursuant to Stock Options or other awards under the Plan shall be equal to
500,000 shares. Such shares may consist, in whole or in part, of authorized and
unissued shares or issued shares heretofore or hereafter acquired and held as
treasury shares.

3.2 Reusage. If an outstanding Stock Option or Stock Appreciation Right shall
expire or terminate without having been exercised in full, or if any Restricted
Stock award or Long Term Performance Award is not earned or is forfeited in
whole or in part, the shares subject to the unexercised or forfeited portion of
such award shall again be available for distribution in connection with awards
under the Plan. In the event that a Stock Option is exercised by tendering
shares to the Company as full or partial payment of the option exercise price,
only the number of shares issued net of the shares tendered shall be deemed
delivered under the Plan. Further, shares tendered or withheld for the payment
of taxes in connection with any award shall again be available for distribution
in connection with awards under the Plan.

3.3 Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split (including reverse stock splits),
or other change in corporate structure affecting the Stock such substitution or
adjustments shall be made in the aggregate number of shares reserved for
issuance under the Plan, in the number and option price of shares subject to
outstanding Stock Options, in the determination of the amount payable upon
exercise of outstanding Stock Appreciation Rights and in the number of shares
subject to other outstanding awards granted under the Plan as may be determined
by the Committee, in its sole discretion, to be equitable to prevent substantial
dilution or enlargement of the rights granted to participants hereunder,
provided, however, that the number of shares subject to any award will always be
a whole number. The Committee shall give notice to each participant of any
adjustment made pursuant to this paragraph, and upon such notice, such
adjustment shall be effective and binding for all purposes of the Plan.

3.4 Settlement of Awards. Shares issued under the Plan as the result of the
settlement or assumption of, or substitution of awards under the Plan for, any
awards or obligations to grant future awards of any entity acquired by or
merging with the Company shall not reduce the number of shares available for
delivery under the Plan.

3.5 Maximum Number of Shares for Incentive Stock Options and Awards. The maximum
number of shares available for delivery under the Plan through Incentive Stock
Options shall be 500,000 shares.

                                       14
<PAGE>

                                   ARTICLE IV

                                 ADMINISTRATION

4.1 Committee. The Plan shall be administered by the Committee composed of two
or more members who are who are non-employee directors as defined under Rule
16b-3 or the Board. With respect to grants to non-employee directors, the grants
shall be subject to Board approval.

4.2 Authorization of Committee. Except as limited by the express provisions of
the Plan, the Committee shall have the sole and complete authority:

      (a)   to select the employees, employee and non-employee directors, and
            non-employee consultants to whom Stock Options, Stock, Appreciation
            Rights, Restricted Stock and Long Term Performance Awards may from
            time to time be granted;

      (b)   to determine whether and to what extent Incentive Stock Options,
            Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
            Stock, Long Term Performance Awards, or any combination thereof are
            to be granted, hereunder, provided that Incentive Stock Options may
            only be granted to employees.

      (c)   to determine the number of shares to be covered by each award
            granted hereunder;

      (d)   to determine the terms and conditions of any award granted hereunder
            (including, but not limited to, the share price, any restriction or
            limitation, any vesting acceleration or any forfeiture waiver
            regarding any Stock Option or other award and the shares of Stock
            relating thereto), based on such factors as the Committee shall
            determine;

      (e)   to adjust the performance goal and measurements applicable to
            performance-based awards pursuant to the terms of the Plan; and

      (f)   to determine to what extent and under what circumstances Stock and
            other amounts payable with respect to an award shall be deferred;

                                       15
<PAGE>

4.3 Administrative Rules. The Committee shall have the authority to adopt,
alter, and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable, to interpret the terms
and provisions of the Plan and any award issued under the Plan (and any
agreement relating thereto), and otherwise to supervise the administration of
the Plan. The Committee may act only by a majority of its members then in
office, except that the members thereof may authorize any one or more of their
number or any officer of the Company to execute and deliver documents on behalf
of the Committee. Any determination made by the Committee pursuant to the
provisions of the Plan with respect to any award shall be made in its sole
discretion at the time of the grant of the award or, unless in contravention of
any express term of the Plan, at any time thereafter. Whenever the Committee has
the power, or right under this Plan to adjust, alter, amend, award, consent,
deem advisable, deem appropriate, deem desirable, deem necessary, determined,
determine conditions, determine criteria, determine factors, determine terms,
elect, exercise authority, exercise discretion, grant, interpret, make a
decision, provide, set, specify, supervise, use criteria, use factors or any
similar power or right, the Committee shall have the sole, absolute and
uncontrolled discretion in doing so. The Committee's determinations under the
Plan (including, without limitation, of the persons to receive grants or awards
and the terms thereof) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, grants or awards under
the Plan, whether or not such persons are similarly situated.

                                    ARTICLE V

                                   ELIGIBILITY

5.1 Eligibility. All employees, employee and non-employee directors, and
non-employee consultants to the Company (authorized under Form S-8 of the
Securities Act of 1933, as amended) and its Subsidiaries who in the opinion of
the Committee are responsible for, or contribute to, the management, growth, and
profitability of the business of the Company or its Subsidiaries are eligible to
be granted awards under the Plan, as hereinafter provided.

                                   ARTICLE VI

                                  STOCK OPTIONS

6.1 Grants. Stock Options may be granted alone or in addition to other awards
granted under the Plan and may be of two types: Incentive

                                       16
<PAGE>

Stock Options and Non-Qualified Stock Options. Any Stock Option granted under
the Plan shall be in such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any Optionee Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options (in each
case with or without Stock Appreciation Rights); provided, however, that the
Committee shall not have the authority to grant Incentive Stock Options to any
non-employee consultant or non-employee director. To the extent that any Stock
Option does not qualify as an Incentive Stock Option, it shall constitute a
separate Non-Qualified Stock Option.

6.2 Option Agreements. Stock Options shall be evidenced by option agreements,
the terms and provisions of which may differ. An option agreement shall indicate
on its face whether it is an agreement for Incentive Stock Options or
Non-Qualified Stock Options. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an employee as a participant in any grant of
Stock Options, determines the number of Stock Options to be granted to such
employee, and specifies the terms and provisions of the option agreement;
provided, however, that the Committee may designate in such resolution a later
date as the date of grant of any or all of the Stock Options covered thereby.
The Company shall notify a participant of any grant of Stock Options, and a
written option agreement or agreement shall be duly executed between the Company
and the participant.

6.3 No Disqualifications Under Section 422 of the Code. Anything in the Plan to
the contrary notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended, or altered nor shall any discretion or
authority granted under the Plan be exercised so as to disqualify the Plan under
Section 422 of the Code or, without the consent of the Optionee affected, to
disqualify any Incentive Stock Option under such Section 422.

6.4 Terms and Conditions of Option Grants. Options granted under the Plan shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions as the Committee shall deem desirable:

      (a)   Option Price. The option price per share of Stock purchasable under
            an Incentive Stock Option shall be equal to the Fair Market Value of
            the Stock on the date of grant or such higher price as shall be
            determined by the Committee at grant. The option price per share of
            Stock for all other Options shall be as determined by the Committee.

                                       17
<PAGE>

      (b)   Option Term. The term of each Stock Option shall be fixed by the
            Committee, but no Incentive Stock Option shall be exercisable more
            than 10 years after the date of grant of the Option, and no
            Non-Qualified Stock Option shall be exercisable more than 10 years
            and one month after the date of grant of the Option.

      (c)   Transferability of Options.

            (i)   No Stock Option shall be transferable by the Optionee other
                  than by will, by the laws of descent and distribution or in
                  accordance with the provisions of Section 6.4(c)(ii).

            (ii)  Subject to applicable securities laws, the Committee may
                  determine that a Non-Qualified Stock Option may be transferred
                  by the Optionee to one or more members of the Optionee's
                  Immediate Family, as defined in Section 6.4(c)(iii), to a
                  partnership of which the only partners are members of the
                  Optionee's Immediate Family, or to a trust established by the
                  Optionee for the benefit of one or more members of the
                  Optionee's Immediate Family. No Transferee to whom or which a
                  Non-Qualified Stock Option is transferred may further transfer
                  such Stock Option. A Non-Qualified Stock Option transferred
                  pursuant to this Section shall remain subject to the
                  provisions of the Plan, including, but not limited to, the
                  provisions of this Section 6 relating to the exercise of the
                  Stock Option upon the death, Disability, Retirement or other
                  termination of employment of the Optionee, and shall be
                  subject to such other rules as the Committee shall determine.

            (iii) For purposes of this Article VI, "Immediate Family"of the
                  Optionee means the Optionee's spouse, parents, children and
                  grandchildren.

      (d)   Exercisability. Stock Options shall be exercisable at such time or
            times and subject to such terms and conditions as shall be
            determined by the Committee. If the Committee provides that any
            Stock Option is exercisable only in installments, the Committee may
            at any time waive such installment exercise provisions, in whole or
            in part based on such factors as the Committee may determine.

                                       18
<PAGE>

      (e)   Notwithstanding the foregoing, Incentive Stock Options shall not be
            granted to any owner of 10% or more of the combined voting power of
            the Company, unless the exercise price is at least 110% of the Fair
            Market Value on the date of grant and the option states that it is
            not exercisable after the expiration of five years from the date of
            grant.

      (f)   The aggregate fair market value (determined on the date the option
            is granted) of shares subject to an Incentive Stock Option granted
            to an Optionee in any calendar year shall not exceed $100,000.

      (g)   Termination by Death. Subject to Section 6.4(d), if an Optionee's
            employment or service on the Board terminates by reason of death,
            any Stock Option held by such Optionee or any Transferee of such
            Optionee may thereafter be exercised, to the extent then exercisable
            or on such accelerated basis as the Committee may determine, for a
            period of two years from the date of such death or until the
            expiration of the stated term of such Stock Option, whichever period
            is the shorter; provided, however, that if the expiration of the
            stated term of any such Stock Option is less than one year following
            the death of the Optionee, the Stock Option shall be exercisable for
            a period of one year from the date of such death.

      (h)   Termination by Reason of Disability. Subject to Section 6.4(d), if
            an Optionee's employment or service on the Board terminates by
            reason of Disability, any Stock Option held by such Optionee or any
            Transferee of such Optionee may thereafter be exercised by the
            Holder, to the extent it was exercisable at the time of termination
            or on such accelerated basis as the Committee may determine, for a
            period of two years from the date of such termination of employment
            or until the expiration of the stated term of such Stock Option,
            whichever period is the shorter; provided, however, that, if the
            Holder dies while any such Stock Option remains exercisable, any
            unexercised Stock Option held by such Holder at death shall continue
            to be exercisable to the extent to which it was exercisable at the
            time of the Holder's death for a period of 12 months from the date
            of such death. In the event of termination of employment by reason
            of Disability, if an Incentive Stock Option is exercised after the
            expiration of the exercise periods that apply for purposes of
            Section 422 of the Code, such Stock Option will thereafter be
            treated as a Non-Qualified Stock Option.

                                       19
<PAGE>

      (i)   Termination by Reason of Retirement. Subject to Section 6.4(d), if
            an Optionee's employment or service on the Board terminates by
            reason of Retirement, any Stock Option held by such Optionee or any
            Transferee of such Optionee may thereafter be exercised by the
            Holder, to the extent it was exercisable at the time of Retirement
            or on such accelerated basis as the Committee may determine, for a
            period of three years from the date of such termination of
            employment or until the expiration of the stated term of such Stock
            Option, whichever period is the shorter; provided, however that, if
            the Holder dies within such three-year period, any unexercised Stock
            Option held by such Holder shall, notwithstanding the expiration of
            such three-year period, continue to be exercisable to the extent to
            which it was exercisable at the time of death for a period of 12
            months from the date of such death. In the event of termination of
            employment by reason of Retirement, if an Incentive Stock Option is
            exercised after the expiration of the exercise periods that apply
            for purposes of Section 422 of the Code, such Stock Option will
            thereafter be treated as a Non-Qualified Stock Option.

      (j)   Other Termination. Subject to Section 6.4(d), if an Optionee's
            employment terminates for any reason other than death, Disability,
            Retirement, or Cause (as hereinafter defined in Section 10.1(v)),
            any Stock Option held by such Optionee or any Transferee of such
            Optionee may thereafter be exercised by the Holder, to the extent it
            was exercisable at the time of termination, for a period of three
            months from the date of such termination of employment or until the
            expiration of the stated term of such Stock Option, whichever period
            is the shorter; provided, however, that if the Holder dies within
            such three-month period, any unexercised Stock Options held by such
            Holder shall, notwithstanding the expiration of such three-month
            period, continue to be exercisable to the extent to which it was
            exercisable at the time of death for a period of 12 months from the
            date of such death. If an Optionee's employment is terminated for
            Cause (as determined pursuant to section 10.1 (a)(v)), all rights
            under any Stock Option held by such Optionee or any Transferee of
            such Optionee shall expire immediately upon the giving to the
            Optionee of notice of such termination, unless otherwise determined
            by the Committee. Notwithstanding anything to the contrary contained
            in this plan, non-qualified options, at the determination of the
            Committee, may be exercised after an Optionee's employment
            terminates.

                                       20
<PAGE>

      (k)   Method of Exercise. Stock Options shall be exercisable (i) during
            the Holder's lifetime, only by the Holder or by the guardian or
            legal representative of the Holder, and (ii) following the death of
            the Holder, only by the person to whom they are transferred by will
            or the laws of descent and distribution. For purposes of this
            Section 6.4(k) only, the term "Holder" shall include any person to
            whom a Stock Option is transferred by will or the laws of descent
            and distribution. Subject to the provisions of this Article VI,
            Stock Options may be exercised, in whole or in part, at any time
            during the option term by giving written notice of exercise to the
            Company specifying the number of shares to be purchased. Such notice
            shall be accompanied by payment in full of the purchase price in
            cash (including check, bank draft, money order, or such other
            instrument as the Company may accept). Unless otherwise determined
            by the Committee at any time or from time to time, payment in full
            or in part may also be made (i) by delivering a duly executed notice
            of exercise together with irrevocable instructions from the Holder
            to a broker to deliver promptly to the Company sufficient proceeds
            from a sale or loan of the shares subject to the Stock Option to pay
            the purchase price, or (ii) in the form of Stock which is not
            Restricted Stock already owned by the Holder or, in the case of the
            exercise of a Non-Qualified Stock Option, Restricted Stock subject
            to an award hereunder (based, in each case, on the Fair Market Value
            of the Stock on the date the Stock Option is exercised). If payment
            of the option exercise price of a Non-Qualified Stock Option is made
            in whole or in part in the form of Restricted Stock, such Restricted
            Stock (and any replacement shares relating thereto) shall remain
            restricted in accordance with the original terms of the Restricted
            Stock award in question, and any additional Stock received upon the
            exercise shall be subject to the same forfeiture restrictions,
            unless otherwise determined by the Committee.

      Notwithstanding the foregoing, no shares of Stock shall be issued until
full payment therefor has been made. Subject to any forfeiture restrictions that
may apply if a Stock Option is exercised using Restricted Stock, a Holder shall
have all of the rights of a stockholder of the Company, including the right to
vote the shares and the right to receive dividends, with respect to shares
subject to the Stock Option when the Holder has given written notice of
exercise, has paid in full for such shares, and, if requested, has given the
representation described in

                                       21
<PAGE>

Section 14.1.

            Shares issued upon exercise of a Stock Option shall be issued in the
name of the Holder or, at the request of the Holder, in the names of such Holder
and the Holder's spouse with right of survivorship as community property,
community property with right of survivorship or joint tenants.

      (l)   Cashing Out of Options. In any case when a Stock Option is exercised
            after the death of a Holder, the Committee may elect to cash out all
            or any part of the Stock Option by paying the person to whom the
            Stock Option has been transferred by reason of the death of the
            Holder an amount, in cash or shares of Stock, equal in value to the
            excess of the Fair Market Value of the Stock over the option price
            on the effective date of such cash out.

      (m)   Substitute Options. Stock Options or Stock Appreciation Rights may
            be granted under the Plan from time to time in substitution for
            stock options or stock appreciation rights held by employees of any
            corporation who, as the result of a merger, consolidation, or
            combination of such other corporation with, or the acquisition of
            all or substantially all of the assets or stock of such other
            corporation by, the Company or a Subsidiary, become employees of the
            Company or a Subsidiary. The terms and conditions of any substitute
            Stock Options or Stock Appreciation Rights so granted may vary from
            the terms and conditions set forth in the Plan to such extent as the
            Committee at the time of grant may deem appropriate to conform, in
            whole or in part, to the provisions of the stock options or stock
            appreciation rights in substitution for which they are granted;
            provided, however, that in the event a stock option for which a
            substitute Stock Option is being granted is an incentive stock
            option, no such variation shall be permitted the effect of which
            would be to adversely affect the status of any such substitute Stock
            Options as an Incentive Stock Option.

      (n)   Deferral of Option Gains. An Optionee may elect to defer to a future
            date receipt of the shares of Stock to be acquired upon exercise of
            a Stock Option. Such election shall be made by delivering to the
            Company not later than six months prior to the exercise of the Stock
            Option a written notice of the election specifying the future date
            (the "Deferral Date") for receipt of the shares. At any time, and
            from time to time, prior to the

                                       22
<PAGE>

            delivery to the Optionee of shares the receipt of which has been
            deferred as provided in this section, the Optionee may designate by
            written notice to the Company a new date, which date shall be later
            than the Deferral Date, and such new date shall thereafter be the
            Deferral Date with respect to such shares.

                                   ARTICLE VII

                            STOCK APPRECIATION RIGHTS

7.1 (a) Grant of Stock Appreciation Right. A Stock Appreciation Right may be
granted in conjunction with all or part of any Stock Option granted under the
Plan. In the case of a Non-Qualified Stock Option, such Right may be granted
only at the time of grant of such Stock Option. A Stock Appreciation Right
independent of a Stock Option grant may also be awarded by the Committee, in
which event the provisions of this Article VII shall be applied for purposes of
determining the operation of such Stock Appreciation Right as if a Non-Qualified
Stock Option had been granted on the date of the grant of and in conjunction
with such independent Stock Appreciation Right.

      (b)   A Stock Appreciation right granted with respect to a given Stock
            Option shall terminate and no longer be exercisable to the extent of
            the shares with respect to which the related Stock Option is
            exercised or terminates. A Stock Appreciation Right may be exercised
            by a Holder in accordance with the provisions of this Article VII by
            surrendering the applicable portion of the related Stock Option in
            accordance with procedures established by the Committee. Upon such
            exercise and surrender, the Holder shall be entitled to receive an
            amount determined in the manner prescribed in Section 7.2. The Stock
            Option which has been so surrendered shall no longer be exercisable
            to the extent the related Stock Appreciation Right has been
            exercised.

      (c)   Stock Appreciation Rights shall be subject to such terms and
            conditions as shall be determined by the Committee, including, but
            not limited to, the following:

            (i)   Exercisability. A Stock Appreciation Right shall be
                  exercisable only at such time or times and to the extent that
                  the Stock Option to which it relates is exercisable in
                  accordance with the provisions of Article VI and this Article
                  VII; provided, however, that a Stock Appreciation Right shall
                  not be exercisable during the first six months

                                       23
<PAGE>

                  of its term by an Optionee who is actually or potentially
                  subject to Section 16(b) of the Exchange Act, unless otherwise
                  determined by the Committee in the event of death or
                  Disability of the Optionee prior to the expiration of the
                  six-month period.

7.2 Payment Upon Exercise. Upon the exercise of a Stock Appreciation Right, a
Holder shall be entitled to receive an amount in cash, shares of Stock, or both
equal in value to the excess of the Fair Market Value on the date of exercise of
one share of Stock over the option exercise prior per share specified in the
related Stock Option multiplied by the number of shares in respect of which the
Stock Appreciation Right shall have been exercised. The Committee shall have the
right to determine the form of payment in each case.

            In the case of a Stock Appreciation Right held by an Optionee who is
            actually or potentially subject to Section 16 of the Exchange Act,
            the Committee may require that such Stock Appreciation Right be
            exercised only in accordance with the applicable provisions of Rule
            16b-3.

7.3 Non-transferability. A Stock Appreciation Right shall be transferable only
when and to the extent that the related Stock Option would be transferable under
Section 6.4(c).

7.4 Effect of Change in Control. The Committee may provide, at the time of
grant, that a Stock Appreciation Right can be exercised only in the event of a
Change in Control, subject to such terms and conditions as the Committee may
specify at grant. The Committee may also provide that, in the event of a Change
in Control, the amount to be paid upon the exercise of a Stock Appreciation
Right shall be based on the Change in Control price, subject to such terms and
conditions as the Committee may specify at grant.

                                  ARTICLE VIII

                                RESTRICTED STOCK

8.1 Administration. Shares of Restricted Stock may be issued either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the officers, employee and non-employee directors and non-employee consultants
to whom and the time or times at which grants of Restricted Stock will be made,
the number of shares to be awarded the time or times within which such awards
may be subject to

                                       24
<PAGE>

forfeiture, and any other terms and conditions of the awards, in addition to
those contained in Section 8.3. The Committee may condition the grant of
Restricted Stock upon the attainment of specified performance goals or such
other factors or criteria as the Committee shall determine. The provisions of
Restricted Stock awards need not be the same with respect to each recipient.

8.2 Awards and Certificates. Each participant receiving a Restricted Stock award
shall be issued a certificate in respect of such shares of Restricted Stock.
Such certificate shall be registered in the name of such participant and shall
bear an appropriate legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following form or such other form
as authorized by the Committee:

            "The transferability of this certificate and the shares of stock
            represented hereby are subject to the terms and conditions
            (including forfeiture) of the Hauppauge Digital, Inc. 2003
            Performance and Equity Incentive Plan and a Restricted Stock
            Agreement. Copies of such Plan and Agreement are on file at the
            offices of Hauppauge Digital, Inc., 91 Cabot Court, Hauppauge, New
            York 11788.

The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Restricted Stock award, the participant shall have
delivered a stock power, endorsed in blank, relating to the Stock covered by
such award.

8.3 Terms and Conditions. Shares of Restricted Stock shall be subject to the
following terms and conditions:

            (i)   Subject to the provisions of the Plan and the Restricted Stock
                  Agreement referred to in Section 8.3(vi), during such period
                  commencing with the date of such award as shall be set by the
                  Committee (the "Restriction Period"), the participant shall
                  not be permitted to sell, assign, transfer, pledge, or
                  otherwise encumber shares of Restricted Stock. Within these
                  limits, the Committee may provide for the lapse of such
                  restrictions in installments and may accelerate or waive such
                  restrictions, in whole or in part, based on service,
                  performance, and such other

                                       25
<PAGE>

                  facts or criteria as the Committee may determine.

            (ii)  Except as provided in Section 8.3(i), the participant shall
                  have, with respect to the shares of Restricted Stock, all of
                  the rights of a stockholder of the Company, including the
                  right to vote the shares and the right to receive any cash
                  dividends thereon; provided, however, that the Committee may
                  provide at the time of an award that cash dividends shall be
                  automatically deferred and reinvested in additional Restricted
                  Stock. Dividends on Restricted Stock which are payable in
                  Stock shall be paid in the form of additional shares of
                  Restricted Stock.

            (iii) Except to the extent otherwise provided in the applicable
                  Restricted Stock Agreement and Sections 8.3(i) and (iv), upon
                  termination of a participant's employment for any reason
                  during the Restriction Period, all shares still subject to
                  restriction shall be forfeited by the participant.

            (iv)  In the event of the death of a participant during the
                  Restriction Period without a prior forfeiture of the
                  Restricted Stock subject to such Restriction Period,
                  unlegended certificates for such shares shall be delivered to
                  the participant, except as otherwise may be necessary with
                  respect to any applicable securities laws.

            (v)   If and when the Restriction period expires without a prior
                  forfeiture of the Restricted Stock subject to such Restriction
                  Period, unlegended certificates for such shares shall be
                  delivered to the participant, except as otherwise may be
                  necessary with respect to any applicable securities laws.

            (vi)  Each award shall be confirmed by, and be subject to the terms
                  of, a Restricted Stock Agreement which shall be executed by
                  the Company and the recipient of the Restricted Stock.

                                   ARTICLE IX

                          LONG TERM PERFORMANCE AWARDS

9.1 Awards and Administration. Long Term Performance awards may be

                                       26
<PAGE>

awarded either alone or in addition to other awards granted under the Plan. The
Committee shall determine the nature, length, and starting date of the
performance period (the "Performance Period") for each Long Term Performance
Award, which shall be at least two years (subject to Article X), and shall
determine the performance objectives to be used in valuing Long Term Performance
awards and determining the extent to which such Long Term Performance Awards
have been earned. The maximum award for any individual with respect to any one
year of any Performance Period shall be 100,000 shares of Stock. Performance
objectives may vary from participant to participant and between groups of
participants and shall be based upon one or more of the following Company,
Subsidiary, business unit, or individual performance factors or criteria (on a
pre- or post- tax basis and on an aggregate or per share basis) as the Committee
may deem appropriate; earnings, sales, Stock price, return on equity, assets or
capital, economic value added, cash flow, total shareholder return, costs,
margins, market share, any combination of the foregoing. Performance Periods may
overlap and participants may participate simultaneously with respect to Long
Term performance Awards that are subject to different Performance Periods and
different performance factors and criteria. Long Term Performance Awards shall
be confirmed by, and be subject to the terms of, a Long Term Performance Award
Agreement. The terms of such awards need not be the same with respect to each
participant.

      (a)   Adjustment of Awards. The Committee may adjust the performance goals
            and measurements applicable to Long Term Performance Awards to take
            into account changes in law and accounting and tax rules and to make
            such adjustments as the Committee deems necessary or appropriate to
            reflect the inclusion or exclusion of the impact of extraordinary or
            unusual items, events, or circumstances in order to avoid windfalls
            or hardships.

      (b)   Termination of Employment. Subject to Article X and unless otherwise
            provided in the applicable Long Term Performance Award Agreement, if
            a participant terminates employment during a Performance Period
            because of death, Disability, or Retirement, such participant shall
            be entitled to a payment with respect to each outstanding Long Term
            Performance Award at the end of the applicable Performance Period;

            (i)   based, to the extent relevant under the terms of the award,
                  upon the participant's performance of the portion of such
                  Performance Period ending on the date of termination and the
                  performance of the Company or any applicable business unit for
                  the entire Performance Period, and

                                       27
<PAGE>

            (ii)  prorated for the portion of the Performance Period during
                  which the participant was employed by the Company or a
                  Subsidiary, all as determined by the Committee. The Committee
                  may provide for an earlier payment in settlement of such award
                  in such amount and under such terms and conditions as the
                  Committee deems appropriate. Subject to Article X and except
                  as otherwise provided in the applicable Long Term Performance
                  Award Agreement, if a participant terminates employment during
                  a Performance Period for any other reason, then such
                  participant shall not be entitled to any payment with respect
                  to the Long Term Performance Awards subject to such
                  Performance Period, unless the Committee shall otherwise
                  determine.

      (c)   Form of Payment. The earned portion of a Long Term Performance Award
            may be paid currently or on a deferred basis and may provide for
            such interest or earnings equivalent as the Committee may determine.
            Payment shall be made in the form of cash or whole shares of Stock,
            including Restricted Stock, or a combination thereof, either in a
            lump sum payment or in annual installments, all as the Committee
            shall determine.

                                    ARTICLE X

                          CHANGE IN CONTROL PROVISIONS

10.1 Impact of Event. In the event of:

      (a)   a "Change in Control" as defined in Section 10.2, but only if and to
            the extent so determined by the Committee, the following
            acceleration and valuation provisions shall apply:

            (i)   Stock Options and Stock Appreciation Rights outstanding as of
                  the date such Change in Control is determined to have occurred
                  and not then exercisable and vested shall become fully
                  exercisable and vested as provided in Section 10.1(a)(v)
                  below, unless the terms of the award provide otherwise;
                  provided, however, that, in the case of Stock Appreciation
                  rights held by an Optionee who is actually subject to Section
                  16(b) of the Exchange Act, such Stock Appreciation Rights
                  shall not become exercisable and vested unless they shall have
                  been outstanding for at least six months at the date such
                  Change in Control is determined to

                                       28
<PAGE>

                  have occurred.

            (ii)  The restrictions and forfeiture provisions applicable to any
                  restricted Stock shall lapse, and such Restricted Stock shall
                  become fully vested, unless the terms of the award provide
                  otherwise.

            (iii) The value of all outstanding Stock Options, Stock Appreciation
                  Rights, and Restricted Stock shall, unless otherwise
                  determined by the Committee at or after grant, if cashed out
                  shall be on the basis of the"Change in Control Price", as
                  defined in Section 10.3, as of the date such change in Control
                  is determined to have occurred or such other date as the
                  Committee may determine prior to the Change in Control.

            (iv)  Any outstanding Long Term Performance Awards shall, unless the
                  Committee otherwise determines, be vested and paid out based
                  on the prorated target results for the Performance Periods in
                  question, unless the Committee provides prior to the Change in
                  Control event for a different payment.

            (v)   Each Option, Stock Appreciation Right, Long Term Performance
                  Award or restricted stock award granted to an employee of the
                  Company shall vest or be exercisable upon termination of the
                  employee's employment within twenty-four (24) months from the
                  date of the Change in Control, unless the employee is
                  terminated for "Cause" or the employee resigns his employment
                  without "Good Reason". Except for death or disability, in
                  which event the Option, Stock Appreciation Right, Long Term
                  Performance Award or restricted stock award must be exercised
                  within twelve (12) months thereafter, the Employee shall have
                  30 days from after his employment is terminated, after a
                  Change in Control, to exercise all unexercised Options, Stock
                  Appreciation Rights, Long Term Performance Awards, or
                  restricted stock awards. "Cause" is defined herein as the
                  failure of the employee to properly perform his duties on
                  behalf of the Company, as reasonably determined by the
                  Committee in its sole discretion or as provided in the
                  Agreement making the grant. "Good Reason" shall be the
                  assignment to the Employee of duties inconsistent with his or
                  her duties prior to the Change in Control, or any other

                                       29
<PAGE>

                  action (but not a change in title) that results in a
                  diminution of the Employee's duties or responsibilities, other
                  than an isolated, insubstantial or inadvertent action which is
                  remedied by the Company. In the event that the employee is
                  offered a position after a Change in Control that has a salary
                  and bonus level at least equal to that in effect prior to the
                  Change in Control, it shall be presumed that the employee did
                  not have Good Reason.

10.2 Definition of "Change in Control". For purposes of Section 10.1(a), a
"Change in Control" means a change in control of the Company of a nature that
would be required to be reported in response to Item 1(a) of the Current Report
on Form 8-K, as in effect on the effective date of the Plan, pursuant to Section
13 or 15(d) of the Exchange Act; provided that, without limitation, such a
"Change in Control" shall be deemed to have occurred if:

      (a)   A third person, including a "group" as such term is used in Section
            13(d)(3) of the Exchange Act, other than the trustee of a Company
            employee benefit plan, becomes the beneficial owner, directly or
            indirectly of 20 percent or more of the combined voting power of the
            company's outstanding voting securities ordinarily having the right
            to vote for the election of the Board;

      (b)   During any period of 24 consecutive months individuals who, at the
            beginning of such consecutive 24-month period, constitute the Board
            of Directors of the Company (the "Board" generally and as of the
            effective date of the Plan the "Incumbent Board") cease for any
            reason (other than Retirement upon reaching Normal Retirement age,
            Disability, or death) to constitute at least a majority of the
            Board; provided that any person becoming a director subsequent to
            the effective date of the Plan whose election, or nomination for
            election by the Company's shareholders, was approved by a vote of at
            least three-quarters of the Directors comprising the Incumbent Board
            (other than an election or nomination of an individual whose initial
            assumption of office is in connection with an actual or threatened
            election contest relating to the election of the Directors of the
            Company, as such terms are used in Rule 14a-11 of Regulation 14A
            promulgated under the Exchange Act) shall be, for purposes of this
            Agreement, considered as though such person were a member of the
            Incumbent Board; or

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<PAGE>

      (c)   The Company shall cease to be a publicly owned corporation.

10.3 Change in Control Price. For purposes of this Section 10, "Change in
Control Price" means the highest price per share paid or offered in any bona
fide transaction related to an actual Change in Control of the Company at any
time during the preceding 60-day period as determined by the Committee, except
that, in the case of Incentive Stock Options and Stock Appreciation Rights
relating to Incentive Stock Options, such price shall be based only on
transactions reported for the date on which the Committee decides to cash out
such Stock Options.

                                   ARTICLE XI

                                 RELOAD OPTIONS

11.1 Authorization of Reload Options. Concurrently with an award of Stock
Options, the Committee may authorize reload options ("Reload Options") to
purchase a number of shares of Stock. The number of Reload Options shall equal
to the extent authorized by the committee:

      (a)   the number of shares of Stock used to exercise the underlying Stock
            Options and

      (b)   the number of shares of Stock used to satisfy any tax withholding
            requirement incident to the exercise of the underlying Stock
            Options.

            The grant of a Reload Option will become effective upon the exercise
            of underlying Stock Options through the use of shares of Stock held
            by the Optionee for at least 12 months. Notwithstanding the fact
            that the underlying option may be an Incentive Stock Option, a
            Reload Option is not intended to qualify as an Incentive Stock
            Option.

11.2 Reload Option Amendment. Each option agreement shall state whether the
Committee has authorized Reload Options with respect to the underlying Stock
Options. Upon the exercise of an underlying Stock Option, the Reload Option will
be evidenced by an amendment to the underlying stock option agreement.

11.3 Reload Option Price. The option price per share of Stock deliverable upon
the exercise of a Reload Option shall be the Fair Market Value of a share of
Stock on the date the grant of the Reload Option becomes effective.

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<PAGE>

11.4 Term and Exercise. Each Reload Option is fully exercisable six months from
the effective date of grant. The term of each Reload Option shall be equal to
the remaining option term of the underlying Stock Option.

11.5 Termination of Employment. No additional Reload Options shall be granted to
Optionees when Stock Options are exercised pursuant to the terms of this Plan
following termination of the Optionee's employment.

                                   ARTICLE XII

                                   AMENDMENTS

12.1 Amendments to Plan. The Board may amend, suspend, or discontinue the Plan
or any portion thereof at any time, but no amendment, suspension, or
discontinuation shall be made which would impair the rights of a Holder under a
Stock Option or a recipient of a Stock Appreciation Right, restricted stock
award, or Long Term Performance Award theretofore granted without the Holder's
or recipient's consent or which without the approval of the Company's
stockholders, would:

      (a)   except as expressly Provided in the Plan, increase the total number
            of shares reserved for the purpose of the Plan;

      (b)   decrease the option price of any Stock Option to less than the Fair
            Market Value on the date of grant;

      (c)   change the class of employees eligible to participate in the Plan;
            or

      (d)   extend the maximum option periods under Section 6.4.

12.2 Amendments to Stock Options or Amounts. The Committee may amend the terms
of any Stock Option or other award theretofore granted, prospectively or
retroactively, but no such amendment shall impair the right of any holder
without the holder's consent. Subject to the above provisions, the Board shall
have authority to amend the Plan to take into account changes in law and tax and
accounting rules, as well as other developments.

                                       32
<PAGE>

                                  ARTICLE XIII

                             UNFUNDED STATUS OF PLAN

13.1 It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or make payments; provided, however, that, unless the Committee
otherwise determines, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.

                                   ARTICLE XIV

                               GENERAL PROVISIONS

14.1 Certificates. All certificates for shares of Stock or other securities
delivered under the Plan shall be subject to such transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Commission, any stock exchange upon which the
Stock is then listed, and any applicable Federal or state securities law, and
the Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions. The Committee may require
any Optionee purchasing shares pursuant to a Stock Option to represent to and
agree with the Company in writing that the Optionee is acquiring the shares
without a view to the distribution thereof.

14.2 Compensation Arrangements. Nothing contained in this Plan shall prevent the
Company or a Subsidiary from adoption of other or additional compensation
arrangements for its employees.

14.3 No Rights to Continued Employment. Neither the adoption of the Plan nor the
granting of any Stock Option, Stock Appreciation Right, Restricted Stock or Long
Term Award shall confer upon any employee any right to continued employment or
constitute an agreement or understanding that the Company will retain a director
for any period of time or at any particular rate of compensation, nor shall the
same interfere in any way with the right of the Company or a Subsidiary to
terminate the employment of any employee or the service of any director at any
time.

14.4 Withholding and Employment Taxes. No later than the date on which the
Company is required to withhold federal or state income taxes or employment
taxes in respect of an award, the participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any Federal,
state, local, or other taxes of any kind required by law to be withheld with
respect to such award or any payment or

                                       33
<PAGE>

distribution made in connection therewith. Unless otherwise determined by the
Committee, withholding or employment tax obligations may be settled with Stock,
including Stock that is part of the award that gives rise to the withholding or
employment tax requirements; provided, however, that in the case of any Optionee
who is actually subject to Section 16(b) of the Exchange Act, any such
settlement shall comply with the applicable requirements of Rule 16(b)-3. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the participant.

14.5 Reinvestment of Dividends. The reinvestment of dividends in additional
Restricted Stock at the time of any dividend payment shall be permissible only
if sufficient shares of Stock are available under Article III for such
reinvestment (taking into account then outstanding Stock Options and other Plan
awards).

14.6 Beneficiaries Designation. The Committee shall establish such procedures as
it deems appropriate for a participant to designate a beneficiary to whom any
amounts payable with respect to outstanding awards under the Plan in the event
of the participant's death are to be paid.

14.7 Loan Program. The Board may institute a loan program to assist one or more
participants in financing the exercise of outstanding options through
full-recourse interest bearing promissory notes. However, the maximum amount of
financing provided any optionee may not exceed the cash consideration payable
for the issued shares plus all applicable taxes incurred in connection with the
acquisition of the shares. No loans may be made to anyone not authorized by any
applicable law.

14.8 Governing Law. The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
New York, except where Delaware may otherwise be applicable.

14.9 Rule 16b-3 Requirement. Notwithstanding anything in this Plan to the
contrary, if the Committee determines that the Plan or grant or award cannot
satisfy the requirements of Rule 16b-3, then it shall have the authority to
waive or modify those provisions of the Plan or grant or award so as to enable
compliance with Rule 16b-3.

14.10 Attestation. Wherever in this Plan or any agreement evidencing an Award a
Participant is permitted to pay the exercise price

                                       34
<PAGE>

of an Option or taxes relating to the exercise of an Option by delivering
Shares, the Participant may, subject to procedures satisfactory to the
Committee, satisfy such delivery requirement by presenting proof of beneficial
ownership of such Shares, in which case the Company shall treat the Option as
exercised without further payment and/or shall withhold such number of Shares
from the Shares acquired by the exercise of the Option, as appropriate.

                                   ARTICLE XV

                  EFFECTIVE DATE OF PLAN; SHAREHOLDER APPROVAL

15.1 The Plan shall be effective as of May 29, 2003, subject however to the
approval of the Plan by the holders of at least a majority of the outstanding
shares of Stock of the Company present or represented and entitled to vote at a
meeting of shareholders of the Company. Awards may be made under the Plan on and
after its effective date; provided, however, that any such awards shall be null
and void if shareholder approval of the Plan is not obtained within 12 months of
the adoption of the Plan by the Board.

                                       35
<PAGE>

                                   ARTICLE XVI

                                  TERM OF PLAN

16.1 No Stock Option, Stock Appreciation Right, restricted stock award, or Long
Term Performance award shall be granted on or after the tenth anniversary of the
effective date of the Plan, but awards granted prior to such tenth anniversary
(including, without limitation, Long Term Performance Awards for Performance
Periods commencing prior to such tenth anniversary) may extend beyond that date.

                                       36

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