NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

COVENANTS

1.                                        Consideration .

a.                                        Resignation . Employee hereby tenders notice to the Company of his voluntary resignation from employment with the Company, and from any and all of the Company’s subsidiaries or affiliates, and from his seat on the Company’s Board of Directors, and from any and all Boards of Directors of the Company’s subsidiaries or affiliates, effective August 31, 2008.

b.                                       Payment . The Company agrees to pay Employee the lump sum of three hundred eighty thousand dollars ($380,000), less applicable withholding. This payment will be made to Employee within ten (10) business days after the Effective Date of this Agreement.

c.                                        Retention Incentive . As further consideration for this Agreement, the Retention Incentive will, on the Resignation Date, vest as to the portion of the award that would have otherwise vested on November 30, 2008 had Employee remained employed by the Company through that date. Accordingly, the Company will deliver to Employee eight hundred seventy-six thousand eight hundred forty-four (876,844) shares of unrestricted common stock in the Company. After taking into account the acceleration of vesting of the Retention Incentive, the Parties agree that the Equity Awards have vested as set forth on Schedule A and Employee acknowledges that he will have vested in no more and this represents all of the equity to which he is entitled to purchase and/or receive from the Company. The vested Equity Awards and any shares of Common Stock Employee may acquire pursuant thereto shall continue to be governed by the terms and conditions of the Plans and Equity Award Agreements.

d.                                       Extension . As part of the consideration for this Agreement, any of Employee’s options to purchase shares of Company common stock as set forth in Schedule A (the “Options”) will, to the extent vested as of the Resignation Date, remain exercisable until August 30, 2009, or earlier as set forth in Section 12(c) of the 1997 Stock Plan and Section 14(c) of the Equity Incentive Plan. Employee acknowledges and agrees that these amendments may disqualify any Options that currently qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and result in any such Options becoming nonstatutory stock options. Employee further understands that in any event an incentive stock option converts into a nonstatutory stock option three months and one day after the Resignation Date.

2.                                        Accrued Wages and Vacation ; Expenses. The Company will pay Employee all of Employee’s accrued and unused vacation through the Resignation Date. Following the timely submission of proper expense reports by Employee, the Company shall reimburse Employee for all documented expenses reasonably and necessarily incurred by Employee in connection with the business of the Company prior to the Resignation Date. These payments shall be made promptly upon termination and within the period of time mandated by law.

3.                                        Benefits . Employee’s health insurance benefits shall cease on August 31, 2008, subject to Employee’s right to continue his health insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. Employee’s participation in all benefits and

incidents of employment, including, but not limited to, vesting in Equity Awards and the accrual of bonuses, vacation, and paid time off, will cease as of the Resignation Date.

4.                                        Payment of Salary and Receipt of All Benefits . Employee acknowledges and represents that, other than the payments and other consideration set forth above in this Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, leave, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Employee, including but not limited to any and all benefits under the Offer Letter, the Retention Agreement, and the Severance Agreement. Employee further acknowledges and represents that he has received any leave to which he was entitled or which he requested, if any, under the California Family Rights Act and/or the Family Medical Leave Act, and that he did not sustain any workplace injury, during his employment with the Company.

5.                                        Release of Claims . Employee agrees that other than the Company’s ongoing obligations to Employee as set forth in the Indemnity Agreement, which is not affected by this Agreement, the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Releasees”). Employee, on his own behalf and on behalf of his respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement, including, without limitation:

a.                                        any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of that relationship;

b.                                       any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

c.                                        any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

d.                                       any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act, except as prohibited by law; the Fair Credit Reporting Act; the Age

Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act, except as prohibited by law; the Sarbanes-Oxley Act of 2002; the California Family Rights Act; the California Labor Code, except as prohibited by law; the California Workers’ Compensation Act, except as prohibited by law; and the California Fair Employment and Housing Act;

e.                                        any and all claims for violation of the federal or any state constitution;

f.                                          any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

g.                                       any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

h.                                       any and all claims for attorneys’ fees an