Exhibit 10.16

                

MODULAR MEDICAL, INC.

2017 EQUITY INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT

               Modular Medical, Inc. (the “Company”) hereby grants to the
undersigned Participant, an option (the “Option”) to purchase the number of
shares of the Company’s Common Stock set forth below. The Option is subject to
all of the terms and conditions as set forth in this Notice of Stock Option
Grant, in the Stock Option Agreement and in the 2017 Equity Incentive Plan (as
may be amended from time to time, “the Plan”). Capitalized terms not explicitly
defined herein but defined in the Plan or the Stock Option Agreement will have
the same definitions as in the Plan or the Stock Option Agreement.

Name of Participant:   Date of Grant:   Vesting Commencement Date:   Exercise
Price per Share:   Total Number of Shares Subject to Option:   Type of Option
Incentive Stock Option   Nonstatutory Stock Option Expiration Date:        

Vesting Schedule:

               Subject to any acceleration provisions in the Plan, the Option
shall be exercisable, in whole or in part, according to the following Vesting
Schedule:

               [EE NEW HIRE VESTING: This Option will vest and become
exercisable with respect to 1/3rd of the Shares subject to this Option on the
annual anniversary of the Vesting Commencement Date. Thereafter, this Option
vests and becomes exercisable with respect to an additional 1/36th of the Shares
subject to this Option when Participant completes each additional month of
Continuous Service.]

               [BOD DIRECTOR VESTING: This Option will vest and become
exercisable with respect to 1/3rd of the Shares subject to this Option on each
annual anniversary of the Vesting Commencement Date.]

               [REFRESH VESTING: This Option will vest and become exercisable as
to 1/36th of the Shares on each monthly anniversary of the Vesting Commencement
Date until all of the Shares subject to the Option have vested.]

 

 

               [IMMEDIATE VESTING: This Option shall be immediately exercisable
in whole or in part on the Date of Grant.]

                

               Termination Period:

               This Option shall be exercisable for three months after
Participant ceases to provide Continuous Service, unless such termination is due
to Participant’s death or Disability, in which case this Option shall be
exercisable for 12 months after Participant ceases to provide Continuous
Service. Notwithstanding the foregoing sentence, in no event may this Option be
exercised after the Expiration Date set forth above.

                

               [End of Page; Signature page to follow]

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               By your written signature below (or your electronic acceptance)
and the signature of the Company’s representative below, you and the Company
agree that this Option is granted under and governed by the term and conditions
of the Plan and the Stock Option Agreement (this “Agreement”), both of which are
attached to and made a part of this document.

               By your written signature below (or your electronic acceptance),
you further agree that the Company may deliver by e-mail all documents relating
to the Plan or this Option (including without limitation, prospectuses required
by the Securities and Exchange Commission) and all other documents that the
Company is required to deliver to its security holders (including without
limitation, annual reports and proxy statements). You also agree that the
Company may deliver these documents by posting them on a website maintained by
the Company or by a third party under contract with the Company. If the Company
posts these documents on a website, it will notify you by e-mail. Should you
electronically accept this Agreement, you agree to the following: “This
electronic contract contains my electronic signature, which I have executed with
the intent to sign this Agreement.”

PARTICIPANT

 

____________________________________

Participant’s Signature

 

____________________________________

Participant’s Printed Name

 

MODULAR MEDICAL, INC.

 

By: ____________________________

 

 

Title: ___________________________

 

[END OF SIGNATURE PAGE FOR NOTICE OF STOCK OPTION GRANT]

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MODULAR MEDICAL, INC.

2017 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

               1.            Grant of Option. The Administrator of the Company
hereby grants to the participant named in the Notice of Stock Option Grant
(“Participant”), an option (the “Option”) to purchase the number of Shares set
forth in the Notice of Stock Option Grant, at the exercise price per Share set
forth in the Notice of Stock Option Grant (the “Exercise Price”), and subject to
the terms and conditions of this Stock Option Agreement, the Notice of Stock
Option Grant and the Plan, which is incorporated herein by reference. Subject to
Section 18 of the Plan, in the event of a conflict between the terms and
conditions of the Plan and this Stock Option Agreement, the terms and conditions
of the Plan shall prevail.

               If designated in the Notice of Stock Option Grant as an Incentive
Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock
Option as defined in Section 422 of the Code. Nevertheless, to the extent that
it exceeds the $100,000 rule of Code Section 422(d), this Option shall be
treated as a Nonstatutory Stock Option (“NSO”). Further, if for any reason this
Option (or portion thereof) shall not qualify as an ISO, then, to the extent of
such nonqualification, such Option (or portion thereof) shall be regarded as a
NSO granted under the Plan. In no event shall the Administrator, the Company or
any Parent or Subsidiary or any of their respective employees or directors have
any liability to Participant (or any other person) due to the failure of the
Option to qualify for any reason as an ISO.

               2.            Vesting Schedule. Except as provided in Section 3
below, the Option awarded by this Stock Option Agreement will vest in accordance
with the vesting provisions set forth in the Notice of Stock Option Grant.

               3.            Administrator Discretion. The Administrator, in its
discretion, may accelerate the vesting of the balance, or some lesser portion of
the balance, of the unvested Option at any time, subject to the terms of the
Plan. If so accelerated, such Option will be considered as having vested as of
the date specified by the Administrator.

               4.            Exercise of Option.

                              (a)                Right to Exercise. This Option
shall be exercisable during its term in accordance with the Vesting Schedule, if
any, set out in the Notice of Stock Option Grant and with the applicable
provisions of the Plan and this Stock Option Agreement.

                              (b)                Method of Exercise. This Option
shall be exercisable by delivery of an exercise notice in the form attached as
Exhibit A (the “Exercise Notice”) or in a manner and pursuant to such procedures
as the Administrator may determine, which shall state the election to exercise
the Option, the number of Shares with respect to which the Option is being
exercised (the “Exercised Shares”), and such other representations and
agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares, together with any applicable tax withholding. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by the aggregate Exercise Price, together with any
applicable tax withholding

                              No Shares shall be issued pursuant to the exercise
of an Option unless such issuance and such exercise comply with Applicable Laws.
Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to Participant on the date on which the Option is exercised with
respect to such Shares.

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               5.            Participant’s Representations. In the event the
Shares have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), at the time this Option is exercised, Participant shall,
if required by the Company, concurrently with the exercise of all or any portion
of this Option, deliver to the Company his or her Investment Representation
Statement in the form attached hereto as Exhibit B.

               6.            Lock-Up Period. Participant hereby agrees that
Participant shall not offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any Common Stock (or other securities) of the Company or
enter into any swap, hedging or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any Common
Stock (or other securities) of the Company held by Participant (other than those
included in the registration) for a period specified by the representative of
the underwriters of Common Stock (or other securities) of the Company not to
exceed one hundred and eighty (180) days following the effective date of any
registration statement of the Company filed under the Securities Act (or such
other period as may be requested by the Company or the underwriters to
accommodate regulatory restrictions on (i) the publication or other distribution
of research reports and (ii) analyst recommendations and opinions, including,
but not limited to, the restrictions contained in FINRA Rule 2711(f)(4) or NYSE
Rule 472(f)(4), or any successor provisions or amendments thereto).

                              Participant agrees to execute and deliver such
other agreements as may be reasonably requested by the Company or the
underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. In addition, if requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, Participant shall provide, within ten (10) days of such request, such
information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company’s
securities pursuant to a registration statement filed under the Securities Act.
The obligations described in this Section 4 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said one hundred and eighty (180) day (or
other) period. Participant agrees that any transferee of the Option or shares
acquired pursuant to the Option shall be bound by this Section 6.

               7.            Method of Payment. Subject to Section 7(b) of the
Plan, payment of the aggregate Exercise Price shall be by any of the following,
or a combination thereof, at the election of the Participant:

                              (a)                cash;

                              (b)               check;

                              (c)                cashless exercise; or

                              (d)               surrender of other Shares which
(i) shall be valued at its Fair Market Value on the date of exercise, and (ii)
must be owned free and clear of any liens, claims, encumbrances or security
interests, if accepting such Shares, in the sole discretion of the
Administrator, shall not result in any adverse accounting consequences to the
Company.

               8.            Restrictions on Exercise. This Option may not be
exercised until such time as the Plan has been approved by the stockholders of
the Company, or if the issuance of such Shares upon such exercise or the method
of payment of consideration for such Shares would constitute a violation of any
Applicable Laws.

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               9.            Non-Transferability of Option.

                              (a)                This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Participant only by
Participant. The terms of the Plan and this Stock Option Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of
Participant.

                              (b)                Further, until the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, or after the Administrator determines that it is, will, or may no
longer be relying upon the exemption from registration of Options under the
Exchange Act as set forth in Rule 12h-1(f) promulgated under the Exchange Act
(the “Reliance End Date”), Participant shall not transfer this Option or, prior
to exercise, the Shares subject to this Option, in any manner other than (i) to
persons who are “family members” (as defined in Rule 701(c)(3) of the Securities
Act) through gifts or domestic relations orders, or (ii) to an executor or
guardian of Participant upon the death or disability of Participant. Until the
Reliance End Date, the Options and, prior to exercise, the Shares subject to
this Option, may not be pledged, hypothecated or otherwise transferred or
disposed of, including by entering into any short position, any “put equivalent
position” or any “call equivalent position” (as defined in Rule 16a-1(h) and
Rule 16a-1(b) of the Exchange Act, respectively), other than as permitted in
clauses (i) and (ii) of this paragraph.

               10.          Term of Option. This Option may be exercised only
within the term set out in the Notice of Stock Option Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Stock Option Agreement.

               11.          Tax Obligations.

                              (a)                Tax Withholding. Participant
agrees to make appropriate arrangements with the Company (or the Parent or
Subsidiary employing or retaining Participant) for the satisfaction of all
Federal, state, local and foreign income and employment tax withholding
requirements applicable to the Option exercise. Participant acknowledges and
agrees that the Company may refuse to honor the exercise and refuse to deliver
the Shares if such withholding amounts are not delivered at the time of
exercise.

                              (b)                Notice of Disqualifying
Disposition of ISO Shares. If the Option granted to Participant herein is an
ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the date two (2)
years after the Date of Grant, or (ii) the date one (1) year after the date of
exercise, Participant shall immediately notify the Company in writing of such
disposition. Participant agrees that Participant may be subject to income tax
withholding by the Company on the compensation income recognized by Participant.

                              (c)                Code Section 409A. Under Code
Section 409A, an Option that vests after December 31, 2004 (or that vested on or
prior to such date but which was materially modified after October 3, 2004) that
was granted with a per Share exercise price that is determined by the Internal
Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on
the date of grant (a “discount option”) may be considered “deferred
compensation.” An Option that is a “discount option” may result in (i) income
recognition by Participant prior to the exercise of the Option, (ii) an
additional twenty percent (20%) federal income tax, and (iii) potential penalty
and interest charges. The “discount option” may also result in additional state
income, penalty and interest tax to the Participant. Participant acknowledges
that the Company cannot and has not guaranteed that the IRS will agree that the
per Share exercise price of this Option equals or exceeds the Fair Market Value
of a Share on the date of grant in a later examination. Participant agrees that
if the IRS determines that the Option was granted with a per Share exercise
price that was less than the Fair Market Value of a Share on the date of grant,
Participant shall be solely responsible for Participant’s costs related to such
a determination and in no event whatsoever shall the Company be liable for any
additional tax, interest or penalties that may be imposed on Participant by Code
Section 409A or any damages for failing to comply with Code Section 409A.

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               12.          Entire Agreement; Governing Law. The Plan is
incorporated herein by reference. The Plan, the Notice of Stock Option Grant and
this Stock Option Agreement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Participant with respect to the
subject matter hereof, and may not be modified adversely to the Participant’s
interest except by means of a writing signed by the Company and Participant.
This Stock Option Agreement and the Notice of Stock Option Grant is governed by
the internal substantive laws but not the choice of law rules of Nevada.

               13.          No Guarantee of Continued Service. PARTICIPANT
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
SCHEDULE SET FORTH IN THE NOTICE OF STOCK OPTION GRANT AND INCORPORATED HEREIN
IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY
(OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER.
PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NEITHER THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND/OR THE NOTICE OF STOCK OPTION GRANT
INCLUDING, WITHOUT LIMITATION, THE VESTING SCHEDULE SET FORTH THEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR
THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE
PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

               14.          Rights as Stockholder. Neither Participant nor any
person claiming under or through Participant will have any of the rights or
privileges of a stockholder of the Company in respect of any Shares deliverable
hereunder unless and until certificates representing such Shares will have been
issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to Participant. After such issuance, recordation and
delivery, Participant will have all the rights of a stockholder of the Company
with respect to voting such Shares and receipt of dividends and distributions on
such Shares.

               15.          Additional Conditions to Issuance of Stock. If at
any time the Company will determine, in its discretion, that the listing,
registration or qualification of the Shares upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory authority is necessary or desirable as a condition to the issuance of
Shares to Participant (or his or her estate), such issuance will not occur
unless and until such listing, registration, qualification, consent or approval
will have been effected or obtained free of any conditions not acceptable to the
Company. The Company will make all reasonable efforts to meet the requirements
of any such state or federal law or securities exchange and to obtain any such
consent or approval of any such governmental authority. Assuming such
compliance, for income tax purposes the Exercised Shares will be considered
transferred to Participant on the date the Option is exercised with respect to
such Exercised Shares.

               16.          Administrator Authority. The Administrator will have
the power to interpret the Plan and this Stock Option Agreement and to adopt
such rules for the administration, interpretation and application of the Plan as
are consistent therewith and to interpret or revoke any such rules (including,
but not limited to, the determination of whether or not any Shares subject to
the Option have vested). All actions taken and all interpretations and
determinations made by the Administrator in good faith will be final and binding
upon Participant, the Company and all other interested persons. No member of the
Administrator will be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this Stock Option
Agreement.

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               17.          Captions. Captions provided herein are for
convenience only and are not to serve as a basis for interpretation or
construction of this Stock Option Agreement.

               18.          Agreement Severable. In the event that any provision
in this Stock Option Agreement will be held invalid or unenforceable, such
provision will be severable from, and such invalidity or unenforceability will
not be construed to have any effect on, the remaining provisions of this Stock
Option Agreement.

               19.          Modifications to the Agreement. This Stock Option
Agreement constitutes the entire understanding of the parties on the subjects
covered. Participant expressly warrants that he or she is not accepting this
Stock Option Agreement in reliance on any promises, representations, or
inducements other than those contained herein. Modifications to this Stock
Option Agreement or the Plan can be made only in an express written contract
executed by a duly authorized officer of the Company. Notwithstanding anything
to the contrary in the Plan or this Stock Option Agreement, the Company reserves
the right to revise this Stock Option Agreement as it deems necessary or
advisable, in its sole discretion and without the consent of Participant, to
comply with Code Section 409A or to otherwise avoid imposition of any additional
tax or income recognition under Section 409A of the Code in connection to this
Option.

               20.          Amendment or Suspension of the Plan. Participant
understands that the Plan is discretionary in nature and may be amended,
suspended or terminated by the Company at any time.

               21.          Participant acknowledges receipt of a copy of the
Plan, this Stock Option Agreement and the Notice of Stock Option Grant and
represents that he or she is familiar with the terms and provisions of the Plan,
this Stock Option Agreement and the Notice of Stock Option Grant, and hereby
accepts this Option subject to all of the terms and provisions of this Stock
Option Agreement, the Notice of Stock Option Grant and the Plan. Participant has
reviewed the Plan, the Notice of Stock Option Grant and this Stock Option
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Stock Option Agreement and fully understands all
provisions of this Stock Option Agreement. Participant hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Stock Option
Agreement.

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EXHIBIT A

                

2017 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

 

Modular Medical, Inc.

Attention: Chief Executive Officer

               1.            Exercise of Option. Effective as of today,
________________, ____, the undersigned (“Participant”) hereby elects to
exercise Participant’s option (the “Option”) to purchase ________________ shares
of the Common Stock (the “Shares”) of Modular Medical, Inc. (the “Company”)
under and pursuant to the 2017 Equity Incentive Plan (the “Plan”) and the Stock
Option Agreement dated ______________, _____ (the “Option Agreement”).

               2.            Delivery of Payment. Participant is exercising the
Option for no cash consideration, as set forth in the Option Agreement.
Participant shall be responsible for the satisfaction of all Federal, state and
local income tax which may be applicable to the Option exercise.

               3.            Representations of Participant. Participant
acknowledges that Participant has received, read and understood the Plan and the
Option Agreement and agrees to abide by and be bound by their terms and
conditions.

               4.            Rights as Stockholder. Until the issuance of the
Shares (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
Common Stock subject to an Award, notwithstanding the exercise of the Option.
The Shares shall be issued to Participant as soon as practicable after the
Option is exercised in accordance with the Option Agreement. No adjustment shall
be made for a dividend or other right for which the record date is prior to the
date of issuance except as provided in Section __ of the Plan.

               5.            Company’s Right of First Refusal. Before any Shares
held by Participant or any transferee (either being sometimes referred to herein
as the “Holder”) may be sold or otherwise transferred (including transfer by
gift or operation of law), the Company or its assignee(s) shall have a right of
first refusal to purchase the Shares on the terms and conditions set forth in
this Section 5 (the “Right of First Refusal”).

                              (a)                Notice of Proposed Transfer.
The Holder of the Shares shall deliver to the Company a written notice (the
“Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise
transfer such Shares; (ii) the name of each proposed purchaser or other
transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred
to each Proposed Transferee; and (iv) the bona fide cash price or other
consideration for which the Holder proposes to transfer the Shares (the “Offered
Price”), and the Holder shall offer the Shares at the Offered Price to the
Company or its assignee(s).

                              (b)                Exercise of Right of First
Refusal. At any time within thirty (30) days after receipt of the Notice, the
Company and/or its assignee(s) may, by giving written notice to the Holder,
elect to purchase all, but not less than all, of the Shares proposed to be
transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with subsection (c) below.

                              (c)                Purchase Price. The purchase
price (“Purchase Price”) for the Shares purchased by the Company or its
assignee(s) under this Section 7 shall be the Offered Price. If the Offered
Price includes consideration other than cash, the cash equivalent value of the
non-cash consideration shall be determined by the Board of Directors of the
Company in good faith.

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                              (d)                Payment. Payment of the
Purchase Price shall be made, at the option of the Company or its assignee(s),
in cash (by check), by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company (or, in the case of repurchase by an
assignee, to the assignee), or by any combination thereof within thirty (30)
days after receipt of the Notice or in the manner and at the times set forth in
the Notice.

                              (e)                Holder’s Right to Transfer. If
all of the Shares proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company and/or its assignee(s) as provided
in this Section 7, then the Holder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided
that such sale or other transfer is consummated within one hundred and twenty
(120) days after the date of the Notice, that any such sale or other transfer is
effected in accordance with any applicable securities laws and that the Proposed
Transferee agrees in writing that the provisions of this Section 7 shall
continue to apply to the Shares in the hands of such Proposed Transferee. If the
Shares described in the Notice are not transferred to the Proposed Transferee
within such period, a new Notice shall be given to the Company, and the Company
and/or its assignees shall again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.

                              (f)                Exception for Certain Family
Transfers. Anything to the contrary contained in this Section 7 notwithstanding,
the transfer of any or all of the Shares during the Participant’s lifetime or on
the Participant’s death by will or intestacy to the Participant’s immediate
family or a trust for the benefit of the Participant’s immediate family shall be
exempt from the provisions of this Section 7. “Immediate Family” as used herein
shall mean spouse, lineal descendant or antecedent, father, mother, brother or
sister. In such case, the transferee or other recipient shall receive and hold
the Shares so transferred subject to the provisions of this Section 7, and there
shall be no further transfer of such Shares except in accordance with the terms
of this Section 7.

                              (g)                Termination of Right of First
Refusal. The Right of First Refusal shall terminate as to any Shares upon the
earlier of (i) the first sale of Common Stock of the Company to the general
public, or (ii) a Change in Control in which the successor corporation has
equity securities that are publicly traded.

               6.            Tax Consultation. Participant understands that
Participant may suffer adverse tax consequences as a result of Participant’s
purchase or disposition of the Shares. Participant represents that Participant
has consulted with any tax consultants Participant deems advisable in connection
with the purchase or disposition of the Shares and that Participant is not
relying on the Company for any tax advice.

               7.            Restrictive Legends and Stop-Transfer Orders.

                              (a)                Legends. Participant
understands and agrees that the Company shall cause the legends set forth below
or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S)
AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.

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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN
PUBLIC OFFERING OF THE COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN
THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD
WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.

                              (b)                Stop-Transfer Notices.
Participant agrees that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.

                              (c)                Refusal to Transfer. The
Company shall not be required (i) to transfer on its books any Shares that have
been sold or otherwise transferred in violation of any of the provisions of this
Exercise Notice or (ii) to treat as owner of such Shares or to accord the right
to vote or pay dividends to any purchaser or other transferee to whom such
Shares shall have been so transferred.

               8.            Successors and Assigns. The Company may assign any
of its rights under this Exercise Notice to single or multiple assignees, and
this Exercise Notice shall inure to the benefit of the successors and assigns of
the Company. Subject to the restrictions on transfer herein set forth, this
Exercise Notice shall be binding upon Participant and his or her heirs,
executors, administrators, successors and assigns.

               9.            Interpretation. Any dispute regarding the
interpretation of this Exercise Notice shall be submitted by Participant or by
the Company forthwith to the Administrator, which shall review such dispute at
its next regular meeting. The resolution of such a dispute by the Administrator
shall be final and binding on all parties.

               10.          Governing Law; Severability. This Exercise Notice is
governed by the internal substantive laws, but not the choice of law rules, of
the State of Nevada. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Exercise Notice shall continue in full force and effect.

               11.          Entire Agreement. The Plan and the Stock Option
Agreement are incorporated herein by reference. This Exercise Notice, the Plan,
the Option Agreement and the Investment Representation Statement constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Participant with respect to the subject matter hereof, and may not be
modified adversely to the Participant’s interest except by means of a writing
signed by the Company and Participant.

               This Option Agreement will be deemed to be signed by the
Participant upon the signing by the Participant of the Notice of Stock Option
Grant Notice to which it is attached.

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Submitted By:

 

_______________________________________

Participant

 

_______________________________________

Participant’s Printed Name

Accepted By:

 

MODULAR MEDICAL, INC.

 

By: ____________________________________________

               

 

Date Received: ___________________________________

               

A-4

 

EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT

PARTICIPANT                :         COMPANY :                MODULAR MEDICAL,
INC.       SECURITY : COMMON STOCK       AMOUNT : ___ SHARES       DATE :  

               In connection with the purchase of the above-listed Securities,
the undersigned Participant represents to the Company the following:

               (a)           Participant is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Securities. Participant is acquiring these Securities for investment for
Participant’s own account only and not with a view to, or for resale in
connection with, any “distribution” thereof within the meaning of the Securities
Act of 1933, as amended (the “Securities Act”).

               (b)           Participant acknowledges and understands that the
Securities constitute “restricted securities” under the Securities Act and have
not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Participant’s investment intent as expressed herein. In this
connection, Participant understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if Participant’s representation was predicated solely upon a present intention
to hold these Securities for the minimum capital gains period specified under
tax statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one (1) year or any other
fixed period in the future. Participant further understands that the Securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Participant
further acknowledges and understands that the Company is under no obligation to
register the Securities. Participant understands that the certificate evidencing
the Securities shall be imprinted with any legend required under applicable
state securities laws.

               (c)           Participant is familiar with the provisions of
Rule 701 and Rule 144, each promulgated under the Securities Act, which, in
substance, permit limited public resale of “restricted securities” acquired,
directly or indirectly from the issuer thereof, in a non-public offering subject
to the satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to Participant,
the exercise shall be exempt from registration under the Securities Act. In the
event the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or
such longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of the
applicable conditions specified by Rule 144, including in the case of affiliates
(1) the availability of certain public information about the Company, (2) the
amount of Securities being sold during any three (3) month period not exceeding
specified limitations, (3) the resale being made in an unsolicited “broker’s
transaction”, transactions directly with a “market maker” or “riskless principal
transactions” (as those terms are defined under the Securities Exchange Act of
1934) and (4) the timely filing of a Form 144, if applicable.

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                              In the event that the Company does not qualify
under Rule 701 at the time of grant of the Option, then the Securities may be
resold in certain limited circumstances subject to the provisions of Rule 144,
which may require (i) the availability of current public information about the
Company; (ii) the resale to occur more than a specified period after the
purchase and full payment (within the meaning of Rule 144) for the Securities;
and (iii) in the case of the sale of Securities by an affiliate, the
satisfaction of the conditions set forth in sections (2), (3) and (4) of the
paragraph immediately above.

               (d)           Participant further understands that in the event
all of the applicable requirements of Rule 701 or 144 are not satisfied,
registration under the Securities Act, compliance with Regulation A, or some
other registration exemption shall be required; and that, notwithstanding the
fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and
Exchange Commission has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rules 144 or 701 shall have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk. Participant understands that no
assurances can be given that any such other registration exemption shall be
available in such event.

  PARTICIPANT:   _________________________________________       Date:
____________________________________

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