**Exhibit10.4**

** **

**PROUROCARE INC.**

**AMENDED AND RETSTATED 2004 STOCK OPTION PLAN**

** **

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** **

### **FORM OFNOTICE OF STOCK OPTION GRANT**

### ** **

<Employee Name and Address>

 

**1.****            ****Basic Terms.**  You havebeen granted an option (“Option”) to purchase Common Stock, par value $0.00001per share (“Common Stock”) of ProUroCare Medical Inc. (“Company’) as follows:

 
| Date of  Grant                  |   | July 11,  2008 (“Grant Date”)                                                 |
|---------------------------------|--------|----------------------------------------------------------------------------------------------|
|                            |   |                                                                                         |
| Total Number of Shares Granted: |   |             (“Shares”) |
|                            |   |                                                                                         |
| Exercise  Price Per Share:      |   | $1.00  (“Exercise Price”)                                                          |
|                            |   |                                                                                         |
| Type of  Option:                |   | x   Incentive  Stock Option (“ISO”)                                 |
|                            |   | o     Non-Qualified Stock Option (“NQSO”)                           |
|                            |   |                                                                                         |
| Expiration  Date:               |   | July 11,  2015 (“Expiration Date”)                                            |

 

**2.****            ****Vesting.**  This Optionwill vest with respect to the granted Shares in accordance with the followingvesting schedule (“Vesting Schedule”):

 
| **Shares** | ** ** | **Vesting Date**   |
|------------|------------|--------------------|
|       |       |               |
|       |       | July 11, 2008 |
|       |       | July 1, 2009  |
|       |       | July 1, 2010  |
|       |       | July 1, 2011  |

 

**3.****            ****Exercise.**

 

**(a)           DuringEmployment/Consultancy.**  ThisOption may be exercised in whole or in part with respect to vested Shares atany time during your employment or consultancy, but in no event later than theExpiration Date.

 

**(b)           FollowingTermination of Employment/Consultancy.**  This Option may be exercised in whole or inpart with respect to Shares which are vested on the termination date of youremployment or consultancy (your “Termination Date”) for a period of 3 monthsafter your Termination Date (the “Post-Termination Exercise Period”), but in noevent later than the Expiration Date.  Inthe event of your termination is due to your disability or death, thePost-Termination Exercise Period will be increased to 12 months after yourTermination Date, but in no event later than the Expiration Date.

 

By executionof this Notice of Grant, you and the Company agree that this Option is grantedunder and governed by the terms and conditions of the Company’s Amended andRestated 2004 Stock Option Plan and the Stock Option Agreement, both of whichare attached hereto and made a part hereof.

 
| **OPTIONEE:** | ** ** | **PROUROCARE MEDICAL INC.** |
|---------------|------------|-----------------------------|
|          |       |                        |
|          |       |                        |
|          |       | By:                         |   |
| Signature     |       |                        |
|          |       |                        |
|          |       |                        |
| Print Name    |       | Print Name and Title        |

 

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**PROUROCARE MEDICAL INC.**

**AMENDED AND RESTATED 2004 STOCK OPTION PLAN**

 

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### **FORM OFSTOCK OPTION AGREEMENT**

### ** **

**1.****            ****Grant of Option.**

 

**(a)****          ****Grant.**  ProUroCareMedical Inc. (the “Company”) hereby grants from the Plan to the Optionee (the “Optionee”)named in the attached Notice of Grant (the “Notice of Grant”) an option (the “Option”)to purchase the total number of shares of Common Stock, par value $0.00001 pershare (the “Shares”), set forth in the Notice of Grant, at the exercise price(the “Exercise Price”) set forth in the Notice of Grant, subject to the terms,definitions, and provisions of the Amended and Restated 2004 Stock Option Plan(the “Plan”) adopted by the Company, which Plan is incorporated herein byreferences.  Unless otherwise definedherein, terms used herein with initial capital letters shall have the meaningsascribed to such terms in the Plan.  Inthe event of a conflict between the provisions of this Agreement and the Plan,the provisions of the Plan shall control.

 

**(b)****          ****Designation as ISO.**  If designatedin the Notice of Grant as an Incentive Stock Option (an “ISO”), this Option isintended to qualify as an Incentive Stock Option as defined in Section 422of the Internal Revenue Code of 1986, as amended (the “Code).  However, if this Option is intended to be anISO, to the extent that it exceeds the “$100,000 rule” of Code Section 422(d) itshall be treated as a Non-Qualified Stock Option (“NQSO”).

 

**2.****            ****Term of Option.** The term of this Option shall begin on the Grant Date set forth in theNotice of Grant and shall continue through, and include, the Expiration Dateset forth in the Notice of Grant (the “Term”). Notwithstanding the preceding sentence or anything in the Notice ofGrant to the contrary, if this Option is designated as an ISO, the ExpirationDate and the Term shall limited by the provisions of Section 6.5(d) ofthe Plan.

 

**3.****            ****Exercise of Option.**

 

**(a)****          ****Right to Exercise.**  This Optionshall be exercisable during the Term only in accordance with the terms of thePlan, this Agreement, and the Notice of Grant (including, without limitation,the Vesting Schedule and exercise terms set forth therein); provided, however,that this Option may not be exercised for a fraction of a Share.  In the event of Optionee’s death, disabilityor other termination of employment or consultancy, the exercisability of thisOption shall be further governed by the provisions of Section 9 of thisAgreement.  In no event may this Optionbe exercised after the Expiration Date set forth in the Notice of Grant.

 

**(b)****          ****Method of Exercise.**

 

**(1)**           ThisOption shall be exercisable by written notice (in the form attached as Exhibit A)which shall state Optionee’s election to exercise the Option, the number ofShares in respect of which the Option is being exercised, and such otherrepresentations and agreements as to Optionee’s investment intent with respectto such Shares may be required by the

 

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Company pursuant to theprovisions of the Plan.  Such writtennotice shall be signed by Optionee and shall be delivered in person, bycertified mail, or by overnight delivery service to the Secretary of theCompany.  The written notice shall beaccompanied by payment in full of the Exercise Price.  This Option shall be deemed to be exercisedupon receipt by the Company of such written notice accompanied by the ExercisePrice.

 

**(2)**           NoShares shall be issued pursuant to the exercise of an Option unless suchissuance and such exercise comply with all relevant provisions of law and therequirements of any stock exchange or national market system upon which theCommon Stock of the Company is then listed. Assuming such compliance, for income tax purposes the Shares shall beconsidered transferred to the Optionee on the date on which the Option isexercised with respect to such Shares.

 

**(c)****          ****Method of Payment**.  Payment ofthe Exercise Price shall be by any of the following, or a combination thereof,at the election of Optionee:

 

**(1)**           Cashor check;

 

**(2)**           Surrenderof other shares of Common Stock of the Company which (i) in the case ofshares acquired pursuant to the exercise of a Company option, have been ownedby Optionee for more than six (6) months on the date of surrender,and (ii) have a Fair Market Value on the date of surrender equal to the aggregateExercise Price of the Shares for which the Option is being exercised; or

 

**(3)**           Instructionsto the Company to withhold from the Shares issuable upon the exercise of theOption that number of Shares the Fair Market Value of which is equal to the aggregateExercise Price of the Shares for which the Option is being exercised (inclusiveof the Shares being withheld, which are treated for this purpose as beingexercised).

 

**4.****            ****Investment Representation.** In the event the Shares purchasable pursuant to the exercise of thisOption have not been registered under the Securities Act of 1933, as amended(the “Securities Act”), at the time this Option is exercised, Optionee shall,if required by the Company, concurrently with the exercise of all or anyportion of this Option, deliver to the Company his or her InvestmentRepresentation Statement in the form attached hereto as Exhibit B.

 

**5.****            ****Restrictions on Exercise**. This Option may not be exercised if the issuance of such Shares uponsuch exercise or the method of payment of consideration for such Shares wouldconstitute a violation of any applicable federal or state securities or otherlaw or regulation.  As a condition to theexercise of this Option, the Company may require Optionee to make anyrepresentation and warranty to the Company as may be required by any applicablelaw or regulation.

 

**6.****            ****Market Standoff Agreement.** Optionee hereby agrees that if so requested by the Company or anyrepresentative of the underwriters (the “Managing Underwriter”) in connectionwith any registration of the offering of any securities of the Company underthe Securities Act, Optionee shall not sell or otherwise transfer anyShares or other securities of the Company during the 180-day period (or suchlonger period as may be requested in writing by the Managing Underwriter andagreed to in writing by the Company) (the “Market Standoff Period”) followingthe effective date of a registration statement of the Company filed under theSecurities Act; provided,

 

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however, that suchrestriction shall apply only to the first registration statement of the Companyto become effective under the Securities Act that includes securities to besold on behalf of the Company to the public in an underwritten public offeringunder the Securities Act.  The Companymay impose stop-transfer instructions with respect to securities subject to theforegoing restrictions until the end of such Market Standoff Period.

 

**7.****            ****Rights of Optionee.** Optionee shall not have any of the rights of a shareholder with respectto the Shares covered by the Option except to the extent that one or morecertificates for such Shares shall have been delivered to Optionee upon thevalid exercise of all or any part of the Option.

 

**8.****            ****Non-Transferability ofOption.**

 

a.     **ISO.**Options designated as an ISO may only betransferred by will or by the laws of descent or distribution and may beexercised during the lifetime of Optionee only by Optionee.  Incentive Stock Options transferred (exceptas permitted in the preceding sentence) will continue to be outstanding forpurposes of the Plan but will thereafter be deemed to be a non-qualified stockoption.

 

b.     **Non-qualified stock options.** Options designated as a non-qualified stock option, may be transferredby the holder thereof only to such holder’s spouse, children, grandchildren orparents (collectively, the “Family Members”), to trusts for the benefit ofFamily Members, to partnerships or limited liability companies in which FamilyMembers are the only partners or shareholders, or to entities exempt fromfederal income taxation pursuant to Section 501(c)(3) of theCode.  During a participant’s lifetime, astock option may be exercised only by him or her, by his or her guardian orlegal representative or by the transferees permitted.

 

c.               **Successors.** The terms of this Option shall be binding upon the executors,administrators, heirs, successors and assigns of the Optionee.

 

**9.****            ****Termination of Relationship**.

 

**(a)****          ****In General.**  In the eventthat Optionee’s employment or consultancy with the Company terminates, Optionee(or, if Optionee is deceased, his or her estate or heirs) may exercise thisOption during the Post-Termination Exercise Period set forth in the Notice ofGrant, but only to the extent that this Option was vested and otherwiseexercisable by the Optionee on the date of such termination (the “TerminationDate”), and in no event after the Expiration Date of this Option.  To the extent that this Option was not vestedor otherwise exercisable on Optionee’s Termination Date, or if Optionee doesnot exercise all or any portion this Option within the Post-TerminationExercise Period, this Option shall terminate.

 

**(b)****          ****ISO Termination Provisions.**  Notwithstanding anything in Section 9(a) orthe Notice of Grant to the contrary, if this Option is designated as an ISO,then the Post-Termination Exercise Period shall be equal to a period of 3months after Optionee’s Termination Date, but in no event later than theExpiration Date; provided, however, that in the event Optionee’s termination ofemployment is due to Optionee’s disability or death, the Post-TerminationExercise Period will be increased to 12 months after Optionee’s TerminationDate, but in no event later than the Expiration Date.

 

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**10.****         ****No Right to Continued Relationship.** Optionee acknowledges and agrees that nothing in this Agreement or inthe Plan shall confer upon Optionee any right with respect to continuedemployment or consultancy with the Company, nor shall it interfere in any waywith Optionee’s right, or the Company’s right, to terminate Optionee’semployment or consultancy at any time, with or without cause.

 

**11.****         ****Tax Withholding or Collection.**

 

**(a)****          ****NQSO.**  If this Optionis treated as a NQSO, Optionee understands that he or she will be treated ashaving received compensation income (taxable at ordinary income tax rates) onthe date of exercise equal to the excess, if any, of the Fair Market Value ofthe Shares on the date of exercise over the Exercise Price.  If Optionee is an employee of the Company,the Company will be required to withhold from Optionee’s compensation orcollect from Optionee an amount equal to the applicable federal and statepayroll, income withholding, or other taxes required to be withheld and paidover to such taxing authorities (collectively, “Withholding Taxes”).  Optionee hereby consents to such withholdingor collection as a condition to the valid exercise of this Option.  If requested by the Company, Optionee agreesto promptly pay over to the Company all Withholding Taxes prior to and as acondition of the issuance to Optionee of a certificate represented the Sharesfor which this Option was exercised.

 

**(b)****          ****ISO.**  If this Optionis treated as an ISO, Optionee understands that he or she will not recognize ***regular*** compensationincome on the date of exercise.  However,the excess, if any, of the Fair Market Value of the Shares on the date ofexercise over the Exercise Price will be treated as an adjustment to alternativeminimum taxable income for federal tax purposes and may subject the Optionee tothe alternative minimum tax in the year of exercise.  The Company will not withhold anyamounts from Optionee’s compensation or collect any amounts from Optionee uponthe exercise of an ISO.

 

**12.****         ****Notice of Disqualifying Disposition of ISO Shares;Follow-Up Tax Withholding or Collection.**  If the Optiongranted to Optionee is an ISO, and if Optionee sells or otherwise disposes ofany of the Shares acquired pursuant to the ISO on or before the later of (i) thedate that is two years after the Date of Grant, or (ii) the date that isone year after the date of exercise, Optionee agrees to immediately notify theCompany in writing of such disposition. Optionee further understands and agrees that he or she may be subject toincome taxation at the time of such disposition, and that the Company may berequired to withhold from Optionee’s compensation or collect from Optionee anamount equal to the applicable Withholding Taxes.  Optionee hereby consents to such withholdingor collection.  If requested by theCompany, Optionee agrees to promptly pay over to the Company all WithholdingTaxes.

 

**13.****         ****Optionee Acknowledgements, Representations, andAgreements.**  Optionee acknowledges receipt of a copy ofthe Plan and represents that he is familiar with the terms and provisionsthereof, and hereby accepts this Option subject to all of the terms andprovisions thereof.  Optionee hasreviewed the Plan and this Option in their entirety, has had an opportunity toobtain the advice of counsel (including, without limitation, tax counsel) priorto executing this Option and fully understands all provisions of thisOption.  Optionee hereby agrees to acceptas binding, conclusive 

 

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and final all decisionsor interpretations of the Committee upon any questions arising under the Planor this Option.  Optionee further agreesto notify the Company upon any change in the residence address indicated below.

 

**14.****         ****Miscellaneous.**

 

**(a)****          ****Parties and Assignment. **This Agreement shall be binding upon the Optionee andthe Company and shall inure to their benefit and to the benefit of their heirs,successors and assigns.  This Agreementmay not be assigned by Optionee.  ThisAgreement may be assigned by the Company to an affiliate orsuccessor-in-interest.

 

**(b)****          ****Waiver.**  The Company’sdelay, waiver or failure to enforce any of the terms of this Agreement or anysimilar agreement in one instance shall not constitute a waiver of its rightshereunder with respect to other violations of this or any other agreement.

 

**(c)****          ****Severability.**  If anyprovision of this Agreement shall be held by any court of competentjurisdiction to be illegal, invalid or unenforceable and such illegality,invalidity or unenforceability shall have no effect upon and shall not impairthe enforceability of any other provision of this Agreement.

 

**(d)****          ****Third Party Beneficiary.** Nothing herein expressed or implied is intended to or shall be construedas conferring upon or giving to any person, firm or corporation other than theparties hereto any rights or benefits under or by reason of this Agreement.

 

**(e)****          ****Entire Agreement; Amendment.** This Agreement sets forth the parties’ final and entire agreement with respectto its subject matter and supersedes any and all prior understandings andagreements.  This Agreement shall not bemodified or amended in any fashion except by an instrument in writing signed bythe parties hereto.

 

**(f)****           ****Further Assurances.**  Each partyhereto agrees to execute such further papers, agreements, assignments ordocuments of title as may necessary or desirable to effect the purposes of thisAgreement and carry out its provisions.

 

**(g)****          ****Counterparts.**  This Agreementmay be executed in any number of counterparts, each of which shall be deemed anoriginal, but all of which shall be constitute but one in the same agreement.

 

**(h)****          ****Governing Law.**   ThisAgreement, in its interpretation and effect, shall be governed by the laws ofthe State of Minnesota applicable to contracts executed and to be performedtherein.  The venue for any actionhereunder shall be in the State of Minnesota, whether or not such venue is orsubsequently becomes inconvenient, and the parties consent to the jurisdictionof the courts of the State of Minnesota, and the U.S. District Court for theDistrict of Minnesota.

 

**INWITNESS WHEREOF,**the parties have executed this Agreement effective as of the 11th day of July,2008.

 

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|   | **PROUROCARE  MEDICAL INC.** |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | By:                          |   |
|   |                         |   |
|   | Name:                        |   |
|   |                         |   |
|   | Title:                       |   |

 

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**PROUROCARE MEDICAL INC.**

**AMENDED AND RESTATED 2004 STOCK OPTION PLAN**

 

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### **STOCKOPTION AGREEMENT**

### ** **

# **OPTIONEE SIGNATURE PAGE**

# ** **

 
|   | Signature:           |   |
|--------|----------------------|--------|
|   |                 |   |
|   | Print  Name:         |   |
|   |                 |
|   | Residence  Address:  |
|   |                 |
|   |                 |
|   | Social Security No.: |   |
|        |                      |        |  |

 

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** **

**Exhibit A**

 

**PROUROCAREMEDICAL INC.**

**AMENDED AND RESTATED 2004 STOCK OPTION PLAN**

### ** **

### **EXERCISENOTICE**

### ** **

ProUroCare Medical Inc.

5500 Wayzata Boulevard, Suite 310

Golden Valley, MN 55416

Attention:  Chief Financial Officer

 

**1.****            ****Exercise of Option**. Effective as of today,                        *[enter today’s date]*, theundersigned (“Optionee”) hereby elects to exercise Optionee’s option to purchase                  shares of the Common Stock (the “Shares”) of ProUroCare Medical Inc. (the “Company”)under and pursuant to the Company’s Amended and Restated 2004 Stock OptionPlan, as amended (the “Plan”) and the Stock Option Agreement dated as of                                    (the “Stock Option Agreement”).

 

**2.****            ****Representations of Optionee**. Optionee acknowledges that Optionee has received, read and understoodthe Plan and the Stock Option Agreement and agrees to abide by and be bound bytheir terms and conditions.

 

**3.****            ****Rights as Shareholder.** Until the stock certificate evidencing such Shares is issued (asevidenced by the appropriate entry on the books of the Company or of a dulyauthorized transfer agent of the Company), no right to vote or receivedividends or any other rights as a shareholder shall exist with respect to theShares, notwithstanding the exercise of the Option.  The Company shall issue (or cause to beissued) such stock certificate promptly after the Option is exercised, subjectto Optionee’s compliance with all provisions of the Plan and Stock OptionAgreement.  No adjustment will be madefor a dividend or other right for which the record date is prior to the datethe stock certificate is issued.

 

**4.****            ****Tax Consultation**. Optionee understands that Optionee may suffer adverse tax consequencesas a result of Optionee’s purchase or disposition of the Shares.  Optionee represents that Optionee hasconsulted with any tax consultants Optionee deems advisable in connection withthe purchase or disposition of the Shares and that Optionee is not relying onthe Company for any tax advice.

 

**5.****            ****Restrictive Legend and Stop-TransferOrders**.

 

**(a)****          ****Legend.**  Optioneeunderstands and agrees that the Company shall cause the legend set forth belowor a legend substantially equivalent thereto, to be placed upon any certificate(s) evidencingownership of the Shares together with any other legends that may be required bystate or federal securities laws at the time of the issuance of the Shares:

 

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THE SHARES REPRESENTEDHEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR THE ISSUEROF THE SHARES (THE “ISSUER”) HAS RECEIVED AN OPINION OF COUNSEL IN FORM ANDSUBSTANCE SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGEOR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT.

 

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

 

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

 

**6.****            ****Successors and Assigns**. The Company may assign any of its rights under this Agreement to singleor multiple assignees, and this Agreement shall inure to the benefit of, and bebinding upon, the successors and assigns of the Company.  This Agreement shall also be binding upon,and inure to the benefit of, Optionee and his or her heirs, executors,successors and assigns.

 

**7.****            ****Interpretation**. Any dispute regarding the interpretation of this Agreement shall besubmitted by Optionee or by the Company forthwith to the Committee, which shallreview such dispute at its next regular meeting.  The resolution of such a dispute by theCommittee shall be final and binding on the Company and on Optionee.

 

**8.****            ****Governing Law; Severability**. This Agreement shall be governed by and construed in accordance with thelaws of the State of Minnesota.  Shouldany provision of this Agreement be determined by a court of law to be illegalor unenforceable, the other provisions shall nevertheless remain effective andshall remain enforceable.

 

**9.****            ****Notices**. Any notice required or permitted hereunder shall be in writing and shallbe deemed to have been duly given if (i) delivered by hand, (ii) sentby telecopy, (iii) delivered to an overnight courier with guaranteed nextday delivery, or (iv) mailed by certified mail, postage prepaid, returnreceipt requested, and addressed (or sent, in the case of a telecopy) asfollows:

 
| To the Company:  |   | at the address shown on  the first page hereof                                      |
|------------------|--------|------------------------------------------------------------------------------------------|
|             |   |                                                                                     |
| To the Optionee: |   | at the address shown  beneath the Optionee’s signature on the last page hereof |

 

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or to such other personand/or place as the parties hereto shall furnish in writing to each other.  Notices shall be deemed effectively given (i) onthe day delivered, if delivered by hand, (ii) on the day sent, if sent bytelecopy, (iii) on the day deposited with an overnight courier withguaranteed overnight delivery, or (iv) on the day deposited in the U.S.mail, if sent by certified mail.

 

**10.****         ****Further Instruments**.  The partiesagree to execute such further instruments and to take such further action asmay be reasonably necessary to carry out the purposes and intent of thisAgreement.

 

**11.****         ****Delivery of Payment**.  Optioneeherewith delivers to the Company the full Exercise Price for the Shares,together with all federal and state payroll, income withholding, and othertaxes required by the Company to be collected from Optionee.

 

**12.****         ****Entire Agreement**.  The Plan, theNotice of Grant, and the Stock Option Agreement are incorporated herein byreference.  This Agreement, the Plan, theNotice of Grant, the Stock Option Agreement and the Investment RepresentationStatement (if applicable) constitute the entire agreement of the parties andsupersede in their entirety all prior undertakings and agreements of theCompany and Optionee with respect to the subject matter hereof.

 
|   | **OPTIONEE:**   |
|--------|-----------------|
|   | ** **      |
|   |            |
|   | *[signature]*   |
|   |            |
|   |            |
|   | *[Print  Name]* |
|   |            |
|   | Address:        |
|   |            |
|   |            |
|   |            |
|   |            |

 

 

**ACCEPTED:**

 
| **PROUROCARE  MEDICAL INC.** |                 |
|------------------------------|----------------------|
|                         |                 |
|                         |                 |
| By:                          |                 |   |
|                         |                 |   |
|                         |                 |   |
|                         | Print Name and Title |   |

 

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** **

**Exhibit B**

 

**INVESTMENTREPRESENTATION STATEMENT**

 
| **Optionee:**          |                    |   |
|------------------------|-------------------------|--------|
|                   |                    |   |
| **Company:**           | ProUroCare Medical Inc. |   |
|                   |                    |   |
| **Type  of Security:** | Common Stock            |   |
|                   |                    |   |
| **Number  of Shares:** |                    |   |
|                   |                    |   |
| **Date:**              |                    |   |

 

In connection with the purchase of the above-listedSecurities, the undersigned Optionee represents to the Company the following:

 

(a)           Optionee is aware of the Company’sbusiness affairs and financial condition and has acquired sufficientinformation about the Company to reach an informed and knowledgeable decisionto acquire the Securities.  Optionee isacquiring these Securities for investment for Optionee’s own account only andnot 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 “SecuritiesAct”).

 

(b)           Optionee acknowledges and understandsthat the Securities constitute “restricted securities” under the Securities Actand have not been registered under the Securities Act in reliance upon aspecific exemption therefrom, which exemption depends upon, among other things,the bona fide nature of Optionee’s investment intent as expressed herein.  In this connection, Optionee understandsthat, in the view of the Securities and Exchange Commission, the statutorybasis for such exemption may be unavailable if Optionee’s representation waspredicated solely upon a present intention to hold these Securities for theminimum 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, orfor a period of one year or any other fixed period in the future.  Optionee further understands that theSecurities must be held indefinitely unless they are subsequently registeredunder the Securities Act or an exemption from such registration isavailable.  Optionee further acknowledgesand understands that the Company is under no obligation to register theSecurities.  Optionee understands thatthe certificate evidencing the Securities will be imprinted with a legend whichprohibits the transfer of the Securities unless they are registered or suchregistration is not required in the opinion of counsel satisfactory to theCompany and any other legend required under then applicable state or federalsecurities laws.

 

(c)           Optionee is familiar with theprovisions of Rule 701 and Rule 144, each promulgated under theSecurities Act, which, in substance, permit limited public resale of “restrictedsecurities” acquired, directly or indirectly from the issuer thereof, in anon-public offering subject to the satisfaction of certain conditions.  Rule 701 provides that if the issuer

 

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qualifies under Rule 701at the time of the grant of the Option to the Optionee, the exercise will beexempt from registration under the Securities Act.  In the event the Company becomes subject tothe reporting requirements of Section 13 or 15(d) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”) ninety (90) daysthereafter (or such longer period as any market stand-off agreement may require)the Securities exempt under Rule 701 may be resold, subject to thesatisfaction of certain of the conditions specified by Rule 144,including:  (i) the resale beingmade through a broker in an unsolicited “broker’s transaction” or intransactions directly with a market maker (as said term is defined underthe Exchange Act); and, in the case of an affiliate, (ii) the availabilityof certain public information about the Company, (iii) the amount ofSecurities being sold during any three month period not exceeding thelimitations specified in Rule 144(e), and (iv) the timely filing of aForm 144, if applicable.

 

(d)           In the event that the Company doesnot qualify under Rule 701 at the time of grant of the Option, then theSecurities may be resold in certain limited circumstances subject to theprovisions of Rule 144, which requires the resale to occur not lessthan two years after the later of the date the Securities were sold by theCompany or the date the Securities were sold by an affiliate of the Company,within the meaning of Rule 144; and, in the case of acquisition of theSecurities by an affiliate, or by a non-affiliate who subsequently holds theSecurities less than three years, the satisfaction of the conditions set forthin clauses (1), (2), (3) and (4) of Paragraph (c), above.

 

(e)           Optionee further understands that inthe event all of the applicable requirements of Rule 701 or 144 are notsatisfied, registration under the Securities Act, compliance with Regulation Aunder the Securities Act, or some other registration exemption will berequired; and that, notwithstanding the fact that Rules 144 and 701 arenot exclusive, the Staff of the Securities and Exchange Commission hasexpressed its opinion that persons proposing to sell private placement securitiesother than in a registered offering and otherwise than pursuant to Rules 144or 701 will have a substantial burden of proof in establishing that anexemption from registration is available for such offers or sales, and thatsuch persons and their respective brokers who participate in such transactionsdo so at their own risk.  Optioneeunderstands that no assurances can be given that any such other registrationexemption will be available in such event.

 
|   | Signature of Optionee: |
|--------|------------------------|
|   |                   |
|   |                   |
|   |                   |
|   |                   |
|   | Print Name             |
|   |                   |
|   | Date:                  |   |

 

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