exv10w6



 









Exhibit 10.6






Agreement No.2005/04




NITROSECURITY, INC.




Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan




1. Grant of Option.




     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Terry B. Christensen, an employee of the
Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided
herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 234,364 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February
20, 2015 (the “Final Exercise Date”).



     It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term
“Participant,” as used in this option, shall be deemed to include any person who acquires the right
to exercise this option validly under its terms.



2. Vesting Schedule.




     This option shall be exercisable (“vested”) as to 84,364 Shares immediately, and shall become
exercisable as to (i) an additional 25,000 Shares on April 15, 2005 and (ii) an additional
41662/3 Shares on each one-month anniversary of April 15, 2005 until October
15, 2007.



     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.



3. Exercise of Option.




     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this option may
be for any fractional share or for fewer than ten whole shares.



     (b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).



     (c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the



 









 







right to exercise this option shall terminate three months after such cessation (but in no
event after the Final Exercise Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise this option on the
date of such cessation. If the Participant ceases to be an Eligible Participant prior to October
15, 2012, during the thirty-day period following such cessation, the Participant may elect to
convert this option, to the extent exercisable, to a nonstatutory stock option, and the Shares
underlying such nonstatutory stock option shall remain exercisable until October 15, 2012.
Notwithstanding the foregoing, if the Participant violates the non-competition or confidentiality
provisions of any employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this option, or any
nonstatutory option into which is has been converted, shall terminate immediately upon written
notice to the Participant from the Company describing such violation.



     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.



     (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction
of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft,
fraud or falsification of any employment or Company records in any material way, (iii) the
Participant’s failure or inability to perform any material reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or
(iv) material breach by the Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the Participant and the Company,
which breach is not cured within ten (10) days following written notice of such breach. The
Participant shall be considered to have been discharged for “Cause” if the Company determines,
within 30 days after the Participant’s resignation, that discharge for cause was warranted.



4. Acceleration of Options.




     This option shall vest in full immediately upon (i) the termination of the Participant’s
employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).



     A “Change in Control Event” shall mean the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following two conditions



2









 







is satisfied: (x) all or substantially all of the individuals and entities who were the
beneficial owners of the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) and the then-outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting Securities”) immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or
by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior to the Business
Combination).



5. Agreement in Connection with Public Offering.




     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.



6. Tax Matters.




     (a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.



     (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the Company in writing
of such disposition.



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7. Nontransferability of Option.




     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.



8. Provisions of the Plan.




     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.



     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.



	 	 	 	 	 
	 	NITROSECURITY, INC.

 	 
	 	By:  	/s/ Lisa J. Duquette
 	 
	 	 	Lisa J. Duquette 	 
	 	 	Vice President of Finance & Administration 	 
	 




4









 








PARTICIPANT’S ACCEPTANCE





     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock
Incentive Plan.



	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Terry B. Christensen
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	P.O. Box 962
	 

	 	 	 	Wolfeboro, NH 03894






 









 






NOTICE OF STOCK OPTION EXERCISE




Date:
_________




NitroSecurity, Inc.

230 Commerce Way

Suite 325

Portsmouth, NH 03801



Attention: Treasurer



Dear Sir or Madam:




     I am the holder of an Incentive Stock Option granted to me under the NitroSecurity, Inc. (the
“Company”) 2005 Stock Incentive Plan on
______ for the purchase of
______ shares of Common
Stock of the Company at a purchase price of $  per share.



     I
hereby exercise my option to purchase ______ shares of Common Stock (the “Shares”), for
which I have enclosed [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:



	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 





     I represent, warrant and covenant as follows:



     1. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.



     2. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.



     3. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.



     4. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.



 









 





     5. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares
cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under
the Securities Act or an exemption from registration is then available; (iii) in any event, the
exemption from registration under Rule 144 will not be available for at least one year and even
then will not be available unless a public market then exists for the Common Stock, adequate
information concerning the Company is then available to the public, and other terms and conditions
of Rule 144 are complied with; and (iv) there is now no registration statement on file with the
Securities and Exchange Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register the Shares under the Securities Act.


Very truly yours,



 




(Signature)





 









 








Agreement No. 2005/05




NITROSECURITY, INC.




Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan




1. Grant of Option.




     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Terry B. Christensen, an employee of the
Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided
herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 900,000 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February
20, 2015 (the “Final Exercise Date”).



     It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term
“Participant,” as used in this option, shall be deemed to include any person who acquires the right
to exercise this option validly under its terms.



2. Vesting Schedule.




     This option shall become exercisable (“vest”) as to 1/36 of the original
number of Shares on each one-month anniversary of the Grant Date until the three-year anniversary
of the Grant Date.



     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.



3. Exercise of Option.




     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this option may
be for any fractional share or for fewer than ten whole shares.



     (b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).



     (c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the



 









 







right to exercise this option shall terminate three months after such cessation (but in no
event after the Final Exercise Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise this option on the
date of such cessation. During such three-month period, the Participant may elect to convert this
option, to the extent exercisable, to a nonstatutory stock option, and the Shares underlying such
nonstatutory stock option shall remain exercisable until February 21, 2018. Notwithstanding the
foregoing, if the Participant violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other agreement between the
Participant and the Company, the right to exercise this option, or any nonstatutory option into
which is has been converted, shall terminate immediately upon written notice to the Participant
from the Company describing such violation.



     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.



     (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction
of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft,
fraud or falsification of any employment or Company records in any material way, (iii) the
Participant’s failure or inability to perform any material reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or
(iv) material breach by the Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the Participant and the Company,
which breach is not cured within ten (10) days following written notice of such breach. The
Participant shall be considered to have been discharged for “cause” if the Company determines,
within 30 days after the Participant’s resignation, that discharge for cause was warranted.



4. Acceleration of Options.




     This option shall vest in full immediately upon (i) the termination of the Participant’s
employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).



     A “Change in Control Event” shall mean the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following two conditions is
satisfied: (x) all or substantially all of the individuals and entities who were the beneficial



2









 







owners of the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) and the then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”) immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or
by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior to the Business
Combination).



5. Agreement in Connection with Public Offering.




     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.



6. Tax Matters.




     (a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.



     (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the Company in writing
of such disposition.



7. Nontransferability of Option.




     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent



3









 







and distribution, and, during the lifetime of the Participant, this option shall be
exercisable only by the Participant.



8. Provisions of the Plan.




     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.



     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.



	 	 	 	 	 
	 	NITROSECURITY, INC.

 	 
	 	By:  	/s/ Lisa J. Duquette
 	 
	 	 	Lisa J. Duquette 	 
	 	 	Vice President of Finance & Administration 	 
	 




4









 








PARTICIPANT’S ACCEPTANCE





     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock
Incentive Plan.



	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Terry B. Christensen
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	P.O. Box 962
	 

	 	 	 	Wolfeboro, NH 03894






 









 






NOTICE OF STOCK OPTION EXERCISE




Date:                     

NitroSecurity, Inc.

230 Commerce Way

Suite 325

Portsmouth, NH 03801



Attention: Treasurer



Dear Sir or Madam:




     I am the holder of an Incentive Stock Option granted to me under the NitroSecurity, Inc. (the
“Company”) 2005 Stock Incentive Plan on
______ for the purchase of
______ shares of Common
Stock of the Company at a purchase price of $  per share.



     I
hereby exercise my option to purchase ______ shares of Common Stock (the “Shares”), for
which I have enclosed [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:



	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 





     I represent, warrant and covenant as follows:



     6. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.



     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.



     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.



     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.



     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the



 









 







Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then available; (iii) in
any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.


Very truly yours,



 




(Signature)





 









 








Agreement 2005/16




NITROSECURITY, INC.




Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan




1. Grant of Option.




     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Seth McClead, an employee of the Company
(the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein
and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 100,000 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February
20, 2015 (the “Final Exercise Date”).



     It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term
“Participant,” as used in this option, shall be deemed to include any person who acquires the right
to exercise this option validly under its terms.



2. Vesting Schedule.




     This option shall become exercisable (“vest”) as to 1/6 of the original
number of Shares on July 3, 2005, and as to an additional 1/36 of the
original number of Shares on each one-month anniversary of July 3, 2005 until the thirty-month
anniversary of July 3, 2005.



     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.



3. Exercise of Option.




     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this option may
be for any fractional share or for fewer than ten whole shares.



     (b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).



     (c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the



 









 







right to exercise this option shall terminate three months after such cessation (but in no
event after the Final Exercise Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise this option on the
date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any employment
contract, confidentiality and nondisclosure agreement or other agreement between the Participant
and the Company, the right to exercise this option shall terminate immediately upon written notice
to the Participant from the Company describing such violation.



     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.



     (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean willful
misconduct by the Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar
agreement between the Participant and the Company), as determined by the Company, which
determination shall be conclusive. The Participant shall be considered to have been discharged for
“Cause” if the Company determines, within 30 days after the Participant’s resignation, that
discharge for cause was warranted.



4. Acceleration of Options.




     This option shall vest in full immediately upon (i) the closing of an initial underwritten
public offering of the Company’s securities pursuant to a registration statement under the
Securities Act of 1933, as amended, or (ii) a Change in Control Event (as defined below).



     A “Change in Control Event” shall mean:



     (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change in Control Event: (A) any



 









 







acquisition directly from the Company, or (B) any acquisition by any corporation pursuant to a
Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (b)
of this definition; or



     (b) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote generally in the election
of directors, respectively, of the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination and (y) no Person (excluding any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent that such ownership
existed prior to the Business Combination).



5. Agreement in Connection with Public Offering.




     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.



6. Tax Matters.




     (a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.



     (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were



 









 







acquired pursuant to exercise of this option, the Participant shall notify the Company in
writing of such disposition.



7. Nontransferability of Option.




     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.



8. Provisions of the Plan.




     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.



     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.



	 	 	 	 	 
	 	NITROSECURITY, INC.

 	 
	Dated: 4/1/2005 	By:  	/s/ Terry B. Christensen
 	 
	 	 	Terry B. Christensen 	 
	 	 	President and Chief Executive Officer 	 
	 




 









 








PARTICIPANT’S ACCEPTANCE





     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock
Incentive Plan.



	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Seth McClead
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	35 Cricket Brook
	 

	 	 	 	Dover, NH 03820






 









 






NOTICE OF STOCK OPTION EXERCISE




Date:                     

NitroSecurity, Inc.

230 Commerce Way

Suite 325

Portsmouth, NH 03801



Attention: Treasurer



Dear Sir or Madam:




     I am the holder of an Incentive Stock Option granted to me under the NitroSecurity, Inc. (the
“Company”) 2005 Stock Incentive Plan on
______ for the purchase of ______ shares of Common
Stock of the Company at a purchase price of $  per share.



     I
hereby exercise my option to purchase ______ shares of Common Stock (the “Shares”), for
which I have enclosed [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:



	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 





     I represent, warrant and covenant as follows:



     7. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.



     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.



     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.



     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.



     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the



 









 







Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then available; (iii) in
any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.


Very truly yours,



 




(Signature)





 









 








Agreement No. 2005/38




NITROSECURITY, INC.




Nonstatutory Stock Option Agreement

Granted Under 2005 Stock Incentive Plan




1. Grant of Option.




     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Kenneth Levine (the “Participant”) of an
option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2005
Stock Incentive Plan (the “Plan”), a total of 580,000 shares (the “Shares”) of common stock, $0.01
par value per share, of the Company (“Common Stock”) at $0.15 per Share. Unless earlier
terminated, this option shall expire at 5:00 p.m., Eastern time, on February 21, 2015 (the “Final
Exercise Date”).



     It is intended that the option evidenced by this agreement shall not be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the
term “Participant,” as used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.



2. Vesting Schedule.




     This option shall become exercisable (“vest”) as to 1/24 of the original
number of Shares on each one-month anniversary of the Grant Date until the two-year anniversary of
the Grant Date.



     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.



3. Exercise of Option.




     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.



     (b) Termination for Cause. If the Participant, prior to the Final Exercise Date,
violates the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the Participant and the
Company, the right to exercise this option shall terminate immediately upon written notice to the
Participant from the Company describing such violation.



     (c) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date



 









 







and the Company has not terminated such relationship as specified in paragraph (b) above, this
option shall be exercisable, within the period of one year following the date of death or
disability of the Participant, by the Participant (or in the case of death by an authorized
transferee), provided that this option shall be exercisable only to the extent that this
option was exercisable by the Participant on the date of his or her death or disability, and
further provided that this option shall not be exercisable after the Final Exercise
Date.



4. Acceleration of Options.




     This option shall vest in full immediately upon (i) the closing of an initial underwritten
public offering of the Company’s securities pursuant to a registration statement under the
Securities Act of 1933, as amended, or (ii) a Change in Control Event (as defined below).



     A “Change in Control Event” shall mean:



     (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly
from the Company, or (B) any acquisition by any corporation pursuant to a Business Combination (as
defined below) which complies with clauses (x) and (y) of subsection (b) of this definition; or



     (b) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote generally in the election
of directors, respectively, of the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination and (y) no Person (excluding any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities of such corporation
entitled to vote



2









 







generally in the election of directors (except to the extent that such ownership existed prior
to the Business Combination).



5. Agreement in Connection with Public Offering.




     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.



6. Withholding.




     No Shares will be issued pursuant to the exercise of this option unless and until the
Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any
federal, state or local withholding taxes required by law to be withheld in respect of this option.



7. Nontransferability of Option.




     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.



8. Provisions of the Plan.




     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.



     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.



	 	 	 	 	 
	 	NITROSECURITY, INC.

 	 
	Dated: 4/1/2005 	By:  	/s/ Terry B. Christensen
 	 
	 	 	Terry B. Christensen 	 
	 	 	President and Chief Executive Officer 	 
	 




 









 






Agreement
No. 2005/05


PARTICIPANT’S ACCEPTANCE





     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock
Incentive Plan.



	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Kenneth Levine
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	36 Bellevue Street
	 

	 	 	 	Wellesley, MA 02481






 









 






NOTICE OF STOCK OPTION EXERCISE




Date:                     

NitroSecurity, Inc.

230 Commerce Way

Suite 325

Portsmouth, NH 03801



Attention: Treasurer



Dear Sir or Madam:




     I am the holder of a Nonstatutory Stock Option granted to me under the NitroSecurity, Inc.
(the “Company”) 2005 Stock Incentive Plan on
______ for the purchase of
______ shares of
Common Stock of the Company at a purchase price of $  per share.



     I
hereby exercise my option to purchase ______ shares of Common Stock (the “Shares”), for
which I have enclosed [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:



	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 





     I represent, warrant and covenant as follows:



     8. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act.



     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.



     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.



     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.



     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares
cannot be sold, transferred or otherwise disposed of unless they are subsequently



2









 







registered under the Securities Act or an exemption from registration is then available; (iii)
in any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.


Very truly yours,



 




(Signature)




3









 








Agreement No. 2005/70




NITROSECURITY, INC.




Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan




1. Grant of Option.




     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on July 1, 2005 (the “Grant Date”) to Terry B. Christensen, an employee of the Company
(the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein
and in the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 1,050,000 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on June 30,
2015 (the “Final Exercise Date”).



     It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term
“Participant,” as used in this option, shall be deemed to include any person who acquires the right
to exercise this option validly under its terms.



2. Vesting Schedule.




     This option shall become exercisable (“vest”) as to 1/36 of the original
number of Shares on each one-month anniversary of the Grant Date until the three-year anniversary
of the Grant Date.



     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.



3. Exercise of Option.




     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this option may
be for any fractional share or for fewer than ten whole shares.



     (b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).



     (c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the



4









 







right to exercise this option shall terminate three months after such cessation (but in no
event after the Final Exercise Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise this option on the
date of such cessation. During such three-month period, the Participant may elect to convert this
option, to the extent exercisable, to a nonstatutory stock option, and the Shares underlying such
nonstatutory stock option shall remain exercisable until February 21, 2018. Notwithstanding the
foregoing, if the Participant violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other agreement between the
Participant and the Company, the right to exercise this option, or any nonstatutory option into
which is has been converted, shall terminate immediately upon written notice to the Participant
from the Company describing such violation.



     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.



     (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction
of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft,
fraud or falsification of any employment or Company records in any material way, (iii) the
Participant’s failure or inability to perform any material reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or
(iv) material breach by the Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the Participant and the Company,
which breach is not cured within ten (10) days following written notice of such breach. The
Participant shall be considered to have been discharged for “cause” if the Company determines,
within 30 days after the Participant’s resignation, that discharge for cause was warranted.



4. Acceleration of Options.




     This option shall vest in full immediately upon (i) the termination of the Participant’s
employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).



     A “Change in Control Event” shall mean the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following two conditions is
satisfied: (x) all or substantially all of the individuals and entities who were the beneficial



5









 







owners of the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) and the then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”) immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or
by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior to the Business
Combination).



5. Agreement in Connection with Public Offering.




     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.



6. Tax Matters.




     (a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.



     (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the Company in writing
of such disposition.



7. Nontransferability of Option.




     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent



6









 







and distribution, and, during the lifetime of the Participant, this option shall be
exercisable only by the Participant.



8. Provisions of the Plan.




     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.



     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.



	 	 	 	 	 
	 	NITROSECURITY, INC.

 	 
	 	By:  	/s/ Lisa J. Duquette
 	 
	 	 	Lisa J. Duquette 	 
	 	 	Vice President of Finance & Administration 	 
	 




7









 








PARTICIPANT’S ACCEPTANCE





     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock
Incentive Plan.



	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Terry B. Christensen
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	7 Sinclair Drive
	 

	 	 	 	Exeter, NH 03833






 









 






NOTICE OF STOCK OPTION EXERCISE




Date:                     

NitroSecurity, Inc.

230 Commerce Way

Suite 325

Portsmouth, NH 03801



Attention: Treasurer



Dear Sir or Madam:




     I am the holder of an Incentive Stock Option granted to me under the NitroSecurity, Inc. (the
“Company”) 2005 Stock Incentive Plan on
______ for the purchase of
______ shares of Common
Stock of the Company at a purchase price of $  per share.



     I
hereby exercise my option to purchase ______ shares of Common Stock (the “Shares”), for
which I have enclosed [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:



	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 





     I represent, warrant and covenant as follows:



     9. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.



     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.



     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.



     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.



     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the



 









 







Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then available; (iii) in
any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.


Very truly yours,



 




     (Signature)




 









 





Agreement No. 2005/09




NITROSECURITY, INC.




Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan




1.     Grant of Option.




     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Salo Fajer, an employee of the Company (the
“Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in
the Company’s 2005 Stock Incentive Plan (the “Plan”), a total of 70,000 shares (the “Shares”) of
common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per Share.
Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February 20,
2015 (the “Final Exercise Date”).



     It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term
“Participant,” as used in this option, shall be deemed to include any person who acquires the right
to exercise this option validly under its terms.



2.     Vesting Schedule.




     This option shall become exercisable (“vest”) as to 1/6 of the original
number of Shares on May 1, 2005, and as to an additional 1/36 of the original
number of Shares on each one-month anniversary of May 1, 2005 until the thirty-month anniversary of
May 1, 2005.



     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.



3.     Exercise of Option.




     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this option may
be for any fractional share or for fewer than ten whole shares.



     (b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).



     (c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the



 









 




right to exercise this option shall terminate three months after such cessation (but in no
event after the Final Exercise Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise this option on the
date of such cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any employment
contract, confidentiality and nondisclosure agreement or other agreement between the Participant
and the Company, the right to exercise this option shall terminate immediately upon written notice
to the Participant from the Company describing such violation.




     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.



     (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean willful
misconduct by the Participant or willful failure by the Participant to perform his or her
responsibilities to the Company (including, without limitation, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar
agreement between the Participant and the Company), as determined by the Company, which
determination shall be conclusive. The Participant shall be considered to have been discharged for
“Cause” if the Company determines, within 30 days after the Participant’s resignation, that
discharge for cause was warranted.



4.     Acceleration of Options.




     This option shall vest in full immediately upon (i) the closing of an initial underwritten
public offering of the Company’s securities pursuant to a registration statement under the
Securities Act of 1933, as amended, or (ii) a Change in Control Event (as defined below).



     A “Change in Control Event” shall mean:



     (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change in Control Event: (A) any



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acquisition directly from the Company, or (B) any acquisition by any corporation pursuant to a
Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (b)
of this definition; or




     (b) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote generally in the election
of directors, respectively, of the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination and (y) no Person (excluding any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent that such ownership
existed prior to the Business Combination).



5.     Agreement in Connection with Public Offering.




     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.



6.     Tax Matters.




     (a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.



     (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were



3









 




acquired pursuant to exercise of this option, the Participant shall notify the Company in
writing of such disposition.




7.     Nontransferability of Option.




     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.



8.     Provisions of the Plan.




     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.



     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.



	 	 	 	 	 
	 	NITROSECURITY, INC.

 	 
	Dated: 4/1/2005 	By:  	                  /s/ Terry B. Christensen
 	 
	 	 	Terry B. Christensen 	 
	 	 	President and Chief Executive Officer 	 



4









 






	 	 	 	 	 



PARTICIPANT’S ACCEPTANCE





     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2005 Stock
Incentive Plan.



	 	 	 	 	 
	 	PARTICIPANT:

 	 
	 	/s/ Salo Fajer
 	 
	 	
Address:          13100 Mares Lane

                         Oak Hill, VA 20171 	 
	 	 	 



5









 






	 	 	 	 	 



NOTICE OF STOCK OPTION EXERCISE




Date:                     




NitroSecurity, Inc.

230 Commerce Way

Suite 325

Portsmouth, NH 03801




Attention: Treasurer




Dear Sir or Madam:





     I am the holder of an Incentive
Stock Option granted to me under the NitroSecurity, Inc. (the
“Company”) 2005 Stock Incentive Plan on _____________ for
the purchase of __________ shares of Common
Stock of the Company at a purchase price of $____  per share.



     I hereby exercise my
option to purchase _____________ shares of Common
Stock (the “Shares”), for
which I have enclosed [insert method of payment] in the amount of $____. Please register my
stock certificate as follows:




	 	 	 	 	 
	Name(s):
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Tax I.D. #:
	 	 	 	 
	 

	 	 	 	 





     I represent, warrant and covenant as follows:



     1. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.



     2. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.



     3. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.



     4. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.



6









 





     5. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares
cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under
the Securities Act or an exemption from registration is then available; (iii) in any event, the
exemption from registration under Rule 144 will not be available for at least one year and even
then will not be available unless a public market then exists for the Common Stock, adequate
information concerning the Company is then available to the public, and other terms and conditions
of Rule 144 are complied with; and (iv) there is now no registration statement on file with the
Securities and Exchange Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register the Shares under the Securities Act.



	 	 	 	 	 
	 
	Very truly yours,

 	 	 
	  	 	 
	(Signature) 	 	 
	 




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