Exhibit 10.30


 


AMERICAN DEFENSE SYSTEMS,
INC.


INCENTIVE STOCK OPTION
AGREEMENT


FOR


 






 


Agreement


 


1.                                       Grant
of Option.  AMERICAN
DEFENSE SYSTEMS, INC., a Delaware corporation (the “Company”) hereby grants, as
of                            (“Date
of Grant”), to (the “Optionee”) an option (the “Option”) to purchase up to                     shares
of the Company’s Common Stock, $.001 par value per share (the “Shares”), at an
exercise price per share equal to $2.00 (the “Exercise Price”).  The Option shall be subject to the terms and
conditions set forth herein.  The Option
was issued pursuant to the Company’s 2007 Incentive Compensation Plan (the
“Plan”), which is incorporated herein for all purposes.  The Option is an Incentive Stock Option, and
not a Non-Qualified Stock Option.  The
Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all of the terms and conditions hereof and thereof and all applicable
laws and regulations.


 


2.                                       Definitions.  Unless otherwise provided herein, terms used
herein that are defined in the Plan and not defined herein shall have the
meanings attributed thereto in the Plan.


 


3.                                       Exercise
Schedule.  Except as
otherwise provided in Sections 6 or 10
of this Agreement, or in the Plan, the Option is exercisable in installments as
provided below, which shall be cumulative. To the extent that the Option has
become exercisable with respect to a percentage of Shares as provided below,
the Option may thereafter be exercised by the Optionee, in whole or in part, at
any time or from time to time prior to the expiration of the Option as provided
herein. The following table indicates each date (the “Vesting Date”) upon which
the Optionee shall be entitled to exercise the Option with respect to the
percentage of Shares granted as indicated beside the date, provided that the
Continuous Service of the Optionee continues through and on the applicable
Vesting Date:


 


	
  Percentage of Shares

  	
   

  	
  Vesting Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20%

  	
   

  	
  First anniversary of the
  Date of Grant

  	
   

  
	
  40%

  	
   

  	
  Second anniversary of the
  Date of Grant

  	
   

  
	
  60%

  	
   

  	
  Third anniversary of the
  Date of Grant

  	
   

  
	
  80%

  	
   

  	
  Fourth anniversary of the
  Date of Grant

  	
   

  
	
  100%

  	
   

  	
  Fifth anniversary of the
  Date of Grant

  	
   

  



 


Except
as otherwise specifically provided herein, there shall be no proportionate or
partial vesting in the periods prior to each Vesting Date, and all vesting
shall occur only on the appropriate Vesting Date. Upon the termination of the
Optionee’s Continuous Service, any unvested portion of the Option shall
terminate and be null and void.


 


4.                                       Method
of Exercise.  The vested
portion of this Option shall be exercisable in whole or in part in accordance
with the exercise schedule set forth in Section 3 hereof by written notice
which shall state the election to exercise the Option, the number of Shares in
respect of 


 

















 


which
the Option is being exercised, and such other representations and agreements as
to the holder’s investment intent with respect to such Shares as may be
required by the Company pursuant to the provisions of the Plan.  Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company.  The written notice shall
be accompanied by payment of the Exercise Price.  This Option shall be deemed to be exercised
after both (a) receipt by the Company of such written notice accompanied
by the Exercise Price and (b) arrangements that are satisfactory to the
Committee in its sole discretion have been made for Optionee’s payment to the
Company of the amount, if any, that is necessary to be withheld in accordance
with applicable Federal or state withholding requirements.  No Shares shall be issued pursuant to the
Option unless and until such issuance and such exercise shall comply with all
relevant provisions of applicable law, including the requirements of any stock
exchange upon which the Shares then may be traded.


 


5.                                       Method
of Payment.  Payment of
the Exercise Price shall be by any of the following, or a combination thereof,
at the election of the Optionee:  (a) cash;
(b) check; (c) with Shares that have been held by the Optionee for at
least 6 months (or such other Shares as the Company determines will not cause
the Company to recognize for financial accounting purposes a charge for
compensation expense), (d) if approved by the Committee, pursuant to a
“cashless exercise” procedure by delivery by the Optionee of a properly
executed exercise notice together with such other documentation, and subject to
such guidelines, as the Committee shall require to effect an exercise of the
Option and delivery to the Company by a licensed broker acceptable to the
Company of proceeds from the sale of Shares or a margin loan sufficient to pay
the Exercise Price and any applicable income or employment taxes, or (e) such
other consideration or in such other manner as may be determined by the
Committee in its absolute discretion.


 


6.                                       Termination
of Option.


 


(a)                                  General.  Any unexercised portion of
the Option shall automatically and without notice terminate and become null and
void at the time of the earliest to occur of the following:


 


(i)                                     unless the
Committee otherwise determines in writing in its sole discretion, three months
after the date on which the Optionee’s Continuous Service is terminated other
than by reason of (A) by the Company or a Related Entity for Cause, (B) a
Disability of the Optionee as determined by a medical doctor satisfactory to
the Committee, or (C) the death of the Optionee;


 


(ii)                                  immediately
upon the termination of the Optionee’s Continuous Service by the Company or a
Related Entity for Cause;


 


(iii)                               twelve months
after the date on which the Optionee’s Continuous Service is terminated by
reason of a Disability as determined by a medical doctor satisfactory to the
Committee;


 


(iv)                              (A) twelve
months after the date of termination of the Optionee’s Continuous Service by
reason of the death of the Optionee, or, if later, (B) three months after
the 


 


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date
on which the Optionee shall die if such death shall occur during the one year
period specified in Section 6(a)(iii) hereof; or


 


(v)                                 the seventh
anniversary of the date as of which the Option is granted.


 


(b)                                 Cancellation.  To the extent not previously exercised, (i) the
Option shall terminate immediately in the event of (1) the liquidation or
dissolution of the Company, or (2) any reorganization, merger,
consolidation or other form of corporate transaction in which the Company does
not survive or the Shares are exchanged for or converted into securities issued
by another entity, or an affiliate of such successor or acquiring entity,
unless the successor or acquiring entity, or an affiliate thereof, assumes the
Option or substitutes an equivalent option or right pursuant to Section 10(c) of
the Plan, and (ii) the Committee in its sole discretion may by written
notice (“cancellation notice”) cancel, effective upon the consummation of any
transaction that constitutes a Change in Control, the Option (or portion
thereof) that remains unexercised on such date. 
The Committee shall give written notice of any proposed transaction
referred to in this Section 6(b) a reasonable period of time prior to
the closing date for such transaction (which notice may be given either before
or after approval of such transaction), in order that the Optionee may have a
reasonable period of time prior to the closing date of such transaction within
which to exercise the Option if and to the extent that it then is exercisable
(including any portion of the Option that may become exercisable upon the
closing date of such transaction).  The
Optionee may condition his exercise of the Option upon the consummation of a
transaction referred to in this Section 6(b).


 


7.                                       Restrictions
While Stock is Not Registered.


 


(a)                                  Restricted
Shares.  Any Shares
acquired upon exercise of the Option specified in Section 1 and (i) all
shares of the Company’s capital stock received as a dividend or other
distribution upon such shares, and (ii) all shares of capital stock or
other securities of the Company into which such shares may be changed or for
which such shares shall be exchanged, whether through reorganization,
recapitalization, stock split-ups or the like, shall be subject to the
provisions of this Section 7 at all times, and only at those times, that
Shares are not registered under the Securities Exchange Act of 1934, as amended
(such times during which the Stock is not so registered sometimes hereinafter
being referred to as the “Restricted Period”) and are during the Restricted
Period hereinafter referred to as “Restricted Securities.”


 


(b)                                 No
Sale or Pledge of Restricted Securities.  Except as otherwise provided herein, the
Optionee agrees and covenants that during the Restricted Period he or she shall
not sell, pledge, encumber or otherwise transfer or dispose of, and shall not
permit to be sold, encumbered, attached or otherwise disposed of or transferred
in any manner, either voluntarily or by operation of law (all hereinafter
collectively referred to as “transfers”), all or any portion of the Restricted
Securities or any interest therein except in accordance with and subject to the
terms of this Section 7.


 


(c)                                  Voluntary
Transfer Repurchase Option.  If the Optionee desires to effect a voluntary
transfer of any of the Restricted Securities during the Restricted Period, the
Optionee shall first give written notice to the Company of such intent to
transfer (the “Offer Notice”) 


 


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specifying
(i) the number of the Restricted Securities (the “Offered Shares”) and the
date of the proposed transfer (which shall not be less than fifty (50) days
after the giving of the Offer Notice), (ii) the name, address, and
principal business of the proposed transferee (the “Transferee”), and (iii) the
price and other terms and conditions of the proposed transfer of the Offered
Shares to the Transferee.  The Offer
Notice by the Optionee shall constitute an offer to sell all, but not less than
all, of the Offered Shares, at the price and on the terms specified in such
Offer Notice, to the Company and/or its designated purchaser.  If the Company desires to accept the
Optionee’s offer to sell, either for itself or on behalf of its designated
purchaser, the Company shall signify such acceptance by written notice to Optionee
within fifty (50) days following the giving of the Option Notice.  Failing such acceptance, the Optionee’s offer
shall lapse on the fifty-first day following the giving of the Option
Notice.  With such written acceptance,
the Company shall designate a day not later than ten days following the date of
giving its notice of acceptance on which the Company or its designated
purchaser shall deliver the purchase price of the Offered Shares (in the same
form as provided in the Offer Notice) and the Optionee shall deliver to the
Company or its designated Purchaser, as applicable, all certificates evidencing
the Offered Shares endorsed in blank for transfer or with separate stock powers
endorsed in blank for transfer.  The
Company may in its sole and absolute discretion, notify the Optionee within fifty-one
days following the giving of the Option Notice that it does not permit the
transfer of the Offered Shares to the Transferee pursuant to the terms and
conditions set forth in the Option Notice in which event any such transfer or
attempted transfer by the Optionee to the Transferee shall be null and void.
Upon the lapse without acceptance by the Company of the Optionee’s offer to
sell the Offered Shares, and unless the Company shall provide written notice to
the Optionee within fifty-one days following the giving of the Option Notice
that it will not permit the transfer of the Offered Shares to the Transferee
pursuant to the terms and conditions set forth in the Option Notice, the
Optionee shall be free to transfer the Offered Shares not purchased by the
Company or the designated purchaser to the Transferee (and no one else), for a
price and on terms and conditions which are no more favorable to the Transferee
than those set forth in the Offer Notice, for a period of thirty days
thereafter, but after such period the restrictions of this Section 7 shall
again apply to the Restricted Securities. 
The Offered Shares so transferred by the Optionee to the Transferee
shall continue to be subject to all of the terms and conditions of this Section 7
(including without limitation Section 7(f)) and the Company shall have the
right to require, as a condition of such transfer, that the Transferee execute
an agreement substantially in the form and content of the provisions of this Section 7,
as well as any voting agreement and/or shareholders agreement required by the
Company.


 


(d)                                 Involuntary
Transfer Repurchase Option.  Whenever, during the Restricted Period, the
Optionee has any notice or knowledge of any attempted, pending, or consummated
involuntary transfer or lien or charge upon any of the Restricted Securities,
whether by operation of law or otherwise, the Optionee shall give immediate
written notice thereof to the Company. 
Whenever the Company has any other notice or knowledge of any such
attempted, impending, or consummated involuntary transfer, lien, or charge, it
shall give written notice thereof to the Optionee.  In either case, the Optionee agrees to
disclose forthwith to the Company all pertinent information in his possession
relating thereto.  If during the
Restricted Period any of the Restricted Securities are subjected to any such
involuntary transfer, lien, or charge, the Company and its designated purchaser
shall at all times have the immediate and continuing option to purchase such of
the Restricted Securities upon notice by the Company to the Optionee or other
record holder at a price and on terms determined according to Section 7(g) 


 


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below,
and any of the Restricted Securities so purchased by the Company or its
designated purchaser shall in every case be free and clear of such transfer,
lien, or charge.


 


(e)                                  Excepted
Transfers.  The
provisions of Sections 7(a) and (b) shall not apply to transfers by
the Optionee, either during his or her lifetime or upon his or her death, to
his or her spouse and/or lineal descendants, or to the trustee of any trusts
for the sole benefit of the Optionee and/or the Optionee’s spouse and/or the
Optionee’s lineal descendants; provided, however, that during the Restricted
Period the Optionee shall continue to be subject to all of the terms and
provisions of this Section 7 with respect to any remaining present or
future interest whatsoever he or she may have in the transferred Restricted
Securities, and, further provided that during the Restricted Period any shares
transferred pursuant to this subsection (e) shall continue to be treated
as Restricted Securities and the transferee of any such Restricted Securities
shall likewise be subject to all such terms and conditions of this Section 7
as though such transferee were a party hereto.


 


(f)                                    Repurchase
Option After Termination of Continuous Service.  Anything set forth in this Agreement to the
contrary notwithstanding, the Company shall have the right (but not the
obligation) to purchase or designate a purchaser of all, but not less than all,
of the Restricted Securities (including, without limitation, any Restricted
Securities transferred pursuant to Section 7(e)) during the Restricted
Period and after termination of the Optionee’s Continuous Service for any
reason, for the purchase price and on terms specified in Section 7(g) hereof.  The Company may exercise its right to
purchase or designate a purchaser of the Restricted Securities at any time
(without any time limitation) after the Optionee’s termination of Continuous
Service and during the Restricted Period. 
If the Company chooses to exercise its right to purchase the Restricted
Securities hereunder, the Company shall give its notice of its exercise of this
right to the Optionee or his or her legal representative specifying in such
notice a date not later than ten (10) days following the date of giving
such notice on which the Company or its designated purchaser shall deliver, or
be prepared to deliver, the check or promissory note for the purchase price and
the Optionee or his or her legal representative shall deliver all stock
certificates evidencing such Restricted Securities duly endorsed in blank for
transfer or with separate stock powers endorsed in blank for transfer.


 


(g)                                 Repurchase
Price.  For purposes
of Sections 7(d) and (f) hereof, the per share purchase price of
Restricted Securities shall be an amount equal to the Fair Market Value of such
Share, determined by the Committee as of any date determined by the Committee
that is not more than one year prior to the date of the event giving rise to
the Company’s right to purchase such Restricted Securities. Notwithstanding the
foregoing, if the event that gives rise to the Company’s right to repurchase
the Restricted Securities is the termination of Optionee’s Continuous Service
by the Company or a Related Entity for Cause, the per share purchase price of
the Restricted Securities shall be an amount equal to the lesser of (1) the
Fair Market Value of such share (as determined in accordance with the previous
sentence), and (2) the original purchase price per share the Optionee paid
for such Restricted Securities. Any determination of Fair Market Value made by
the Committee shall be binding and conclusive on all parties.  The purchase price shall, at the option of
the Company, be payable in cash or in the form of the Company’s promissory note
payable in up to three equal annual installments commencing 12 months after the
acquisition by the Company (the “Restricted Share Acquisition Date”) of the
Restricted Securities, together with interest on the unpaid balance thereof at
the rate equal to the 


 


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prime
rate of interest as quoted in the Wall Street Journal on the Restricted Share
Acquisition Date.


 


(h)                                 Legends.  The certificate or certificates representing
any Restricted Securities acquired pursuant to the exercise of this Option
prior to the last day of the Restricted Period shall bear the following legends
(as well as any legends required by applicable state and federal corporate and
securities laws):


 


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


 


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


 


8.                                       Transferability.  Unless otherwise determined by the Committee,
the Option granted hereby is not transferable otherwise than by will or under
the applicable laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee, or the
Optionee’s guardian or legal representative. In addition, the Option shall not
be assigned, negotiated, pledged or hypothecated in any way (whether by
operation of law or otherwise), and the Option shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign,
negotiate, pledge or hypothecate the Option, or in the event of any levy upon
the Option by reason of any execution, attachment or similar process contrary
to the provisions hereof, the Option shall immediately become null and
void.  The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.


 


9.                                       No
Rights of Stockholders.  Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any Shares
purchasable or issuable upon the exercise of the Option, in whole or in part, prior
to the date on which the Shares are issued.


 


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10.                                 Acceleration
of Exercisability of Option.


 


(a)                                  Acceleration
Upon Certain Terminations or Cancellations of Option.  This Option shall become immediately fully
exercisable in the event that, prior to the termination of the Option pursuant
to Section 6 hereof, (i) the Option is terminated pursuant to Section 6(b)(i) hereof,
or (ii) the Company exercises its discretion to provide a cancellation
notice with respect to the Option pursuant to Section 6(b)(ii) hereof.


 


(b)                                 Acceleration
Upon Change in Control.  This Option shall become immediately fully
exercisable in the event that, prior to the termination of the Option pursuant
to Section 6 hereof, and during the Optionee’s Continuous Service, there
is a “Change in Control”, as defined in Section 9(b) of the Plan.


 


(c)                                  Exception
to Acceleration Upon Change in Control.  Notwithstanding the foregoing, if in the
event of a Change in Control the successor company assumes or substitutes for
the Option, the vesting of the Option shall not be accelerated as described in Section 10(b).  For the purposes of this paragraph, the
Option shall be considered assumed or substituted for if following the Change
in Control the Option or substituted option confers the right to purchase, for
each Share subject to the Option immediately prior to the Change in Control,
the consideration (whether stock, cash or other securities or property)
received in the transaction constituting a Change in Control by holders of
Shares for each Share held on the effective date of such transaction (and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares); provided, however,
that if such consideration received in the transaction constituting a Change in
Control is not solely common stock of the successor company or its parent or
subsidiary, the Committee may with the consent of the successor company or its
parent or subsidiary, provide that the consideration to be received upon the
exercise or vesting of the Option will be solely common stock of the successor
company or its parent or subsidiary substantially equal in Fair Market Value to
the per share consideration received by holders of Shares in the transaction
constituting a Change in Control.  The
determination of such substantial equality of value of consideration shall be
made by the Committee in its sole discretion and its determination shall be
conclusive and binding.


 


11.                                 No
Right to Continued Employment.  Neither the Option nor this Agreement shall
confer upon the Optionee any right to continued employment or service with the
Company.


 


12.                                 Law
Governing.  This
Agreement shall be governed in accordance with and governed by the internal
laws of the State of Delaware.


 


13.                                 Incentive
Stock Option Treatment.  The terms of this Option shall be interpreted
in a manner consistent with the intent of the Company and the Optionee that the
Option qualify as an Incentive Stock Option under Section 422 of the
Code.  If any provision of the Plan or
this Agreement shall be impermissible in order for the Option to qualify as an
Incentive Stock Option, then the Option shall be construed and enforced as if
such provision had never been included in the Plan or the Option.  If and to the extent that the number of
Options granted pursuant to this Agreement exceeds the limitations contained in
Section 422 of the Code on the value of Shares with respect to which this
Option may qualify as an Incentive Stock Option, this Option shall be a
Non-Qualified Stock Option.


 


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14.                                 Interpretation
/ Provisions of Plan Control. This Agreement is subject
to all the terms, conditions and provisions of the Plan, including, without
limitation, the amendment provisions thereof, and to such rules, regulations
and interpretations relating to the Plan adopted by the Committee as may be in
effect from time to time. If and to the extent that this Agreement conflicts or
is inconsistent with the terms, conditions and provisions of the Plan, the Plan
shall control, and this Agreement shall be deemed to be modified accordingly.
The Optionee accepts the Option subject to all of the terms and provisions of
the Plan and this Agreement.  The
undersigned Optionee hereby accepts as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under
the Plan and this Agreement, unless shown to have been made in an arbitrary and
capricious manner.


 


15.                                 Notices.  Any notice under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered personally
or when deposited in the United States mail, registered, postage prepaid, and
addressed, in the case of the Company, to the Company’s Secretary at 230 Duffy
Avenue, Unit C, Hicksville, NY 11801, or if the Company should move its
principal office, to such principal office, and, in the case of the Optionee,
to the Optionee’s last permanent address as shown on the Company’s records,
subject to the right of either party to designate some other address at any
time hereafter in a notice satisfying the requirements of this Section.


 


16.                                 Market
Stand-Off Agreement.  In
the event of an initial public offering of the Company’s securities and upon
request of the Company or the underwriters managing any underwritten offering
of the Company’s securities, the Optionee agrees not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of
any Shares (other than those included in the registration) acquired pursuant to
the exercise of the Option, without the prior written consent of the Company or
such underwriters, as the case may be, for such period of time (not to exceed
180 days) from the effective date of such registration as may be requested by
the Company or such managing underwriters.


 


17.                                 Optionee’s
Representations.  In the
event that the Company’s issuance of the Shares purchasable pursuant to the
exercise of this Option has not been registered under the Securities Act of
1933, as amended, at the time this Option is exercised, the Optionee shall, if
required by the Company, concurrently with the exercise of all or any portion
of this Option, deliver to the Company his or her Investment Representation
Statement in the form attached to this Agreement as Exhibit A or in such
other form as the Company may request.


 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the            day of
                                      ,
2007.


 


	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  	
  AMERICAN DEFENSE
  SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  



 


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The Optionee acknowledges
receipt of a copy of the Plan and represents that he or she has reviewed the
provisions of the Plan and this Option Agreement in their entirety, is familiar
with and understands their terms and provisions, and hereby accepts this Option
subject to all of the terms and provisions of the Plan and the Option
Agreement.  The Optionee further
represents that he or she has had an opportunity to obtain the advice of
counsel prior to executing this Option Agreement.


 


	
  Dated:

  	
   

  	
   

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  



 


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EXHIBIT A


 


INVESTMENT REPRESENTATION
STATEMENT


 


	
  PURCHASER :

  	
   

  
	
   

  	
   

  
	
  COMPANY      :

  	
  AMERICAN DEFENSE SYSTEMS,
  INC.

  
	
   

  	
   

  
	
  SECURITY      :

  	
   

  
	
   

  	
   

  
	
  AMOUNT       :

  	
   

  
	
   

  	
   

  
	
  DATE :

  	
   

  



 


In connection with the
purchase of the above-listed Securities, I, the Purchaser, represent to the
Company the following:


 


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


 


(b)                                 I understand
that the Company’s issuance of the Securities has not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment intent
as expressed herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the “SEC”), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future.


 


(c)                                  I further
understand that the Securities must be held indefinitely unless the transfer is
subsequently registered under the Securities Act or unless an exemption from
registration is otherwise available. Moreover, I understand that the Company is
under no obligation to register any transfer of the Securities. In addition, I
understand that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless registered
or such registration is not required in the opinion of counsel for the Company.


 


(d)                                 I am familiar
with the provisions of Rule 701 and Rule 144, each promulgated under
the Securities Act, which, in substance, permit limited public resale of
“restricted securities” acquired, directly or indirectly, from the issuer
thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701
at the time of issuance of the Securities, such issuance will be exempt from
registration under the Securities Act. In the event the Company later becomes
subject to the 


 


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reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, ninety (90) days thereafter the securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified
by Rule 144, including among other things: (1) the sale being made
through a broker in an unsolicited “broker’s transaction” or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934); and, in the case of an affiliate, (2) the
availability of certain public information about the Company, and the amount of
securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), if applicable. Notwithstanding this
paragraph (d), I acknowledge and agree to the restrictions set forth in
paragraph (e) hereof.


 


In the event that the Company does not qualify under Rule 701 at
the time of issuance of the Securities, then the Securities may be resold in
certain limited circumstances subject to the provisions of Rule 144, which
requires among other things: (1) the availability of certain public
information about the Company, (2) the resale occurring not less  than one  year after the
party has purchased, and made full payment for, within the meaning of Rule 144,
the securities to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the securities less than two years, (3) the
sale being made through a broker in an unsolicited “broker’s transaction” or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934) and the amount of securities being sold during
any three month period not exceeding the specified limitations stated therein,
if applicable.


 


(e)                                  I further
understand that in the event all of the applicable requirements of Rule 144
or Rule 701 are not satisfied, registration under the Securities Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 and Rule 701
are not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 or Rule 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk.


 


	
   

  	
   

  	
  Signature
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  Date:

  	
   

  	
   

  	
   

  
				



 


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