AURIGA LABORATORIES,
INC. 



2007 Stock Option Plan 






* * * * * 



        1.       Purposes
of the Plan. The purposes of this 2007 Stock Option Plan are to           attract and
retain the best available personnel for positions of substantial
          responsibility, to provide additional incentive to Employees and Consultants
and           to promote the success of the Company’s business. Options granted
under the           Plan may be Incentive Stock Options or Nonstatutory Stock Options, as
determined           by the Administrator at the time of grant of an option and subject
to the           applicable provisions of Section 422 of the Code and the regulations and
          interpretations promulgated thereunder.  




        2.       Definitions.
As used herein, the following definitions shall apply:  




            (a)                 “Administrator” means
the Board or its Committee appointed           pursuant to Section 4 of the Plan.  




            (b)                 “Affiliate” means
an entity other than a Subsidiary (as defined           below) which, together with the
Company, is under common control of a third           person or entity.  




            (c)                 “Applicable
Laws” means the legal requirements relating to the           administration of
stock option and restricted stock purchase plans, including           under applicable
U.S. state corporate laws, U.S. federal and applicable state           securities laws,
other U.S. federal and state laws, the Code, any Stock Exchange           rules or
regulations and the applicable laws, rules and regulations of any other           country
or jurisdiction where Options are granted under the Plan, as such laws,           rules,
regulations and requirements shall be in place from time to time.  




            (d)                 “Board” means
the Board of Directors of the Company.  




            (e)                 “Cause” for
termination of a Participant’s Continuous           Service Status will exist if the
Participant is terminated by the Company for           any of the following reasons: (i)
Participant’s failure substantially to           perform his or her duties and
responsibilities to the Company or deliberate           violation of a Company policy;
(ii) Participant’s commission of any act of           fraud, embezzlement,
dishonesty or any other willful misconduct; (iii)           unauthorized use or
disclosure by Participant of any proprietary information or           trade secrets of
the Company or any other party to whom the Participant owes an           obligation of
nondisclosure as a result of his or her relationship with the           Company; or (iv)
Participant’s willful breach of any of his or her           obligations under any
written agreement or covenant with the Company. The           determination as to whether
a Participant is being terminated for Cause shall be           made in good faith by the
Company and shall be final and binding on the           Participant. The foregoing
definition does not in any way limit the           Company’s ability to terminate a
Participant’s employment or           consulting relationship at any time as
provided in Section 5(d) below, and the           term “Company” will be
interpreted to include any Subsidiary, Parent           or Affiliate, as appropriate.  













            (f)                 “Change
of Control” means: (i) a sale of all or substantially           all of the
Company’s assets; or (ii) any merger, consolidation or other           business
combination transaction of the Company with or into another           corporation, entity
or person, other than a transaction in which the holders of           at least a majority
of the shares of voting capital stock of the Company           outstanding immediately
prior to such transaction continue to hold (either by           such shares remaining
outstanding or by their being converted into shares of           voting capital stock of
the surviving entity) a majority of the total voting           power represented by the
shares of voting capital stock of the Company (or the           surviving entity)
outstanding immediately after such transaction; or (iii) the           direct or indirect
acquisition (including by way of a tender or exchange offer)           by any person, or
persons acting as a group, of beneficial ownership or a right           to acquire
beneficial ownership of shares representing a majority of the voting           power of
the then outstanding shares of capital stock of the Company.  




            (g)                 “Code” means
the Internal Revenue Code of 1986, as amended.  




            (h)                 “Committee” means
one or more committees or subcommittees of           the Board appointed by the Board to
administer the Plan in accordance with           Section 4 below.  




            (i)                 “Common
Stock” means the Common Stock of the Company.  




            (j)                 “Company” means
Auriga Laboratories, Inc., a Delaware           corporation.  




            (k)                 “Consultant” means
any person, including an advisor, who is           engaged by the Company or any Parent,
Subsidiary or Affiliate to render services           (other than capital-raising
services) and is compensated for such services, and           any director of the Company
whether compensated for such services or not.  




            (l)                 “Continuous
Service Status” means the absence of any           interruption or termination
of service as an Employee or Consultant. Continuous           Service Status as an
Employee or Consultant shall not be considered interrupted           in the case of: (i) sick
leave; (ii) military leave; (iii) any           other leave of absence approved
by the Administrator, provided that such leave           is for a period of not more than
ninety (90) days, unless reemployment upon the           expiration of such leave is
guaranteed by contract or statute, or unless           provided otherwise pursuant to
Company policy adopted from time to time; or           (iv) in the case of transfers
between locations of the Company or between           the Company, its Parents,
Subsidiaries, Affiliates or their respective           successors. A change in status
from an Employee to a Consultant or from a           Consultant to an Employee will not
constitute an interruption of Continuous           Service Status.  




            (m)                 “Corporate
Transaction” means a sale of all or substantially           all of the Company’s
assets, or a merger, consolidation or other capital           reorganization or business
combination transaction of the Company with or into           another corporation, entity
or person, or the direct or indirect acquisition           (including by way of a tender
or exchange offer) by any person, or persons           acting as a group, of beneficial
ownership or a right to acquire beneficial           ownership of shares representing a
majority of the voting power of the then           outstanding shares of capital stock of
the Company.  




            (n)                 “Director” means
a member of the Board.  




            (o)                 “Employee” means
any person employed by the Company or any           Parent, Subsidiary or Affiliate, with
the status of employment determined based           upon such factors as are deemed
appropriate by the Administrator in its           discretion, subject to any requirements
of the Code or the Applicable Laws. The           payment by the Company of a director’s
fee to a Director shall not be           sufficient to constitute “employment” of
such Director by the Company.  





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            (p)                 “Exchange
Act” means the Securities Exchange Act of 1934, as           amended.  




            (q)                 “Fair
Market Value” means, as of any date, the fair market           value of the
Common Stock, as determined by the Administrator in good faith on           such basis as
it deems appropriate and applied consistently with respect to           Participants.
Whenever possible, the determination of Fair Market Value shall be           based upon
the closing price for the Shares as reported in the Wall Street           Journal for
the applicable date.  




            (r)                 “Incentive
Stock Option” means an Option intended to qualify as           an incentive
stock option within the meaning of Section 422 of the Code, as           designated in
the applicable Option Agreement.  




            (t)                 “Listed
Security” means any security of the Company that is           listed or approved
for listing on a national securities exchange or designated           or approved for
designation as a national market system security on an           interdealer quotation
system by the National Association of Securities Dealers,           Inc.  




            (u)                 “Named
Executive” means any individual who, on the last day of           the Company’s
fiscal year, is the chief executive officer of the Company           (or is acting in
such capacity) or among the four most highly compensated           officers of the
Company (other than the chief executive officer). Such officer           status shall be
determined pursuant to the executive compensation disclosure           rules under the
Exchange Act.  




            (v)                 “Nonstatutory
Stock Option” means an Option not intended to           qualify as an Incentive
Stock Option, as designated in the applicable Option           Agreement.  




            (w)                 “Option” means
a stock option granted pursuant to the Plan.  




            (x)                 “Option
Agreement” means a written document, the form(s) of           which shall be
approved from time to time by the Administrator, reflecting the           terms of an
Option granted under the Plan and includes any documents attached to           or
incorporated into such Option Agreement, including, but not limited to, a
          notice of stock option grant and a form of exercise notice.  




            (y)                 “Option
Exchange Program” means a program approved by the           Administrator
whereby outstanding Options are exchanged for Options with a lower           exercise
price or are amended to decrease the exercise price as a result of a           decline in
the Fair Market Value of the Common Stock.  




            (z)                 “Optioned
Stock” means the Common Stock subject to an Option.  




            (aa)                 “Optionee” means
an Employee or Consultant who receives an           Option.  




            (bb)                 “Parent” means
a “parent corporation,” whether now or           hereafter existing, as defined
in Section 424(e) of the Code, or any           successor provision.  




            (cc)                 “Participant” means
any holder of one or more Options, or the           Shares issuable or issued upon
exercise of such Options, under the Plan.  




            (dd)                 “Plan” means
this 2007 Stock Option Plan.  




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            (ee)                 “Reporting
Person” means an officer, Director, or greater than           ten percent
shareholder of the Company within the meaning of Rule 16a-2 under           the Exchange
Act, who is required to file reports pursuant to Rule 16a-3 under           the Exchange
Act.  




            (ff)                 “Rule
16b-3” means Rule 16b-3 promulgated under the Exchange           Act, as amended
from time to time, or any successor provision.  




            (gg)                 “Share” means
a share of the Common Stock, as adjusted in           accordance with Section 13 of the
Plan.  




            (hh)                 “Stock
Exchange” means any stock exchange or consolidated stock           price
reporting system on which prices for the Common Stock are quoted at any           given
time.  




            (ii)                 “Subsidiary” means
a “subsidiary corporation,”          whether now or hereafter existing, as
defined in Section 424(f) of the           Code, or any successor provision.  




            (jj)                 “Ten
Percent Holder” means a person who owns stock representing           more than
ten percent (10%) of the voting power of all classes of stock of the           Company or
any Parent or Subsidiary measured as of an Option’s date of           grant.  




        3.       Stock
Subject to the Plan. Subject to the provisions of Section 13 of the           Plan,
the maximum aggregate number of Shares that may be issued under the Plan           is
7,000,000 Shares of Common Stock of which a maximum of 7,000,000 Shares may           be
issued under the Plan pursuant to Incentive Stock Options. The Shares may be
          authorized, but unissued, or reacquired Common Stock. If an award should expire
          or become unexercisable for any reason without having been exercised in full,
or           is surrendered pursuant to an Option Exchange Program, the unpurchased
Shares           that were subject thereto shall, unless the Plan shall have been
terminated,           become available for future grant under the Plan. In addition, any
Shares of           Common Stock which are retained by the Company upon exercise of an
award in           order to satisfy the exercise or purchase price for such award or any
          withholding taxes due with respect to such exercise or purchase shall be
treated           as not issued and shall continue to be available under the Plan. Shares
issued           under the Plan and later repurchased by the Company pursuant to any
repurchase           right which the Company shall be available for future grant under
the Plan.  




        4.       Administration
of the Plan.  




            (a)       General.
The Plan shall be administered by the Board or a Committee, or a           combination
thereof, as determined by the Board. The Plan may be administered by           different
administrative bodies with respect to different classes of           Participants and, if
permitted by the Applicable Laws, the Board may authorize           one or more officers
to make awards under the Plan.  




            (b)       Committee
Composition. If a Committee has been appointed pursuant to this           Section 4,
such Committee shall continue to serve in its designated capacity           until
otherwise directed by the Board. From time to time the Board may increase           the
size of any Committee and appoint additional members thereof, remove members
          (with or without cause) and appoint new members in substitution therefor, fill
          vacancies (however caused) and remove all members of a Committee and thereafter
          directly administer the Plan, all to the extent permitted by the Applicable
Laws           and, in the case of a Committee administering the Plan in accordance with
the           requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent
          permitted or required by such provisions. The Committee shall in all events
          conform to any requirements of the Applicable Laws.  





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            (c)       Powers
of the Administrator. Subject to the provisions of the Plan and in           the case
of a Committee, the specific duties delegated by the Board to such           Committee,
the Administrator shall have the authority, in its discretion:  




                (i)                 to
determine the Fair Market Value of the Common Stock, in accordance with           Section
2 of the Plan, provided that such determination shall be applied           consistently
with respect to Participants under the Plan;  




                (ii)                 to
select the Employees and Consultants to whom Options may from time to time be
          granted;  




                (iii)                 to
determine whether and to what extent Options are granted;  




                (iv)                 to
determine the number of Shares of Common Stock to be covered by each award
          granted;  




                (v)                 to
approve the form(s) of agreement(s) used under the Plan;  




                (vi)                 to
determine the terms and conditions, not inconsistent with the terms of the
          Plan, of any award granted hereunder, which terms and conditions include but
are           not limited to the exercise or purchase price, the time or times when
awards may           be exercised (which may be based on performance criteria), any
vesting           acceleration or waiver of forfeiture restrictions, any pro rata
adjustment to           vesting as a result of a Participant’s transitioning from
full- to           part-time service (or vice versa), and any restriction or limitation
regarding           any Option, Optioned Stock or restricted stock issued upon exercise
of an           Option, based in each case on such factors as the Administrator, in its
sole           discretion, shall determine;  




                (vii)                 to
determine whether and under what circumstances an Option may be settled in           cash
under Section    10(c)           instead of Common Stock;  




                (viii)                 to
implement an Option Exchange Program on such terms and conditions as the
          Administrator in its discretion deems appropriate, provided that no amendment
or           adjustment to an Option that would materially and adversely affect the
rights of           any Optionee shall be made without the prior written consent of the
Optionee;  




                (ix)                 to
adjust the vesting of an Option held by an Employee or Consultant as a result
          of a change in the terms or conditions under which such person is providing
          services to the Company;  




                (x)                 to
construe and interpret the terms of the Plan and awards granted under the           Plan,
which constructions, interpretations and decisions shall be final and           binding
on all Participants; and  




                (xi)                 in
order to fulfill the purposes of the Plan and without amending the Plan, to
          modify grants of Options to Participants who are foreign nationals or employed
          outside of the United States in order to recognize differences in local law,
tax           policies or customs.  




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            (d)       Indemnification. To
the maximum extent permitted by Applicable Laws, each           member of the Committee
(including officers of the Company, if applicable), or           of the Board, as
applicable, shall be indemnified and held harmless by the           Company against and
from: (i) any loss, cost, liability, or expense that may be           imposed upon or
reasonably incurred by him or her in connection with or           resulting from any
claim, action, suit, or proceeding to which he or she may be           a party or in
which he or she may be involved by reason of any action taken or           failure to act
under the Plan or pursuant to the terms and conditions of any           Option except for
actions taken in bad faith or failures to act in bad faith;           and (ii) any and
all amounts paid by him or her in settlement thereof, with the           Company’s
approval, or paid by him or her in satisfaction of any judgment           in any such
claim, action, suit, or proceeding against him or her, provided that           such
member shall give the Company an opportunity, at its own expense, to handle           and
defend any such claim, action, suit or proceeding before he or she           undertakes
to handle and defend it on his or her own behalf. The foregoing right           of
indemnification shall not be exclusive of any other rights of indemnification
          to which such persons may be entitled under the Company’s Articles of
          Incorporation, Certificate of Incorporation or Bylaws, by contract, as a matter
          of law, or otherwise, or under any other power that the Company may have to
          indemnify or hold harmless each such person.  




        5.       Eligibility.  




            (a)       Recipients
of Grants. Nonstatutory Stock Options may be granted to           Employees and
Consultants. Incentive Stock Options may be granted only to           Employees, provided
that Employees of Affiliates shall not be eligible to           receive Incentive Stock
Options.  




            (b)       Type
of Option. Each Option shall be designated in the Option Agreement           as
either an Incentive Stock Option or a Nonstatutory Stock Option.  




            (c)       ISO
$100,000 Limitation. Notwithstanding any designation under Section           5(b), to
the extent that the aggregate Fair Market Value of Shares with respect           to which
Options designated as Incentive Stock Options are exercisable for the           first
time by any Optionee during any calendar year (under all plans of the           Company
or any Parent or Subsidiary) exceeds $100,000, such excess Options shall           be
treated as Nonstatutory Stock Options. For purposes of this           Section 5(c),
Incentive Stock Options shall be taken into account in the           order in which they
were granted, and the Fair Market Value of the Shares           subject to an Incentive
Stock Option shall be determined as of the date of the           grant of such Option.  




            (d)       No
Employment Rights. The Plan shall not confer upon any Participant any           right
with respect to continuation of an employment or consulting relationship           with
the Company, nor shall it interfere in any way with such Participant’s
          right or the Company’s right to terminate the employment or consulting
          relationship at any time for any reason.  




        6.       Term
of Plan. The Plan shall become effective upon its adoption by the           Board of
Directors. It shall continue in effect for a term of ten (10) years           unless
sooner terminated under Section 15 of the Plan.  




        7.       Term
of Option. The term of each Option shall be the term stated in the           Option
Agreement; provided that the term shall be no more than ten years           from the
date of grant thereof or such shorter term as may be provided in the           Option
Agreement and provided further that, in the case of an Incentive Stock           Option
granted to a person who at the time of such grant is a Ten Percent           Holder, the
term of the Option shall be five years from the date of grant           thereof or such
shorter term as may be provided in the Option Agreement.  





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        8.       Limitation
on Grants to Employees. Subject to adjustment as provided in           Section 13
below, the maximum number of Shares that may be subject to Options           granted to
any one Employee under this Plan for any fiscal year of the Company           shall be
1,000,000 provided that this Section 8 shall apply only after such           time, if
any, as the Common Stock becomes a Listed Security.  




        9.       Option
Exercise Price and Consideration.  




            (a)       Exercise
Price. The per Share exercise price for the Shares to be issued           pursuant to
exercise of an Option shall be such price as is determined by the           Administrator
and set forth in the Option Agreement, but shall be subject to the           following:  




                (i)                 In
the case of an Incentive Stock Option:  




                    (A)                 granted
to an Employee who at the time of grant is a Ten Percent Holder, the per           Share
exercise price shall be no less than 110% of the Fair Market Value per           Share on
the date of grant; or  




                    (B)                 granted
to any other Employee, the per Share exercise price shall be no less           than 100%
of the Fair Market Value per Share on the date of grant;  




                (ii)                 In
the case of a Nonstatutory Stock Option:  




                    (A)                 granted
on any date on which the Common Stock is not a Listed Security to a           person who
is at the time of grant is a Ten Percent Holder, the per Share           exercise price
shall be no less than 110% of the Fair Market Value per Share on           the date of
grant if required by the Applicable Laws and, if not so required,           shall be such
price as is determined by the Administrator;  




                    (B)                 granted
on any date on which the Common Stock is not a Listed Security to any           other
eligible person, the per Share exercise price shall be no less than 85% of           the
Fair Market Value per Share on the date of grant if required by the           Applicable
Laws and, if not so required, shall be such price as is determined by           the
Administrator; or  




                    (C)                 granted
on any date on which the Common Stock is a Listed Security to any           eligible
person, the per Share exercise price shall be such price as determined           by the
Administrator provided that if such eligible person is, at the time of           the
grant of such Option, , the per Share exercise price shall be no less than           100%
of the Fair Market Value on the date of grant if such Option is intended to
          qualify as performance-based compensation under Section 162(m) of the Code; and  




                (iii)                 Notwithstanding
the foregoing, Options may be granted with a per Share exercise           price other
than as required above pursuant to a merger or other corporate           transaction.  





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            (b)       Permissible
Consideration. The consideration to be paid for the Shares to           be issued
upon exercise of an Option, including the method of payment, shall be
          determined by the Administrator (and, in the case of an Incentive Stock Option,
          shall be determined at the time of grant) and may consist entirely of:
          (i) cash; (ii) check; (iii) subject to any requirements of the
          Applicable Laws (including without limitation Section 153 of the Delaware
          General Corporation Law), delivery of Optionee’s promissory note having
          such recourse, interest, security and redemption provisions as the
Administrator           determines to be appropriate after taking into account the
potential accounting           consequences of permitting an Optionee to deliver a
promissory note; (iv) other           Shares that have a Fair Market Value on the date of
surrender equal to the           aggregate exercise price of the Shares as to which the
Option is exercised,           provided that in the case of Shares acquired, directly or
indirectly, from the           Company, such Shares must have been owned by the Optionee
for more than six           months on the date of surrender (or such other period as may
be required to           avoid the Company’s incurring an adverse accounting
charge); (v) if,           as of the date of exercise of an Option the Company then
is permitting employees           to engage in a “same-day sale” cashless
brokered exercise program           involving one or more brokers, through such a program
that complies with the           Applicable Laws (including without limitation the
requirements of Regulation T           and other applicable regulations promulgated by
the Federal Reserve Board) and           that ensures prompt delivery to the company of
the amount required to pay the           exercise price and any applicable withholding
taxes; or (vi) any combination of           the foregoing methods of payment. In making
its determination as to the type of           consideration to accept, the Administrator
shall consider if acceptance of such           consideration may be reasonably expected
to benefit the Company and the           Administrator may, in its sole discretion,
refuse to accept a particular form of           consideration at the time of any Option
exercise.  




        10.       Exercise
of Option.  




            (a)       General.  




                (i)       Exercisability.
Any Option granted hereunder shall be exercisable at such           times and under such
conditions as determined by the Administrator, consistent           with the term of the
Plan and reflected in the Option Agreement, including           vesting requirements
and/or performance criteria with respect to the Company           and/or the Optionee;
provided however that, if required under Applicable Laws,           the Option (or Shares
issued upon exercise of the Option) shall comply with the           requirements of
Section 260.140.41(f) and (k) of the Rules of the California           Corporations
Commissioner.  




                (ii)       Leave
of Absence. The Administrator shall have the discretion to           determine
whether and to what extent the vesting of Options shall be tolled           during any
unpaid leave of absence; provided, however, that in the absence of           such
determination, vesting of Options shall be tolled during any such unpaid           leave
(unless otherwise required by the Applicable Laws). In the event of           military
leave, vesting shall toll during any unpaid portion of such leave,           provided
that, upon a Participant’s returning from military leave (under           conditions
that would entitle him or her to protection upon such return under           the Uniform
Services Employment and Reemployment Rights Act), he or she shall be           given
vesting credit with respect to Options to the same extent as would have           applied
had the Participant continued to provide services to the Company           throughout the
leave on the same terms as he or she was providing services           immediately prior
to such leave.  




                (iii)       Minimum
Exercise Requirements. An Option may not be exercised for a           fraction of a
Share. The Administrator may require that an Option be exercised           as to a
minimum number of Shares, provided that such requirement shall not           prevent an
Optionee from exercising the full number of Shares as to which the           Option is
then exercisable.  




                (iv)       Procedures
for and Results of Exercise. An Option shall be deemed           exercised when
written notice of such exercise has been given to the Company in           accordance
with the terms of the Option by the person entitled to exercise the           Option and
the Company has received full payment for the Shares with respect to           which the
Option is exercised and has paid, or made arrangements to satisfy, any
          applicable withholding requirements.  





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        Exercise
of an Option in any manner shall result in a decrease in the number of Shares that
thereafter may be available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised. 



                (v)       Rights
as Shareholder. Until the issuance of the Shares (as evidenced by           the
appropriate entry on the books of the Company or of a duly authorized           transfer
agent of the Company), no right to vote or receive dividends or any           other
rights as a shareholder shall exist with respect to the Optioned Stock,
          notwithstanding the exercise of the Option. No adjustment will be made for a
          dividend or other right for which the record date is prior to the date the
stock           certificate is issued, except as provided in Section 13 of the Plan.  




            (b)       Termination
of Employment or Consulting Relationship. Except as otherwise           set forth in
this Section 10(b), the Administrator shall establish and set forth           in the
applicable Option Agreement the terms and conditions upon which an Option           shall
remain exercisable, if at all, following termination of an Optionee’s
          Continuous Service Status, which provisions may be waived or modified by the
          Administrator at any time. Unless the Administrator otherwise provides in the
          Option Agreement, to the extent that the Optionee is not vested in Optioned
          Stock at the date of termination of his or her Continuous Service Status, or if
          the Optionee (or other person entitled to exercise the Option) does not
exercise           the Option to the extent so entitled within the time specified in the
Option           Agreement or below (as applicable), the Option shall terminate and the
Optioned           Stock underlying the unexercised portion of the Option shall revert to
the Plan.           In no event may any Option be exercised after the expiration of the
Option term           as set forth in the Option Agreement (and subject to Section 7).  




        The
following provisions: (a) shall apply to the extent an Option Agreement does not specify
the terms and conditions upon which an Option shall terminate upon termination of an
Optionee’s Continuous Service Status; and (b) establish the minimum post-termination
exercise periods that may be set forth in an Option Agreement: 



                (i)       Termination
other than Upon Disability or Death or for Cause. In the           event of
termination of Optionee’s Continuous Service Status other than           under the
circumstances set forth in subsections (ii) through (iv) below, such           Optionee
may exercise an Option for 30 days following such termination to the           extent the
Optionee was vested in the Optioned Stock as of the date of such           termination.
No termination shall be deemed to occur and this Section 10(b)(i)           shall not
apply if: (A) the Optionee is a Consultant who becomes an Employee; or           (B) the
Optionee is an Employee who becomes a Consultant.  




                (ii)       Disability
of Optionee. In the event of termination of an Optionee’s           Continuous
Service Status as a result of his or her disability (including a           disability
within the meaning of Section 22(e)(3) of the Code), such Optionee           may exercise
an Option at any time within six months following such termination           to the
extent the Optionee was vested in the Optioned Stock as of the date of           such
termination.  




                (iii)       Death
of Optionee. In the event of the death of an Optionee during the           period of
Continuous Service Status since the date of grant of the Option, or           within
thirty days following termination of Optionee’s Continuous Service           Status,
the Option may be exercised by Optionee’s estate or by a person who
          acquired the right to exercise the Option by bequest or inheritance at any time
          within twelve months following the date of death, but only to the extent the
          Optionee was vested in the Optioned Stock as of the date of death or, if
          earlier, the date the Optionee’s Continuous Service Status terminated.  




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                (iv)       Termination
for Cause. In the event of termination of an Optionee’s           Continuous
Service Status for Cause, any Option (including any exercisable           portion
thereof) held by such Optionee shall immediately terminate in its           entirety upon
first notification to the Optionee of termination of the           Optionee’s
Continuous Service Status. If an Optionee’s employment or           consulting
relationship with the Company is suspended pending an investigation           of whether
the Optionee shall be terminated for Cause, all the Optionee’s           rights
under any Option likewise shall be suspended during the investigation           period
and the Optionee shall have no right to exercise any Option. This Section
          10(b)(iv) shall apply with equal effect to vested Shares acquired upon exercise
          of an Option granted prior to the date, if any, upon which the Common Stock
          becomes a Listed Security to a person other than an officer, Director or
          Consultant, in that the Company shall have the right to repurchase such Shares
          from the Participant upon the following terms: (A) the repurchase is made
within           90 days of termination of the Participant’s Continuous Service
Status for           Cause at the Fair Market Value of the Shares as of the date of
termination; (B)           consideration for the repurchase consists of cash or
cancellation of purchase           money indebtedness; and (C) the repurchase right
terminates upon the effective           date of the Company’s initial public
offering of its Common Stock. With           respect to vested Shares issued upon
exercise of an Option granted to any           officer, Director or Consultant, the
Company’s right to repurchase such           Shares upon termination of the
Participant’s Continuous Service Status for           Cause shall be made at the
Participant’s original cost for the Shares and           shall be effected pursuant
to such terms and conditions, and at such time, as           the Administrator shall
determine. Nothing in this Section 10(b)(iv) shall in           any way limit the Company’s
right to purchase unvested Shares issued upon           exercise of an Option as set
forth in the applicable Option Agreement.  




            (c)       Buyout
Provisions. The Administrator may at any time offer to buy out for           a
payment in cash or Shares an Option previously granted under the Plan based on
          such terms and conditions as the Administrator shall establish and communicate
          to the Optionee at the time that such offer is made.  




        11.       Taxes.  




            (a)                 As
a condition of the grant, vesting or exercise of an Option granted under the
          Plan, the Participant (or in the case of the Participant’s death, the
          person exercising the Option) shall make such arrangements as the Administrator
          may require for the satisfaction of any applicable federal, state, local or
          foreign withholding tax obligations that may arise in connection with such
          grant, vesting or exercise of the Option or the issuance of Shares. The Company
          shall not be required to issue any Shares under the Plan until such obligations
          are satisfied. If the Administrator allows the withholding or surrender of
          Shares to satisfy a Participant’s tax withholding obligations under this
          Section 11 (whether pursuant to Section 11(c), (d) or (e), or otherwise), the
          Administrator shall not allow Shares to be withheld in an amount that exceeds
          the minimum statutory withholding rates for federal and state tax purposes,
          including payroll taxes.  




            (b)                 In
the case of an Employee and in the absence of any other arrangement, the
          Employee shall be deemed to have directed the Company to withhold or collect
          from his or her compensation an amount sufficient to satisfy such tax
          obligations from the next payroll payment otherwise payable after the date of
an           exercise of the Option.  





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            (c)                 This
Section 11(c) shall apply only after the date, if any, upon which the           Common
Stock becomes a Listed Security. In the case of Participant other than an
          Employee (or in the case of an Employee where the next payroll payment is not
          sufficient to satisfy such tax obligations, with respect to any remaining tax
          obligations), in the absence of any other arrangement and to the extent
          permitted under the Applicable Laws, the Participant shall be deemed to have
          elected to have the Company withhold from the Shares to be issued upon exercise
          of the Option that number of Shares having a Fair Market Value determined as of
          the applicable Tax Date (as defined below) equal to the amount required to be
          withheld. For purposes of this Section 11, the Fair Market Value of the Shares
          to be withheld shall be determined on the date that the amount of tax to be
          withheld is to be determined under the Applicable Laws (the “Tax
          Date”).  




            (d)                 If
permitted by the Administrator, in its discretion, a Participant may satisfy
          his or her tax withholding obligations upon exercise of an Option by
          surrendering to the Company Shares that have a Fair Market Value determined as
          of the applicable Tax Date equal to the amount required to be withheld. In the
          case of shares previously acquired from the Company that are surrendered under
          this Section 11(d), such Shares must have been owned by the Participant for
more           than six (6) months on the date of surrender (or such other period of time
as is           required for the Company to avoid adverse accounting charges).  




            (e)                 Any
election or deemed election by a Participant to have Shares withheld to           satisfy
tax withholding obligations under Section 11(c) or (d) above shall be
          irrevocable as to the particular Shares as to which the election is made and
          shall be subject to the consent or disapproval of the Administrator. Any
          election by a Participant under Section 11(d) above must be made on or prior to
          the applicable Tax Date.  




            (f)                 In
the event an election to have Shares withheld is made by a Participant and           the
Tax Date is deferred under Section 83 of the Code because no election is           filed
under Section 83(b) of the Code, the Participant shall receive the full           number
of Shares with respect to which the Option is exercised but such           Participant
shall be unconditionally obligated to tender back to the Company the           proper
number of Shares on the Tax Date.  




        12.       Non-Transferability
of Options.  




            (a)       General. Except
as set forth in this Section 12, Options may not be sold,           pledged, assigned,
hypothecated, transferred or disposed of in any manner other           than by will or by
the laws of descent or distribution. The designation of a           beneficiary by an
Optionee will not constitute a transfer. An Option may be           exercised, during the
lifetime of the holder of an Option, only by such holder           or a transferee
permitted by this Section 12.  




            (b)       Limited
Transferability Rights. Notwithstanding anything else in this           Section 12,
the Administrator may in its discretion grant Nonstatutory Stock           Options that
may be transferred by instrument to an inter vivos or testamentary           trust in
which the Options are to be passed to beneficiaries upon the death of           the
trustor (settlor) or by gift or pursuant to domestic relations orders to any
          “Immediate Family Member” (as defined below) of the Optionee.
          “Immediate Family Member” means any child, stepchild,
          grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
          niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
          brother-in-law, or sister-in-law (including adoptive relationships), any person
          sharing the Optionee’s household (other than a tenant or employee), a
trust           in which these persons have more than fifty percent of the beneficial
interest,           a foundation in which these persons (or the Optionee) control the
management of           assets, and any other entity in which these persons (or the
Optionee) own more           than fifty percent of the voting interests.  




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        13.       Adjustments
Upon Changes in Capitalization, Merger or Certain Other           Transactions.  




            (a)       Changes
in Capitalization. Subject to any action required under           Applicable Laws by
the shareholders of the Company, the number of Shares of           Common Stock covered
by each outstanding Option, the numbers of Shares set forth           in Sections 3 and 8
above, and the number of Shares of Common Stock that have           been authorized for
issuance under the Plan but as to which no Options have yet           been granted or
that have been returned to the Plan upon cancellation or           expiration of an
Option, as well as the price per Share of Common Stock covered           by each such
outstanding Option, shall be proportionately adjusted for any           increase or
decrease in the number of issued Shares of Common Stock resulting           from a stock
split, reverse stock split, stock dividend, combination,           recapitalization or
reclassification of the Common Stock, or any other increase           or decrease in the
number of issued Shares of Common Stock effected without           receipt of
consideration by the Company; provided, however, that conversion of           any
convertible securities of the Company shall not be deemed to have been           “effected
without receipt of consideration.” Such adjustment shall be           made by the
Administrator, whose determination in that respect shall be final,           binding and
conclusive. Except as expressly provided herein, no issuance by the           Company of
shares of stock of any class, or securities convertible into shares           of stock of
any class, shall affect, and no adjustment by reason thereof shall           be made with
respect to, the number or price of Shares of Common Stock subject           to an Option.  




            (b)       Dissolution
or Liquidation. In the event of the dissolution or           liquidation of the
Company, each Option will terminate immediately prior to the           consummation of
such action, unless otherwise determined by the Administrator.  




            (c)       Corporate
Transaction. In the event of a Corporate Transaction (including           without
limitation a Change of Control), each outstanding Option shall be           assumed or an
equivalent option or right shall be substituted by such successor           corporation
or a parent or subsidiary of such successor corporation (the           “Successor
Corporation”), unless the Successor Corporation does           not agree to
assume the award or to substitute an equivalent option or right, in           which case
such Option shall terminate upon the consummation of the transaction.  




        For
purposes of this Section 13(c), an Option shall be considered assumed, without limitation,
if, at the time of issuance of the stock or other consideration upon a Corporate
Transaction or a Change of Control, as the case may be, each holder of an Option would be
entitled to receive upon exercise of the award the same number and kind of shares of stock
or the same amount of property, cash or securities as such holder would have been entitled
to receive upon the occurrence of the transaction if the holder had been, immediately
prior to such transaction, the holder of the number of Shares of Common Stock covered by
the award at such time (after giving effect to any adjustments in the number of Shares
covered by the Option as provided for in this Section 13); provided that if such
consideration received in the transaction is not solely common stock of the Successor
Corporation, the Administrator may, with the consent of the Successor Corporation, provide
for the consideration to be received upon exercise of the award to be solely common stock
of the Successor Corporation equal to the Fair Market Value of the per Share consideration
received by holders of Common Stock in the transaction. 




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            (d)       Certain
Distributions. In the event of any distribution to the           Company’s
shareholders of securities of any other entity or other assets           (other than
dividends payable in cash or stock of the Company) without receipt           of
consideration by the Company, the Administrator may, in its discretion,
          appropriately adjust the price per Share of Common Stock covered by each
          outstanding Option to reflect the effect of such distribution.  




        14.       Time
of Granting Options. The date of grant of an Option shall, for all
          purposes, be the date on which the Administrator makes the determination
          granting such Option, or such other date as is determined by the Administrator,
          provided that in the case of any Incentive Stock Option, the grant date shall
be           the later of the date on which the Administrator makes the determination
          granting such Incentive Stock Option or the date of commencement of the
          Optionee’s employment relationship with the Company. Notice of the
          determination shall be given to each Employee or Consultant to whom an Option
is           so granted within a reasonable time after the date of such grant.  




        15.       Amendment
and Termination of the Plan.  




            (a)       Authority
to Amend or Terminate. The Board may at any time amend, alter,           suspend or
discontinue the Plan, but no amendment, alteration, suspension or
          discontinuation (other than an adjustment pursuant to Section 13 above) shall
be           made that would materially and adversely affect the rights of any Optionee
under           any outstanding grant, without his or her consent. In addition, to the
extent           necessary and desirable to comply with the Applicable Laws, the Company
shall           obtain shareholder approval of any Plan amendment in such a manner and to
such a           degree as required.  




            (b)       Effect
of Amendment or Termination. Except as to amendments which the
          Administrator has the authority under the Plan to make unilaterally, no
          amendment or termination of the Plan shall materially and adversely affect
          Options already granted, unless mutually agreed otherwise between the Optionee
          and the Administrator, which agreement must be in writing and signed by the
          Optionee or holder and the Company.  




        16.       Conditions
Upon Issuance of Shares. Notwithstanding any other provision           of the Plan or
any agreement entered into by the Company pursuant to the Plan,           the Company
shall not be obligated, and shall have no liability for failure, to           issue or
deliver any Shares under the Plan unless such issuance or delivery           would comply
with the Applicable Laws, with such compliance determined by the           Company in
consultation with its legal counsel. As a condition to the exercise           of an
Option, the Company may require the person exercising the award to           represent
and warrant at the time of any such exercise that the Shares are being
          purchased only for investment and without any present intention to sell or
          distribute such Shares if, in the opinion of counsel for the Company, such a
          representation is required by law. Shares issued upon exercise of Options
          granted prior to the date on which the Common Stock becomes a Listed Security
          shall be subject to a right of first refusal in favor of the Company pursuant
to           which the Participant will be required to offer Shares to the Company before
          selling or transferring them to any third party on such terms and subject to
          such conditions as is reflected in the applicable Option Agreement.  




        17.       Agreements.
Options shall be evidenced by Option Agreements in such           form(s) as the
Administrator shall from time to time approve.  




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        18.       Shareholder
Approval. If required by the Applicable Laws, continuance of           the Plan shall
be subject to approval by the shareholders of the Company within           twelve (12)
months before or after the date the Plan is adopted. Such           shareholder approval
shall be obtained in the manner and to the degree required           under the Applicable
Laws.  




        19.       Information
and Documents to Optionees. Prior to the date, if any, upon           which the
Common Stock becomes a Listed Security and if required by the           Applicable Laws,
the Company shall provide financial statements at least           annually to each
Optionee and to each individual who acquired Shares pursuant to           the Plan,
during the period such Optionee or purchaser has one or more Options
          outstanding, and in the case of an individual who acquired Shares pursuant to
          the Plan, during the period such individual owns such Shares. The Company shall
          not be required to provide such information if the issuance of Options under
the           Plan is limited to key employees whose duties in connection with the
Company           assure their access to equivalent information.  















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