Exhibit 4.3


 


FORM
OF


Stock
Option Agreement under


Tecogen
Inc. 2006 Stock Incentive Plan


 


Tecogen Inc. (the “Company”)
hereby grants the following stock option pursuant to the Tecogen Inc. 2006 Stock Incentive Plan.
The terms and conditions attached hereto are also a part hereof.


 


	
        Name of optionee (the “Optionee”):

         
	 
	
        Date of this option grant:

         
	 
	Number of shares of the Company’s Common Stock subject to this option (“Shares”):	 
	
        Option exercise price per Share:

         
	 
	Number, if any, of Shares that may be purchased on or after the grant date:	 
	
        Shares that are subject to vesting schedule:

         
	 
	
        Vesting Start Date:

         
	 
	
        Vesting Schedule: 25% of the Shares vest on the Vesting Start
        Date, and then an additional 25% of the Shares vest on each of the subsequent three anniversaries of the Vesting Start Date. In
        the event of an Acquisition, the Shares will vest in accordance with Section 3(b).

         

	
        All vesting is dependent on the continuation
        of a Business Relationship with the Company, as provided herein.

         

	
        The exercise price may be paid by the forms
        of payment specified in Section 7(a).

         



 


This option satisfies in full all commitments
that the Company has to the Optionee with respect to the issuance of stock, stock options or other equity securities.


 


	Tecogen Inc.	 	 	 
	 	 	 	 	 
	By:	 	 	Signature:	 
	 	 	 	 	 
	John N. Hatsopoulos	 	Name:	 
	Chief Executive Officer	 	 	 
	 	 	 	Address:	 
	 	 	 	 	 
	 	 	 	 	 


 



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Stock
Option Agreement


2006
Stock Incentive Plan


 


1.          Grant
Under Plan. This option is granted pursuant to and is governed by the Tecogen Inc. 2006 Stock Incentive
Plan (the “Plan”) and, unless the context otherwise requires, terms used herein shall have the same meaning
as in the Plan.


 


2.          Grant
as Non-Qualified Stock Option. This option is not intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”).


 


3.          Vesting
of Option.


 


(a)          Vesting
if Business Relationship Continues. The Optionee may exercise this option on or after the date of this option grant for the
number of shares of Common Stock, if any, set forth on the cover page hereof. If the Optionee has continuously maintained a Business
Relationship (as defined below) with the Company through the dates listed on the vesting schedule set forth on the cover page hereof,
the Optionee may exercise this option for the additional number of shares of Common Stock set opposite the applicable vesting date.
Notwithstanding the foregoing, the Board may, in its discretion, accelerate the date that any installment of this option becomes
exercisable. The foregoing rights are cumulative and may be exercised only before the date which is five years from
the date of this option grant.


 


(b)  Accelerated
Vesting Due to Acquisition. In the event an Acquisition that is not a Private Transaction occurs while the Optionee maintains
a Business Relationship with the Company and this option has not fully vested, this option shall become exercisable for 100% of
the then number of Shares as to which it has not vested, such vesting to occur immediately prior to the closing of the Acquisition.


 


(c) Definitions. The following
definitions shall apply:


 


“Acquisition”
means (i) the sale of the Company by merger in which the shareholders of the Company in their capacity as such no longer own a
majority of the outstanding equity securities of the Company (or its successor); or (ii) any sale of all or substantially all of
the assets or capital stock of the Company (other than in a spin-off or similar transaction) or (iii) any other acquisition of
the business of the Company, as determined by the Board.


 


“Business Relationship”
means service to the Company or its successor in the capacity of an employee, officer, director or consultant.


 


“Private Transaction”
means any Acquisition where the consideration received or retained by the holders of the then outstanding capital stock of the
Company does not consist of (i) cash or cash equivalent consideration, (ii) securities which are registered under the Securities
the Securities Act of 1933, as amended, or any successor statute (the “Securities Act”) and/or (iii) securities
for which the Company or any other issuer thereof has agreed, including pursuant to a demand, to file a registration statement
within ninety (90) days of completion of the transaction for resale to the public pursuant to the Securities Act.


 


4.          Termination
of Business Relationship.


 


(a)          Termination.
If the Optionee’s Business Relationship with the Company ceases, voluntarily or involuntarily, with or without cause, no
further installments of this option shall become exercisable, and this option shall expire (may no longer be exercised) after the
passage of 30 days from the date of termination, but in no event later than the scheduled expiration date. Any determination
under this agreement as to the status of a Business Relationship or other matters referred to above shall be made in good faith
by the Board.


 



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(b)          Employment
Status. For purposes hereof, with respect to employees of the Company, employment shall not be considered as having terminated
during any leave of absence if such leave of absence has been approved in writing by the Company and if such written approval
contractually obligates the Company to continue the employment of the Optionee after the approved period of absence; in the event
of such an approved leave of absence, vesting of this option shall be suspended (and the period of the leave of absence shall be
added to all vesting dates) unless otherwise provided in the Company’s written approval of the leave of absence. For purposes
hereof, a termination of employment followed by another Business Relationship shall be deemed a termination of the Business Relationship
with all vesting to cease unless the Company enters into a written agreement related to such other Business Relationship in which
it is specifically stated that there is no termination of the Business Relationship under this agreement. This option shall not
be affected by any change of employment within or among the Company and its Subsidiaries so long as the Optionee continuously remains
an employee of the Company or any Subsidiary.


 


5.          Death;
Disability.


 


(a)          Death.
Upon the death of the Optionee while the Optionee is maintaining a Business Relationship with the Company, this option may be exercised,
to the extent otherwise exercisable on the date of the Optionee’s death, by the Optionee’s estate, personal representative
or beneficiary to whom this option has been transferred pursuant to Section 10, only at any time within 12 months after the
date of death, but not later than the scheduled expiration date.


 


(b)          Disability.
If the Optionee ceases to maintain a Business Relationship with the Company by reason of his or her disability, this option may
be exercised, to the extent otherwise exercisable on the date of cessation of the Business Relationship, only at any time within
12 months after such cessation of the Business Relationship, but not later than the scheduled expiration date. For purposes hereof,
“disability” means “permanent and total disability” as defined in Section 22(e) (3) of the
Code.


 


6.          Partial
Exercise. This option may be exercised in part at any time and from time to time within the above limits, except that this
option may not be exercised for a fraction of a share.


 


7.          Payment
of Exercise Price.


 


(a)          Payment
Options. The exercise price shall be paid by one or any combination of the following forms of payment that are applicable to
this option, as indicated on the cover page hereof:


 


(i)          by
check payable to the order of the Company; or


 


(ii)         provided
that the Company’s Common Stock is then listed on a securities exchange, including the Nasdaq Global Market, or on the Over-the-Counter
Bulletin Board, by delivery of an irrevocable and unconditional undertaking, satisfactory in form and substance to the Company,
by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, or delivery by the Optionee
to the Company of a copy of irrevocable and unconditional instructions, satisfactory in form and substance to the Company, to a
creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price;


 


8.          Securities
Laws Restrictions on Resale. Until registered under the Securities Act, the Shares will be illiquid and will be deemed to be
“restricted securities” for purposes of the Securities Act. Accordingly, such shares must be sold in compliance with
the registration requirements of the Securities Act or an exemption therefrom and may need to be held indefinitely. Unless the
Shares have been registered under the Securities Act, each certificate evidencing any of the Shares shall bear a restrictive legend
specified by the Company.


 



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9.          Method
of Exercising Option. Subject to the terms and conditions of this agreement, this option may be exercised by written notice
to the Company at its principal executive office, or to such transfer agent as the Company shall designate. Such notice shall state
the election to exercise this option and the number of Shares for which it is being exercised and shall be signed by the person
or persons so exercising this option. Such notice shall be accompanied by payment of the full purchase price of such shares, and
the Company shall deliver a certificate or certificates representing such shares as soon as practicable after the notice shall
be received. Such certificate or certificates shall be registered in the name of the person or persons so exercising this option
(or, if this option shall be exercised by the Optionee and if the Optionee shall so request in the notice exercising this option,
shall be registered in the name of the Optionee and another person jointly, with right of survivorship). In the event this option
shall be exercised, pursuant to Section 5 hereof, by any person or persons other than the Optionee, such notice shall be accompanied
by appropriate proof of the right of such person or persons to exercise this option.


 


10.         Option
Not Transferable. This option is not transferable or assignable except by will or by the laws of descent and distribution.
During the Optionee’s lifetime only the Optionee can exercise this option.


 


11.         No
Obligation to Exercise Option. The grant and acceptance of this option imposes no obligation on the Optionee to exercise it.


 


12.         No
Obligation to Continue Business Relationship. Neither the Plan, this agreement, nor the grant of this option imposes any obligation
on the Company to continue the Optionee in employment or other Business Relationship.


 


13.         Adjustments.
Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment
shall be made for dividends or similar rights for which the record date is prior to such date of exercise.


 


14.         Withholding
Taxes. If the Company in its discretion determines that it is obligated to withhold any tax in connection with the exercise
of this option, or in connection with the transfer of, or the lapse of restrictions on, any Common Stock or other property acquired
pursuant to this option, the Optionee hereby agrees that the Company may withhold from the Optionee’s wages or other remuneration
the appropriate amount of tax. At the discretion of the Company, the amount required to be withheld may be withheld in cash from
such wages or other remuneration or in kind from the Common Stock or other property otherwise deliverable to the Optionee on exercise
of this option. The Optionee further agrees that, if the Company does not withhold an amount from the Optionee’s wages or
other remuneration sufficient to satisfy the withholding obligation of the Company, the Optionee will make reimbursement on demand,
in cash, for the amount underwithheld.


 


15.         Lock-up
Agreement. The Optionee agrees that in the event that the Company effects an initial underwritten public offering of Common
Stock registered under the Securities Act, the Shares may not be sold, offered for sale or otherwise disposed of, directly or indirectly,
without the prior written consent of the managing underwriter(s) of the offering, for such period of time after the execution of
an underwriting agreement in connection with such offering that all of the Company’s then directors and executive officers
agree to be similarly bound.


 


16.         Arbitration.
Any dispute, controversy, or claim arising out of, in connection with, or relating to the performance of this agreement or its
termination shall be settled by arbitration in Boston, Massachusetts, pursuant to the rules then obtaining of the American Arbitration
Association. Any award shall be final, binding and conclusive upon the parties and a judgment rendered thereon may be entered in
any court having jurisdiction thereof.


 


17.         Provision
of Documentation to Optionee. By signing this agreement the Optionee acknowledges receipt of a copy of this agreement and a
copy of the Plan.


 



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18.         Miscellaneous.


 


(a)          Notices.
All notices hereunder shall be in writing and shall be deemed given when sent by mail, if to the Optionee, to the address set forth
below or at the address shown on the records of the Company, and if to the Company, to the Company’s principal executive
offices, attention of the Corporate Secretary.


 


(b)          Entire
Agreement; Modification. This agreement constitutes the entire agreement between the parties relative to the subject matter
hereof, and supersedes all proposals, written or oral, and all other communications between the parties relating to the subject
matter of this agreement. This agreement may be modified, amended or rescinded only by a written agreement executed by both parties.


 


(c)          Fractional
Shares. If this option becomes exercisable for a fraction of a share because of the adjustment provisions contained in the
Plan, such fraction shall be rounded down.


 


(d)          Issuances
of Securities; Changes in Capital Structure. Except as expressly provided herein or in the Plan, 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 subject to this option. No adjustments need be made
for dividends paid in cash or in property other than securities of the Company. If there shall be any change in the Common Stock
of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange
of shares, spin-off, split-up or other similar change in capitalization or event, the restrictions contained in this agreement
shall apply with equal force to additional and/or substitute securities, if any, received by the Optionee in exchange for, or by
virtue of his or her ownership of, Shares, except as otherwise determined by the Board.


 


(e)          Severability.
The invalidity, illegality or unenforceability of any provision of this agreement shall in no way affect the validity, legality
or enforceability of any other provision.


 


(f)          Successors
and Assigns. This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns, subject to the limitations set forth in Section 10 hereof.


 


(g)          Governing
Law. This agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, without giving
effect to the principles of the conflicts of laws thereof.


 



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