Exhibit 10.13


 


QUARK BIOTECH, INC. 


 


1997 STOCK PLAN


 


STOCK OPTION AGREEMENT


 


Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Option Agreement.


 


I.              NOTICE OF STOCK OPTION GRANT


 


The
undersigned Optionee has been granted an Option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:


 


	
  Date of Grant

  	
   

  	
  «                   »

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date

  	
   

  	
  «     »

  
	
   

  	
   

  	
   

  
	
  Exercise Price
  per Share

  	
   

  	
  $«               »

  
	
   

  	
   

  	
   

  
	
  Total Number of
  Shares Granted

  	
   

  	
  «             »

  
	
   

  	
   

  	
   

  
	
  Total Exercise
  Price

  	
   

  	
  $«                    »
  USD

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  o
  

  	
  Incentive Stock
  Option

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o
  

  	
  Nonstatutory
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Term/Expiration
  Date:

  	
   

  	
  «                             »

  



 


Vesting
Schedule:


 


This
Option shall be exercisable, in whole or in part, according to the following
vesting schedule:


 


«                             »


 


 

















 


Termination
Period:


 


This
Option shall be exercisable for three months after Optionee ceases to be a
Service Provider. Upon Optionee’s death or Disability, this Option may be
exercised for one year after Optionee ceases to be a Service Provider. In no
event may Optionee exercise this Option after the Term/Expiration Date as
provided above.


 


II.            AGREEMENT


 


1.             Grant of Option.
The Plan Administrator of the Company hereby grants to the Optionee named in
the Notice of Grant (the “Optionee”), an option (the “Option”) to purchase the
number of Shares set forth in the Notice of Grant, at the exercise price per
Share set forth in the Notice of Grant (the “Exercise Price”), and subject to
the terms and conditions of the Plan, which is incorporated herein by reference.
Subject to Section 14(c) of the Plan, in the event of a conflict between the
terms and conditions of the Plan and this Option Agreement, the terms and
conditions of the Plan shall prevail.


 


If
designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code. Nevertheless, to the extent that it exceeds the
$100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option (“NSO”).


 


2.             Exercise of Option.


 


(a)           Right to Exercise.
This Option shall be exercisable during its term in accordance with the Vesting
Schedule set out in the Notice of Grant and with the applicable provisions of
the Plan and this Option Agreement.


 


(b)           Method of Exercise.
This Option shall be exercisable by delivery of an exercise notice in the form
attached as Exhibit A (the  ̃Exercise Notice ̃) which shall state the election to
exercise the Option, the number of Shares with respect to which the Option is
being exercised, and such other representations and agreements as may be
required by the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by the aggregate Exercise Price.


 


No
Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise complies with Applicable laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.


 


3.             Optionee’s
Representations. In the event the Shares have 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 hereto as Exhibit B.


 

















 


4.             Lock-Up Period.
Optionee hereby agrees that, if so requested by the Company or any
representative of the underwriters (the “Managing Underwriter”) in connection
with any registration of the offering of any securities of the Company under
the Securities Act, Optionee shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period (or such other period
as may be requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the “Market Standoff Period”) following the effective
date of a registration statement of the Company filed under the Securities Act.
Such restriction shall apply only to the first registration statement of the
Company to become effective under the Securities Act that includes securities
to be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.


 


5.             Method of Payment.
Payment of the aggregate Exercise Price shall be by any of the following, or a
combination thereof, at the election of the Optionee:


 


(a)           cash or check;


 


(b)           consideration received
by the Company under a formal cashless exercise program adopted by the Company
in connection with the Plan; or


 


(c)           surrender of other
Shares which, (i) in the case of Shares acquired upon exercise of an option,
have been owned by the Optionee for more than six (6) months on the date of
surrender, and (ii) have a Fair Market Value on the date of surrender equal to
the aggregate Exercise Price of the Exercised Shares.


 


6.             Restrictions on
Exercise. This Option may not be exercised until such time as the Plan has
been approved by the shareholders of the Company, or if the issuance of such
Shares upon such exercise or the method of payment of consideration for such
shares would constitute a violation of any Applicable Law.


 


7.             Non-Transferability
of Option. This Option may not be transferred in any manner otherwise than
by will or by the laws of descent or distribution and may be exercised during
the lifetime of Optionee only by Optionee. The terms of the Plan and this
Option Agreement shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.


 


8.             Term of Option.
This Option may be exercised only within the term set out in the Notice of
Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Option.


 


9.             Tax Consequences.
Set forth below is a brief summary as of the date of this Option of some of the
federal tax consequences of exercise of this Option and disposition of the
Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.


 


(a)           Exercise of ISO.
If this Option qualifies as an ISO, there will be no regular federal income tax
liability upon the exercise of the Option, although the excess, if any, 


 

















 


of the Fair Market Value of the
Shares on the date of exercise over the Exercise Price will be treated as an
adjustment to the alternative minimum tax for federal tax purposes and may
subject the Optionee to the alternative minimum tax in the year of exercise.


 


(b)           Exercise of
Nonstatutory Stock Option. There may be a regular federal income tax
liability upon the exercise of a Nonstatutory Stock Option. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. If Optionee is an Employee or
a former Employee, the Company will be required to withhold from Optionee’s
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.


 


(c)           Disposition of
Shares. In the case of an NSO, if Shares are held for at least one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes. In the case of an ISO, if Shares
transferred pursuant to the Option are held for at least one year after
exercise and of at least two years after the Date of Grant, any gain realized
on disposition of the Shares will also be treated as long-term capital gain for
federal income tax purposes. If Shares purchased under an ISO are disposed of
within one year after exercise or two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (1) the Fair Market Value of the Shares on the date of
exercise, or (2) the sale price of the Shares. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.


 


(d)           Notice of
Disqualifying Disposition of ISO Shares. If the Option granted to Optionee
herein is an ISO, and if Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (1) the date two
years after the Date of Grant, or (2) the date one year after the date of
exercise, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.


 


10.           Entire Agreement;
Governing Law. The Plan is incorporated herein by reference. The Plan and
this Option Agreement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and Optionee. This
agreement is governed by the internal substantive laws but not the choice of
law rules of the State of California.


 


11.           No Guarantee of
Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS
A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING
HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE


 

















 


FURTHER ACKNOWLEDGES AND AGREES
THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR
THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER
AT ANY TIME, WITH OR WITHOUT CAUSE.


 


Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof. Optionee has reviewed the
Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option and fully understands all
provisions of the Option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the Plan or this Option. Optionee further agrees to
notify the Company upon any change in the residence address indicated below.


 


	
  OPTIONEE:

  	
   

  	
  QUARK BIOTECH, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By Daniel Zurr

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
  Its President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Residence Address

  	
   

  	
   

  



 

















 


EXHIBIT A


 


1997 STOCK PLAN


 


EXERCISE NOTICE


 


Quark Biotech, Inc.


1059 Serpentine Lane


Pleasanton, CA 94566


 


Attention: 
President


 


1.             Exercise of Option.
Effective as of today,                   ,
         , the undersigned (“Optionee”)
hereby elects to exercise Optionee’s option to purchase                 
shares of the Common Stock (the “Shares”) of Quark Biotech, Inc. (the “Company”)
under and pursuant to the 1997 Stock Plan (the “Plan”) and the Stock Option
Agreement dated                ,          (the
“Option Agreement”).


 


2.             Delivery of
Payment. Purchaser herewith delivers to the Company the full purchase price
of the Shares, as set forth in the Option Agreement.


 


3.             Representations of
Optionee. Optionee acknowledges that Optionee has received, read and
understood the Plan and the Option Agreement and agrees to abide by and be
bound by their terms and conditions.


 


4.             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. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date of issuance except as provided in Section 12 of the Plan.


 


5.             Company’s Right of
First Refusal. Before any Shares held by Optionee or any transferee (either
being sometimes referred to herein as the “Holder”) may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company or
its assignee(s) shall have a right of first refusal to purchase the Shares on
the terms and conditions set forth in this Section (the “Right of First Refusal”).


 


(a)           Notice of Proposed
Transfer. The Holder of the Shares shall deliver to the Company a written
notice (the “Notice”) stating:  (i) the
Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii)
the name of each proposed purchaser or other transferee (“Proposed Transferee”);
(iii) the number of Shares to be transferred to each Proposed Transferee; and
(iv) the bona fide cash price or other consideration for which the Holder
proposes to transfer the Shares (the “Offered Price”), and the Holder shall
offer the Shares at the Offered Price to the Company or its assignee(s).


 

















 


(b)           Exercise of Right of
First Refusal. At any time within thirty (30) days after receipt of the
Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to
be transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with subsection (c) below.


 


(c)           Purchase Price. The
purchase price (“Purchase Price”) for the Shares purchased by the Company or
its assignee(s) under this Section shall be the Offered Price. If the Offered
Price includes consideration other than cash, the cash equivalent value of the
non-cash consideration shall be determined by the Board of Directors of the
Company in good faith.


 


(d)           Payment. Payment
of the Purchase Price shall be made, at the option of the Company or its
assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of
repurchase by an assignee, to the assignee), or by any combination thereof
within 30 days after receipt of the Notice or in the manner and at the times
set forth in the Notice.


 


(e)           Holder’s Right to
Transfer. If all of the Shares proposed in the Notice to be transferred to
a given Proposed Transferee are not purchased by the Company and/or its
assignee(s) as provided in this Section, then the Holder may sell or otherwise
transfer such Shares to that Proposed Transferee at the Offered Price or at a
higher price, provided that such sale or other transfer is consummated within
120 days after the date of the Notice, that any such sale or other transfer is
effected in accordance with any applicable securities laws and that the
Proposed Transferee agrees in writing that the provisions of this Section shall
continue to apply to the Shares in the hands of such Proposed Transferee. If
the Shares described in the Notice are not transferred to the Proposed
Transferee within such period, a new Notice shall be given to the Company, and
the Company and/or its assignees shall again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.


 


(f)            Exception for
Certain Family Transfers. Anything to the contrary contained in this
Section notwithstanding, the transfer of any or all of the Shares during the
Optionee’s lifetime or on the Optionee’s death by will or intestacy to the
Optionee’s immediate family or a trust for the benefit of the Optionee’s
immediate family shall be exempt from the provisions of this Section. “Immediate
Family” as used herein shall mean spouse, lineal descendant or antecedent,
father, mother, brother or sister. In such case, the transferee or other
recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.


 


(g)           Termination of Right
of First Refusal. The Right of First Refusal shall terminate as to any
Shares upon the first sale of Common Stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended.


 

















 


6.             Tax Consultation.
Optionee understands that Optionee may suffer adverse tax consequences as a
result of Optionee’s purchase or disposition of the Shares. Optionee represents
that Optionee has consulted with any tax consultants Optionee deems advisable
in connection with the purchase or disposition of the Shares and that Optionee
is not relying on the Company for any tax advice.


 


7.             Restrictive
Legends and Stop-Transfer Orders.


 


(a)           Legends. Optionee
understands and agrees that the Company shall cause the legends set forth below
or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal 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 COMPANY COUNSEL 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 A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS
ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE 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 AND RIGHT OF FIRST
REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.


 


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


 


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


 

















 


8.             Successors and
Assigns. The Company may assign any of its rights under this Agreement to
single or multiple assignees, and this Agreement shall inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this Agreement shall be binding upon Optionee and
his or her heirs, executors, administrators, successors and assigns.


 


9.             Interpretation.
Any dispute regarding the interpretation of this Agreement shall be submitted
by Optionee or by the Company forthwith to the Administrator which shall review
such dispute at its next regular meeting. The resolution of such a dispute by
the Administrator shall be final and binding on all parties.


 


10.           Governing Law;
Severability. This Agreement is governed by the internal substantive laws
but not the choice of law rules, of the State of California.


 


11.           Entire Agreement.
The Plan and Option Agreement are incorporated herein by reference. This
Agreement, the Plan, the Option Agreement and the Investment Representation
Statement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee.


 


	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  QUARK BIOTECH, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By Daniel Zurr

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Its President

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  



 

















 


EXHIBIT B


 


INVESTMENT REPRESENTATION STATEMENT


 


OPTIONEE:


 


COMPANY:          QUARK BIOTECH, INC.


 


SECURITY:           COMMON STOCK


 


AMOUNT:


 


DATE:


 


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


 


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


 


(b)           Optionee
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have 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 Optionee’s investment
intent as expressed herein. In this connection, Optionee understands that, in
the view of the Securities and Exchange Commission, the statutory basis for
such exemption may be unavailable if Optionee’s 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. Optionee further
understands that the Securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company and any other legend required under applicable
state securities laws.


 

















 


(c)           Optionee
is 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 the grant
of the Option to the Optionee, the exercise will be exempt from registration
under the Securities Act. In the event the Company becomes subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, ninety (90) days thereafter (or such longer period as any market
stand-off agreement may require) the Securities exempt under Rule 701 may be
resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including:  (1) the resale
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, (3) the amount of
Securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), and (4) the timely filing of a Form 144,
if applicable.


 


In the
event that the Company does not qualify under Rule 701 at the time of grant of
the Option, then the Securities may be resold in certain limited circumstances
subject to the provisions of Rule 144, which requires the resale to occur not
less than one year after the later of the date the Securities were sold by the
Company or the date the Securities were sold by an affiliate of the Company,
within the meaning of Rule 144; and, in the case of acquisition of the Securities
by an affiliate, or by a non-affiliate who subsequently holds the Securities
less than two years, the satisfaction of the conditions set forth in sections
(1), (2), (3) and (4) of the paragraph immediately above.


 


(d)           Optionee
further understands that in the event all of the applicable requirements of
Rule 701 or 144 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 Rules 144 and 701 are not
exclusive, the Staff of the Securities and Exchange Commission has expressed
its opinion that persons proposing to sell private placement securities other
than in a registered offering and otherwise than pursuant to Rules 144 or 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. Optionee understands that no assurances can be given that any such
other registration exemption will be available in such event.


 


	
   

  	
   

  	
  Signature of Optionee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
  ,