Document:

Exhibit
10.37

VI
ACQUISITION CORP.

400
West 48th Avenue

Denver,
Colorado 80216

Ms. Debra Koenig

23 Foxtail Circle

Englewood, Colorado
80113-4125

Re:          Repurchase
of Securities

Dear Debra:

Pursuant
to the terms of Management Agreements, dated June 13, 2003 and March 3, 2004
(the “Management Agreements”), each between VI Acquisition Corp. (the “Company”)
and you, you acquired shares of the Company’s Common Stock (the “Common Stock”)
and Series A Preferred Stock (the “Preferred Stock”).  Pursuant to the terms of the Management
Agreements, the Company has the right, but not the obligation, to repurchase
all or any part of your Common Stock and Preferred Stock.

You
and the Company determined that it is your mutual best interests to not follow
the formal terms of the Management Agreements regarding the repurchase of your
Common Stock and Preferred Stock, but instead determined to negotiate an
overall agreement regarding a repurchase of all of your Common Stock and
Preferred Stock. This letter will formalize the agreement reached between the
Company and you in connection with the Common Stock and Preferred Stock of the
Company currently owned by you.  Each of
you and the Company acknowledge that the parties would not have entered into
this agreement unless all of your equity securities were to be purchased.  This letter is to confirm the terms by which
such repurchases shall be effectuated. 
The securities of the Company that are being repurchased (the “Purchased
Shares”) are:

(i)            89,825 shares of the Company’s
Common Stock reflecting the incentive common stock purchased by you and 19,080
shares of the Common Stock reflecting the co-invest common stock purchased by
you, all as evidenced by Certificates C-8, C-16 and C-42; and

(iii)          1094.670 shares of the Company’s
Preferred Stock, all as evidenced by Certificate P-8.

The
total principal amount to be paid to you for the Purchased Shares will be
$1,203,575.

The
closing date for the purchase of the Purchased Shares will be June 22, 2007 at
the Company’s offices at 400 West 48th Avenue, Denver, Colorado.  On or before the closing date, the Company
will deliver to you, or provide to you via overnight courier, a Subordinated
Promissory Note in the principal amount of $1,203,575, in the form already
agreed upon by the Company and you, and which is attached hereto.  Prior to the closing date, please deliver to
us

the enclosed
Assignment Separate from Certificate with respect to the 108,905 shares of
Common Stock and 1094.670 shares of Preferred Stock.

In
connection with the Company’s purchase of the Purchased Shares, you represent
and warrant to the Company that:

(i)            You are the record and beneficial
owner of the Purchased Shares and you have good and marketable title to the
Purchased Shares, free and clear of all security interests, claims, liens,
pledges, options, encumbrances, charges, agreements, voting trusts, preemptive
rights, proxies and other arrangements or restrictions whatsoever (“Encumbrances”).  All of the Purchased Shares are validly
issued, fully paid and nonassessable and you shall transfer to the Company good
and marketable title to the shares, free and clear of all Encumbrances.

(ii)           Other than the Purchased Shares being
repurchased herein, you own no other shares or other equity in the Company and
you do not own or have rights to any options, warrants or other rights to
subscribe for or purchase any securities of the Company.

(iii)          You have been an executive officer of
the Company, are knowledgeable about the Company’s operations and financial
condition and have had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the repurchase of the
Purchased Shares and you acknowledge that you have the right and opportunity to
consult with counsel regarding the terms and conditions set forth herein.

(iv)          This letter agreement, when executed
and delivered, shall constitute your valid and legally binding obligation,
enforceable in accordance with its terms, and neither the Company, nor any
other party, made any representations concerning the terms of the repurchase
other than those contained herein.

(v)           The execution, delivery and
performance of this letter agreement by you does not conflict with, violate or
result in the breach of, or create any lien or encumbrance on the Purchased
Shares pursuant to any agreement, instrument, order, judgment, decree, law or
governmental regulation to which you are a party or are subject or by which the
Purchased Shares are bound (except for federal and state securities laws).

(vi)          No representation or warranty by you
in this letter agreement or in any written statement or certificate which was
furnished by you to the Company pursuant to this letter agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements made not misleading. 
You are not aware of any material fact relating to the Purchased Shares
or the transaction contemplated by this letter agreement which has not been
disclosed by you to the Company.

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You
hereby release and discharge the Company and its subsidiaries, affiliates,
agents, employees, officers, directors and stockholders from and against any
and all claims, actions, grievances, suits, charges or complaints related to
the Management Agreements and any other agreement or understanding between you
and the Company, your ownership of the Purchased Shares, your rights as a
stockholder in the Company, the repurchase of the Purchased Shares and any
other matter related to Company securities or the ownership thereof or any
equity purchase arrangements.

All
representations and warranties contained herein or made in writing by you in
connection herewith shall survive the execution and delivery of this letter
agreement and the consummation of the transactions contemplated hereby,
regardless of any investigation made by the Company or on the Company’s
behalf.  You shall, as and when requested
by the Company and without further consideration, execute and deliver all such
instruments of conveyance and transfer and shall take such further actions as
the Company may deem necessary or desirable in order to transfer the shares to
the Company.

This letter
agreement constitutes the entire agreement between the parties hereto regarding
the repurchase of the Purchased Shares. 
If you have any questions regarding this repurchase, please do not
hesitate to contact me.  Otherwise,
please execute and date this letter, and the Assignment Separate from
Certificate, where indicated, and return it to my attention.

	
  

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Walter Van
  Benthuysen

  	
   

  
	
   

  	
  Walter Van
  Benthuysen

  
	
   

  	
  VI Acquisition
  Corp.

  

 

Accepted and agreed to
this

21st day of June,
2007.

	
  /s/Debra Koenig

  	
   

  
	
  Debra Koenig

  

 

 3

ASSIGNMENT SEPARATE FROM
CERTIFICATE

FOR VALUE RECEIVED, Debra Koenig does
hereby sell, assign and transfer unto VI Acquisition Corp., a Delaware
corporation (the “Company”), (i)
108,905 shares of Common stock, $.0001 par value per share, of the Company, standing
in her name on the books of the Company, represented by Certificate
Nos. C-8, C-16 and C-42, and (ii) 1094.670 shares of Series A Preferred
stock, $.0001 par value per share, which are represented by Certificate No.
P-8, and does hereby irrevocably constitute and appoint Reed Smith LLP as her
attorney-in-fact and agent to transfer the said stock on the books of the
Company with full power of substitution in the premises.

DATED this 21st day of June, 2007.

	
  /s/ Debra Koenig

  	
   

  
	
  Debra KoenigExhibit
4.1

ANDOVER
MEDICAL, INC. 2006 EMPLOYEE STOCK

INCENTIVE PLAN

(Approved and
adopted by the Board of Directors on August 31, 2006

and amended on January 25, 2007)

STATEMENT OF PURPOSE

The Andover Medical, Inc. 2006 Employee Stock
Incentive Plan is intended to afford an incentive to employees, corporate
officers, directors, consultants and other key persons employed or retained by
ANDOVER MEDICAL, INC. (the “Company”) and its subsidiaries and affiliates to
acquire a proprietary interest in the Company and to enable the Company and its
subsidiaries and affiliates to attract and retain such persons.

DEFINITIONS

For purposes of
the Plan, the following terms are defined as set forth below:

a.                                       “10% Holder”  shall mean any person who, for purposes of
Section 422 of the Code owns more than 10% of the total combined voting power
of all classes of stock of the employer corporation or of any Subsidiary.

b.                                      “Award” means a Stock Option, Stock
Appreciation Right or Restricted Stock.

c.                                       “Board” means the Board of Directors of
the Company.

d.                                      “Change of Control” has the meaning set
forth in Section 4.3.1.

e.                                       “Code” means the Internal Revenue Code of
1986, as amended from time to time, and any successor thereto.

f.                                         “Committee” means the Committee referred
to in Section 3.1.

g.                                      “Common Stock” means common stock, par
value $.001 per share, of the Company.

h.                                      “Company” means Andover Medical, Inc., a
Delaware corporation.

i.                                          “Covered Employee” means a participant
designated prior to the grant of Restricted Stock by the Committee who is or
may be a “covered employee” within the meaning of Section 162(m)(3) of the Code
in the year in which Restricted Stock is expected to be taxable to such
participant.

j.                                          “Eligible Persons” means the Eligible
Persons referred to in Section 2 of the Plan.

k.                                       “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, and any successor thereto.

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l.                                          “Fair Market Value” means, as of any given
date, (i) if the Common Stock is listed or admitted to trade on a national
securities exchange, the closing price of the Common Stock on the Composite
Tape, as published in The Wall Street Journal, of the principal national
securities exchange on which the Common Stock is so listed or admitted to
trade, on such date, or, if there is no trading of the Common Stock on such
date, then the closing price of the Common Stock as quoted on such Composite
Tape on the next preceding date on which there was trading in such shares; (ii)
if the Common Stock is not listed or admitted to trade on a national securities
exchange, the mean between the closing bid and asked price for the Common Stock
on such date, as furnished by the National Association of Securities Dealers,
Inc. (“NASD”) Over-The-Counter Bulletin Board (the “OTCBB”); (iii) if the Common
Stock is not listed or admitted to trade on a national securities exchange and
closing bid and asked prices are not furnished by the OTCBB, the mean between
the closing bid and asked price for the Common Stock on such date, as furnished
by the Pink Sheets, LLC (“Pink Sheets”) or similar organization; and (iv) if
the stock is not listed or admitted to trade on a national securities exchange
and if bid and asked prices for the Common Stock are not furnished by the
OTCBB, Pink Sheets or a similar organization, the value established in good
faith by the Committee taking into account such facts and circumstances deemed
to be material by the Committee to the value of the Common Stock in the hands
of the Eligible Person.

Notwithstanding the foregoing, for purposes of granted
Non-Qualified Stock Options or Stock Appreciation Rights, Fair Market Value of
Common Stock shall be determined in accordance with the requirements of Code
Section 409A, and for purposes of granting Incentive Stock Options, Fair Market
Value of Common Stock shall be determined in accordance with the requirements
of Code Section 422.

m.                                    “Incentive Stock Option” means any Stock
Option designated as, and intended to qualify as, an “incentive stock option”
within the meaning of Section 422 of the Code.

n.                                      “Non-Qualified Stock Option” means any
Stock Option that is not an Incentive Stock Option.

o.                                      “Performance Goals” means the performance
goals established by the Committee in connection with the grant of Restricted
Stock.

p.                                      “Plan” means the Andover Medical, Inc.
2006 Employee Stock Incentive Plan, as set forth herein and as hereinafter
amended from time to time.

q.                                      “Qualified Performance-Based Award” means
an Award of Restricted Stock designated as such by the Committee at the time of
grant, based upon a determination that (i) the recipient is or may be a “covered
employee” within the meaning of Section 162(m)(3) of the Code in the year in
which the Company would expect to be able to claim a tax deduction with respect
to such Restricted Stock and (ii) the Committee wishes such Award to qualify
for the Section 162(m) Exemption.

r.                                         “Restricted Stock” means an Award granted
under Section 6.

s.                                       “Section 162(m) Exemption” means the
exemption from the limitation on deductibility imposed by Section 162(m) of the
Code that is set forth in Section 162(m)(4)(C) of the Code.

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t.                                         “Stock Appreciation Right” means an Award
granted under Section 5.

u.                                      “Stock Option” means an Award granted
under Section 4.

v.                                      “Subsidiary” shall have the meaning given
to the term “Subsidiary corporation” in Section 424(f) of the Code.

w.                                    “Termination of Employment” means the
termination of the participant’s employment with the Company and any of its
Subsidiaries. A participant employed by a Subsidiary shall also be deemed to
incur a Termination of Employment if the Subsidiary ceases to be such a
Subsidiary, and the participant does not immediately thereafter become an
employee of the Company or another Subsidiary. Temporary absences from
employment because of illness, vacation or leave of absence and transfers among
the Company and its Subsidiaries shall not be considered Terminations of
Employment. If so determined by the Committee, a participant shall be deemed
not to have incurred a Termination of Employment if the participant enters into
a contract with the Company or a Subsidiary providing for the rendering by the
participant of consulting services to the Company or such Subsidiary on terms
approved by the Committee; however, Termination of Employment of the
participant shall occur when such contract ceases to be in effect.

In addition, certain other terms used herein have
definitions given to them in the first place in which they are used.

STATEMENT OF THE PLAN

1.                                      Shares
Subject to the Plan.

Subject to the provisions of Section 7, the maximum
number of shares of shares which may be issued under the Plan shall be fifteen
million (15,000,000) shares of Common Stock, par value $.001 per share, of the
Company (the “Shares”). The Company shall at all times while the Plan is in
effect reserve such number of shares of Common Stock as will be sufficient to
satisfy the requirements of outstanding Awards granted under the Plan. The
Shares subject to the Plan shall be either authorized and unissued shares or
treasury shares of Common Stock.  If any
Award is forfeited, or if any Stock Option (and related Stock Appreciation
Right, if any) terminates, expires or lapses 
for any reason without having been exercised in full or shall cease for
any reason to be exercisable in whole or in part, or if any Stock Appreciation
Right is exercised for cash, the unpurchased Shares subject to such Awards
shall again be available for distribution under the Plan.  No more than 40% of the shares of Common
Stock available for grant under the Plan as of the first day of any calendar
year in which the Plan is in effect shall be utilized in that fiscal year for
the grant of Awards in the form of Restricted Stock.

2.                                      Eligibility.

Awards may be granted only to employees, salaried
officers and other key persons employed or retained by the Company or its
Subsidiaries, and any non-employee director, consultant, vendor or other
individual having a business relationship with the Company or its Subsidiaries
to the extent not prohibited by law (“Eligible Persons”). As used in this Plan,
the term “Subsidiaries” shall include Subsidiaries of a Subsidiary.

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3.                                      Administration
of the Plan.

3.1.                              The Plan shall be
administered either by either the full Board of Directors or by a committee
(either the full Board or the committee is referred to hereinafter as the “Committee”)
composed of at least two non-employee directors, each of whom shall be a
disinterested person, as defined by Rule 16b-3(c)(2)(i) under the Exchange Act,
which Committee shall be appointed by and serve at the pleasure of the Board.
Within the limits of the express provisions of the Plan, the Committee shall
have the authority to determine, in its absolute discretion, (i) the
individuals to whom, and the time or times at which Awards shall be granted,
(ii) whether and to what extent Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights and Restricted Stock or any combination
thereof are to be granted hereunder, (iii) the number of Shares to be covered
by each Award granted hereunder, (iv) subject to Sections 4.7 and 6.3(G), the
terms and conditions of any Award granted hereunder including, but not limited
to, the option price, any vesting condition, restriction or limitation (which
may be related to the performance of the participant, the Company or any
Subsidiary), and any vesting, acceleration, forfeiture or waiver regarding any
Award and the shares of Common Stock relating thereto, (v) modify, amend or
adjust the terms and conditions of any Award, at any time or from time to time,
including but not limited to, Performance Goals; provided, however,
that the Committee may not adjust upwards the amount payable with respect to
Qualified Performance-Based Awards or waive or alter the Performance Goals
associated therewith or cause such Restricted Stock to vest earlier than
permitted by Section 6.3(G); (vi) to what extent and under what circumstances
Common Stock and other amounts payable with respect to an Award shall be
deferred; and (vii) under what circumstances an Award may be settled in cash or
Common Stock under Sections 6.3(B) and 10.2, provided, however, that the Committee shall not
have such power to the extent that the mere possession (as opposed to the
exercise) of such power would result in adverse tax consequences to any
participant under Code Section 409A. In making such determinations, the
Committee may take into account such factors as the Committee, in its absolute
discretion, shall deem relevant. Subject to the express provisions of the Plan,
the Committee shall also have the authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the terms and provisions of the respective option instruments or agreements
(which need not be identical) and to make all other determinations and take all
other actions necessary or advisable for the administration of the Plan. The
Committee’s determinations on the matters referred to in this Section 3.1 shall
be conclusive. Any determination by a majority of the members of the Committee
shall be deemed to have been made by the whole Committee.

3.2.                              Each member of the
Committee shall be indemnified and held harmless by the Company against any
cost or expense (including counsel fees) reasonably incurred by such member, or
liability (including any sum paid in settlement of a claim with the approval of
the Company) arising out of any act or omission to act in connection with the
Plan unless arising out of such member’s own fraud or bad faith, to the extent
permitted by applicable law. Such indemnification shall be in addition to any
rights of indemnification the members may have as directors or otherwise under
the By-laws of the Company, any agreement or vote of stockholders or
disinterested directors or otherwise.

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4.                                      Stock
Options.

Stock Options may be
granted alone or in addition to other Awards. 
Stock Options granted hereunder may be either Incentive Stock Options or
Non-Qualified Stock Options.  Any Stock
Option granted hereunder shall be in such form as the Committee may from time
to time approve. Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions as the Committee shall deem desirable:

4.1.                              Stock Option Exercise Price.  Subject to adjustments in accordance with Sections
7 and 8, the exercise price of each Stock Option granted under the Plan shall
be set forth in the applicable Option Agreement, but in no event shall such
price be less than the Fair Market Value of the Shares subject to the Stock
Option on the date the Stock Option is granted. The exercise price for
Incentive Stock Options shall not be less than 100% of the Fair Market Value
per share of the Common Stock at the time the Stock Option is granted, nor less
than 110% of such Fair Market Value in the case of an Incentive Stock Option
granted to an individual who, at the time the option is granted, is a 10%
Holder. The Fair Market Value of the Shares shall be determined in good faith
by the Committee, with the approval of the Board, in accordance with the Plan
and in accordance with the requirements of Code Sections 409A and 422.

4.2.                              Maximum Stock Option Grant.  With respect to Stock Options which are
intended to qualify as Incentive Stock Options, the aggregate Fair Market Value
(determined as of the time the Stock Option is granted) of the Common Stock
with respect to which Incentive Stock Options granted to any participant
(whether under this Plan or under any other stock option plan of the Company or
its Subsidiaries) become exercisable for the first time in any calendar year,
may not exceed $100,000. The number of Shares for which any participant, in any
calendar year, may be granted Stock Options under the Plan not treated as
Incentive Stock Options shall be limited to not more than 1,250,000.   Notwithstanding the forgoing, nothing
contained in the Plan shall be construed to prohibit the grant of Stock Options
under the Plan to an Eligible Person by reason of such person holding Stock
Options to purchase shares of Common Stock or any other securities of the
Company granted otherwise than under the Plan.

4.3.                              Exercise of Stock Options.

4.3.1.                     Subject to
the provisions in this Section 4.3 and in Section 9, Stock Options may be
exercised in whole or in part.  The
Committee, in its absolute discretion, shall determine the time or times at
which any Stock Option granted under the Plan may be exercised; provided,
however, that each Stock Option:

(A)                              shall be exercisable by a
participant only if such participant was an Eligible Person (and in the case of
an Incentive Stock Option, was an employee or salaried officer of the Company
or any of its Subsidiaries) at all times beginning from the date of the grant
of the Incentive Stock Option to a date not more than three months (except as
otherwise provided in Section 8) before exercise of such Stock Option;

(B)                                may not be exercised
prior to the expiration of at least one year from the date of grant except in
the case of the death or disability of the participant or otherwise with the

 5
 

approval of the Committee or the Board of
Directors or, if the option agreement evidencing such Stock Option so provides,
upon a “Change of Control” as defined below;

(C)                                shall expire no later
than the expiration of ten years (five years in the case of an Incentive Stock
Option granted to a 10% Holder) from the date of its grant; and

(D)                               shall not be exercisable
by a participant until such participant executes and delivers a written
representation to the effect that such participant is acquiring the Common
Stock for investment and not with the intent of distributing the same (unless
such Common Stock shall be appropriately registered under the Securities Act of
1933, as amended, or exempt from registration thereunder).

A “Change of Control”
as used in this Section 4.3 shall mean any of the following:

(i)                                     any
consolidation, merger or sale of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s
stock would be converted into cash, securities or other property; or

(ii)                                  the
stockholders of the Company approve an agreement for the sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all or substantially all of the assets of the Company; or

(iii)                               any
approval by the stockholders of the Company of any plan or proposal for  the liquidation or dissolution of the
Company; or

(iv)                              the
acquisition of beneficial ownership (within the meaning of Rule  13d-3 under the Exchange Act of an aggregate
of 25% or more of the voting power of the Company’s outstanding voting
securities by any single person or group (as such term is used in Rule 13d-5
under the Exchange Act), unless such acquisition was approved by the Board of
Directors prior to the consummation thereof); or

(v)                                 the
appointment of a trustee in a Chapter 11 bankruptcy proceeding involving the
Company or the conversion of such a proceeding into a case under Chapter 7.

As a
condition of the grant of a Stock Option, the Committee, in its absolute
discretion, may require an Eligible Person to enter into an employment
agreement with the Company or any Subsidiary or affiliate of the Company
covering a period of at least one year following the grant, and if the grant
specifically requires, compliance with all terms and conditions of any such employment
agreement shall be a condition to the exercise by the participant of such
participant’s Stock Option (provided, however, that such compliance may be
waived by the Committee in its absolute discretion).

4.3.2.                     Stock Options
granted under the Plan shall be exercised by the delivery by the holder thereof
to the Company at its principal offices (to the attention of the Secretary) of
written notice of the number of Shares with respect to which the Stock Option
is being exercised, accompanied by payment in full of the Stock Option exercise
price of such Shares. The exercise price shall be payable in cash by a
certified or bank check or such other instrument as the Company may accept; provided, however, that in lieu
of payment in cash, a participant may, with

 6
 

the approval of the Company’s Board and on
the recommendation of the Committee, pay for all or part of the Shares to be
purchased upon exercise of such participant’s Stock Option by:

(A)                              tendering to the Company
shares of the Company’s Common Stock owned by such participant and having a
Fair Market Value (as determined pursuant to Section 4.1) equal to the exercise
price (or the balance thereof) applicable to such participant’s Stock Option;
or

(B)                                complying with any
exercise and sell (or cashless exercise) program which the Company has
established with a broker-dealer.

4.3.3.                     The holder of
an option shall have none of the rights of a stockholder with respect to the
Shares covered by such holder’s option until such Shares shall be issued to
such holder upon the exercise of such holder’s option.

4.4.                              Termination of Service.  In the event that the service of an
individual to whom a Stock Option has been granted under the Plan shall
terminate (otherwise than by reason of such individual’s death or total disability,
or for cause), such option may be exercised (if and to the extent that such
individual was entitled to do so at the date of termination of such individual’s
service) at any time within three months after such termination, but in no
event after the expiration of the term of the option. No option granted under
the Plan may be exercised by a participant following termination of such
participant’s employment for cause. “Termination for cause” shall mean
dismissal for dishonesty, conviction or confession of a crime punishable by law
(except minor violations), fraud, misconduct or disclosure of confidential
information. If the service of an individual to whom a Stock Option has been
granted under the Plan shall be suspended pending an investigation of whether
or not the individual shall be terminated for cause, all of the individuals
rights under any option granted hereunder likewise shall be suspended during
the period of investigation.

4.5.                              Death or Total Disability of a Stock Option Holder.  In the event of the death or total disability
of an individual to whom a Stock Option has been granted under the Plan (i)
while serving as an Eligible Person; or (ii) within three months after the
termination of such service, other than for cause, such option may be exercised
(if and to the extent that the deceased individual was entitled to do so at the
date of such individual’s death or total disability) by a legatee or legatees
of such participant under such individual’s last will and testament or by such
individual’s personal representatives or distributees, at any time within
twelve months after such individual’s death or total disability, but in no
event after the expiration of the term of the option.

As used in this Plan, the
term “total disability” refers to a mental or physical impairment of the
individual which has lasted or is expected to last for a continuous period of
twelve months or more and which causes the individual to be unable, in the
opinion of the Company and two (if more than one is required by the Company in
its sole discretion) independent physicians, to perform such individual’s
duties for the Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first day after the
Company and the two (if more than one is required by the Company in its sole
discretion) independent physicians have furnished their opinion of total
disability to the Committee.

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4.6.                              Non-transferability of Stock Options. A
Stock Option shall not be transferable otherwise than by will or the laws of
descent and distribution and is exercisable during the lifetime of the Eligible
Person only by such Eligible Person or such Eligible Person’s guardian or legal
representative. Notwithstanding the foregoing, the Committee shall have
discretionary authority to grant Stock Options which will be transferable to
members of a participant’s immediate family, including trusts for the benefit
of such family members and partnerships in which such family members are the
only partners. A transferred option would be subject to all of the same terms
and conditions as if such option had not been transferred. Upon any attempt to
transfer a Stock Option granted under this Plan otherwise than as permitted
hereunder, or upon the levy of attachment or similar process upon such option,
such option shall automatically become null and void and of no further force
and effect.

4.7.                              Evidence of Stock Option Grant.  Each option granted pursuant to the Plan
shall be evidenced by an agreement (the “Option Agreement”) which shall clearly
identify the status of the Stock Options granted thereunder (i.e., whether an
Incentive Stock Option or Non-Qualified Stock Option).  The Option Agreement shall comply in all
respects with the terms and conditions of the Plan and may contain such
additional provisions, including, without limitation, restrictions upon the
exercise of the option, as the Committee shall deem advisable.

4.8.                              4.8.                              Deferral of Stock Option Shares.  The Committee may from time to
time establish procedures pursuant to which a participant may elect to defer,
until a time or times later than the exercise of a Stock Option, receipt of all
or a portion of the shares of Common Stock subject to such Stock Option and/or
to receive cash at such later time or times in lieu of such deferred shares,
all on such terms and conditions as the Committee shall determine.  If any such deferrals are permitted, then
notwithstanding Sections 4.3.1 and 4.3.2. above, a participant who elects such
deferral shall not have any rights as a stockholder with respect to such
deferred shares unless and until shares are actually delivered to the
participant with respect thereto, except to the extent otherwise determined by
the Committee.  Notwithstanding anything
herein to the contrary, in no event will any deferral of the delivery of shares
of Common Stock or any other payment with respect to any Award be allowed if
the Committee determines, in its sole discretion, that the deferral would
result in the imposition of additional tax under Code Section 409A(a)(1)(B).

5.                                      Stock
Appreciation Rights

5.1.                              Grant and Exercise. 
Stock Appreciation Rights may be granted in conjunction with
all or part of any Stock Option granted under the Plan. In the case of a
Non-Qualified Stock Option, such rights may be granted either at or after the
time of grant of such Stock Option. In the case of an Incentive Stock Option,
such rights may be granted only at the time of grant of such Stock Option. A
Stock Appreciation Right shall terminate and no longer be exercisable upon the
termination or exercise of the related Stock Option.

A Stock Appreciation
Right may be exercised by a participant in accordance with Section 5.2 by
surrendering the applicable portion of the related Stock Option in accordance
with procedures established by the Committee. Upon such exercise and surrender,
the participant shall be entitled to receive an amount determined in the manner
prescribed in Section 5.2. Stock Options which have been so surrendered shall
no longer be exercisable to the extent the related Stock Appreciation Rights
have been exercised.

 8
 

5.2.                              Terms and Conditions. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined by
the Committee, including the following:

(A)                              Stock Appreciation Rights
shall be exercisable only at such time or times and to the extent that the
Stock Options to which they relate are exercisable in accordance with the
provisions of Section 4 and this Section 5.

(B)                                Upon the exercise of a
Stock Appreciation Right, a participant shall be entitled to receive an amount
in cash, shares of Common Stock or both, in value equal to the excess of the
Fair Market Value of one share of Common Stock over the option price per share
specified in the related Stock Option multiplied by the number of shares in
respect of which the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.

(C)                                Stock Appreciation
Rights shall be transferable only to permitted transferees of the underlying
Stock Option in accordance with Section 4.6.

(D)                               Upon the exercise of a
Stock Appreciation Right, the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been exercised for the
purpose of the limitation set forth in Section 1 on the number of shares of
Common Stock to be issued under the Plan, but only to the extent of the number
of shares covered by the Stock Appreciation Right at the time of exercise based
on the value of the Stock Appreciation Right at such time.

6.                                      Restricted
Stock

6.1.                              Administration. 
Shares of Restricted Stock may be awarded either alone or in
addition to other Awards granted under the Plan. The Committee shall determine
the Eligible Persons to whom and the time or times at which grants of
Restricted Stock will be awarded, the number of shares to be awarded to any
Eligible Person, the conditions for vesting, the time or times within which
such Awards may be subject to forfeiture and any other terms and conditions of
the Awards, in addition to those contained in Section 6.3.

6.2.                              Awards and Certificates. Shares of
Restricted Stock shall be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of one or more stock
certificates. Any certificate issued in respect of shares of Restricted Stock
shall be registered in the name of such Eligible Person and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award, substantially in the following form:

“The transferability of
this certificate and the shares of stock represented hereby are subject to the
terms and conditions (including forfeiture) of the Andover Management Services,
Inc. 2006 Employee Stock Incentive Plan and a Restricted Stock Agreement.
Copies of such Plan and Agreement are on file at the offices of Andover
Medical, Inc., 510 Turnpike Street, Suite 204, Andover, Massachusetts  01845.”

 9
 

The
Committee may require that the certificates evidencing such shares be held in
custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any Award of Restricted Stock, the participant shall
have delivered a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.

6.3.                              Terms and Conditions. Shares of Restricted
Stock shall be subject to the following terms and conditions:

(A)                              The Committee may, prior
to or at the time of grant, designate an Award of Restricted Stock as a
Qualified Performance-Based Award, in which event it shall condition the grant
or vesting, as applicable, of such Restricted Stock upon the attainment of
Performance Goals. If the Committee does not designate an Award of Restricted
Stock as a Qualified Performance-Based Award, it may also condition the grant
or vesting thereof upon the attainment of Performance Goals. Regardless of
whether an Award of Restricted Stock is a Qualified Performance-Based Award,
the Committee may also condition the grant or vesting thereof upon the
continued service of the participant. The conditions for grant or vesting and
the other provisions of Restricted Stock Awards (including without limitation
any applicable Performance Goals) need not be the same with respect to each
recipient. The Committee may at any time, in its sole discretion, accelerate or
waive, in whole or in part, any of the foregoing restrictions; provided, however, that in the
case of Restricted Stock that is a Qualified Performance-Based Award, the
applicable Performance Goals have been satisfied and further,
provided, however, that the Committee shall not have such
power to the extent that the mere possession (as opposed to the exercise) of
such power would result in adverse tax consequences to any participant under
Code Section 409A.

(B)                                Subject to the
provisions of the Plan and the Restricted Stock Agreement referred to in
Section 6.3(F), during the period, if any, set by the Committee, commencing
with the date of such Award for which such participant’s continued service is
required (the “Restriction Period”), and until the later of (i) the expiration
of the Restriction Period and (ii) the date the applicable Performance Goals
(if any) are satisfied, the participant shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber shares of Restricted Stock; provided, however, that the
foregoing shall not prevent a participant from pledging Restricted Stock as
security for a loan, the sole purpose of which is to provide funds to pay the
option price for Stock Options.

(C)                                Except as provided in
this Section 6.3(C) and Sections 6.3(A) and 6.3(B) and the Restricted Stock
Agreement, the participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a stockholder of the Company holding the class or
series of Common Stock that is the subject of the Restricted Stock, including,
if applicable, the right to vote the shares and the right to receive any
dividends. If so determined by the Committee in the applicable Restricted Stock
Agreement, (i) cash dividends on the class or series of Common Stock that is
the subject of the Restricted Stock Award shall be automatically deferred and
reinvested in additional Restricted Stock, held subject to the vesting of the
underlying Restricted Stock, or held subject to meeting Performance Goals
applicable only to dividends; and (ii) dividends payable in Common Stock shall
be paid in the form of Restricted Stock of the same class as the Common Stock
with which such dividend was paid, held subject to the vesting of the

 10
 

underlying Restricted Stock, or held subject
to meeting Performance Goals applicable only to dividends.

(D)                               Except to the extent
otherwise provided in the applicable Restricted Stock Agreement or Sections
6.3(A), 6.3(B), 6.3(E) or 8.1(D), upon a participant’s Termination of
Employment for any reason during the Restriction Period or before the
applicable Performance Goals are satisfied, all shares still subject to
restriction shall be forfeited by the participant.

(E)                                 Except to the extent
otherwise provided in Section 8.1(D), in the event that a participant retires
or such participant’s employment is involuntarily terminated, the Committee
shall have the discretion to waive, in whole or in part, any or all remaining
restrictions (other than, in the case of Restricted Stock with respect to which
a participant is a Covered Employee, satisfaction of the applicable Performance
Goals unless the Participant’s employment is terminated by reason of death or
Disability) with respect to any or all of such participant’s shares of Restricted
Stock.

(F)                                 If and when any
applicable Performance Goals are satisfied and the Restriction Period expires
without a prior forfeiture of the Restricted Stock, unlegended certificates for
such shares shall be delivered to the participant upon surrender of the
legended certificates.

(G)                                Each Award shall be
confirmed by, and be subject to, the terms of a Restricted Stock Agreement.

(H)                               Notwithstanding the
foregoing, but subject to the provisions of Section 8 hereof, no Award in the
form of Restricted Stock, the vesting of which is conditioned only upon the
continued service of the participant, shall vest earlier than the first, second
and third anniversaries of the date of grant thereof, on each of which dates a
maximum of one-third of the shares of Common Stock subject to the Award may
vest, and no award in the form of Restricted Stock, the vesting of which is
conditioned upon the attainment of a specified Performance Goal or Goals, shall
vest earlier than the first anniversary of the date of grant thereof.

7.                                      Adjustments
Upon Change in Capitalization.

In the event of changes
in the outstanding shares of Common Stock of the Company by reason of stock
dividends, stock splits, reverse stock splits, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations or liquidations, the number and class of shares available under
the Plan, the number and class of Shares or the amount of cash or other assets
or securities available upon the exercise of any Award granted hereunder and
the number of Shares to be issued pursuant to an Award shall be correspondingly
adjusted, to the end that the participant’s proportionate interest in the
Company, any successor thereto or in the cash, assets or other securities into
which Shares are converted or exchanged shall be maintained to the same extent,
as near as may be practicable, as immediately before the occurrence of any such
event. All references in this Plan to “Common Stock” from and after the
occurrence of such event shall be deemed for all purposes of this Plan to refer
to such other class of shares or securities issuable upon the exercise or
payment of Awards granted pursuant hereto.

 11
 

8.                                      Material
Transaction, Liquidation or Dissolution of the Company.

8.1.                              In the event of a reorganization,
merger or consolidation in which the Company is not the surviving corporation,
or a sale of all or substantially all of the assets of the Company to another
person or entity (each a “Material Transaction”), unless otherwise provided in
the Option Agreement, the Committee shall:

(A)                              provide for the
assumption of outstanding Awards, or the substitution of outstanding Awards for
new Awards, for equity securities of the surviving, successor or purchasing
corporation, or a parent or Subsidiary thereof, with appropriate adjustments as
to the number, kind, vesting and prices of Shares subject to such Awards, as
determined in good faith by the Board in its sole discretion, or

(B)                                provide that the
vesting of each outstanding Stock Option and Stock Appreciation Right shall
automatically be accelerated so that 100% of the unvested Shares covered by
such Award shall be fully vested upon the consummation of the Material
Transaction, and

(i)                                     provide
notice to Participants that all outstanding Stock Options must be exercised on
or before a specified date (which date shall be at least ten days from the date
of notice), after which the Stock Options and Stock Appreciation Rights shall
terminate; or

(ii)                                  terminate
each outstanding Stock Option and Stock Appreciation Right in its entirety and
exchange such Award for a payment of cash, securities and/or property equal to
the Fair Market Value of the Common Stock into which such Award convertible,
less the exercise price for such Award.

(C)                                provide that the
restrictions and deferral limitations applicable to any Restricted Stock shall
lapse, and such Restricted Stock shall become free of all restrictions and
become fully vested and transferable, and

(D)                               the Committee may also
make additional adjustments and/or settlements of outstanding Awards as it
deems appropriate and consistent with the Plan’s purposes.

Notwithstanding the
foregoing, for purposes of Sections 8.1(A), 8.1(B), 8.1(C) and 8.1(D), the
Committee shall not have any of the foregoing powers to the extent that the
mere possession (as opposed to the exercise) of such power would result in
adverse tax consequences to any participant under Code Section 409A.

8.2.                              In the event of the
dissolution or liquidation the Company, whether voluntary or otherwise, that is
not a Material Transaction, all outstanding unexercised Stock Options and Stock
Appreciation Rights must be exercised, if at all, within the ninety day period
commencing on the date specified in Section 8.3 below. All such Awards which
become exercisable during the ninety day period commencing on the date
specified in Section 8.3 below, shall terminate at the end of such ninety day
period to the extent not exercised prior thereto.

8.3.                              The date specified in
this Section 8.3 is the date of the earliest to occur of the following events:

 12
 

(i)                                     the
entry, in a court having jurisdiction, of an order that the Company be
liquidated or dissolved;

(ii)                                  adoption
by the stockholders of the Company of a resolution resolving that the Company
be liquidated or dissolved voluntarily; or

(iii)                               adoption
by the stockholders of the Company of a resolution to the effect that the
Company cannot, by reason of its liabilities, continue its business and that it
is advisable to liquidate or dissolve the Company.  Notwithstanding anything herein to the
contrary, in no event may any option granted hereunder be exercised after the
expiration of the term of such option.

9.                                      Further
Conditions.

Each Award granted under
the Plan shall be subject to the requirement that if at any time the Committee
shall determine, in its absolute discretion, that it is necessary or desirable
as a condition of, or in connection with the grant and/or issuance of Award or
the exercise thereof, to effect or obtain, as the case may be:

(i)                                     the
listing, registration or qualification of the Shares subject to such Award upon
any securities exchange or under any state or federal law;

(ii)                                  the
consent or approval of any governmental body;

(iii)                               any
investment representation or agreement by the individual desiring to be issued
or to exercise an Award granted under the Plan; or

(iv)                              an
opinion of counsel for the Company,

then,
no Award may be issued or exercised, as the case may be, in whole or in part
unless such listing, registration, qualification, consent, approval, investment
or representation agreement or opinion shall have been effected or obtained, as
the case may be, free of any condition not acceptable to the Board or the
Committee.

10.                               Exchange
and Buyout of Awards.

10.1.                        The Committee may, at any time
or from time to time, authorize the Company, with the consent of the respective
participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards.

10.2.                        The Committee may, at any time
or from time to time, authorize the Company to buy from a participant an Award
previously granted with payment in cash, Shares (including Restricted Stock) or
other consideration, based on such terms and conditions as the Committee and
the participant may agree.

 13

11.                               Termination,
Modification and Amendment.

11.1.                        The Plan
(but not Awards previously granted under the Plan) shall terminate on, and no
Awards shall be granted after, the tenth anniversary of its adoption by the
Board; provided that the Board may at any time terminate the Plan prior thereto
upon the adoption of a resolution of the Board.

11.2.                        The Board
shall have complete power and authority to modify or amend the Plan in whole or
in part and from time to time in such respects as it shall deem advisable;
provided, however, that the Board shall not, without the approval of the votes
represented by a majority of the outstanding Common Stock of the Company
present or represented and entitled to vote at a meeting of stockholders duly
held in accordance with the applicable laws of the Company’s jurisdiction of
incorporation or by the written consent of stockholders owning stock
representing a majority of the votes of the Company’s outstanding stock
entitled to vote:

(i)                                     increase
the number of Shares available for the grant of Awards under Section 1 of the
Plan (except as provided in Section 7);

(ii)                                  extend
the term of the Plan or the period during which Awards may be granted or
exercised;

(iii)                               reduce
the Stock Option price below 100% (110% in the case of an Incentive Stock
Option granted to a 10% Holder) of the Fair Market Value of the Shares issuable
upon exercise of Stock Options at the time of the granting thereof, other than
to change the manner of determining the Fair Market Value thereof;

(iv)                              alter
the maximum number of Shares available for the grant of Awards in the form of
Incentive Stock Options and Restricted Stock;

(v)                                 materially
increase the benefits accruing to participants under the Plan;

(vi)                              modify
the requirements as to eligibility for participation in the Plan;

(vii)                           modify
the nature of the Awards which may be granted under the Plan;

(viii)                        with
respect to Stock Options which are Incentive Stock Options, amend the Plan in
any respect which would cause such Stock Options to no longer qualify for
Incentive Stock Option treatment pursuant to the Code; and

(ix)                                alter
the provisions set forth in Section 6.3(H) with respect to minimum vesting
schedules relating to Awards in the form of Restricted Stock.

No termination or
amendment of the Plan shall, without the consent of the individual participant,
adversely affect the rights of such participant under an Award theretofore
granted to such participant.

 14
 

12.                               Taxes.

The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it determines is required in
connection with any Awards granted under the Plan.  The Company may further require notification
from the participants upon any disposition of Common Stock acquired pursuant to
the Awards granted hereunder.

13.                               Effectiveness
Of The Plan.

The Plan shall become effective immediately upon its
approval and adoption by the Board, subject to approval by a majority of the
votes of the outstanding shares of capital stock of the stockholders of the
Company cast at any duly called annual or special meeting of the Company’s
stockholders held within one year from the date of Board adoption and approval.

14.                               Designation
of Beneficiary by Participant.

A participant may designate one or more beneficiaries
to receive any rights and payments to which such participant may be entitled in
respect of any option granted under the Plan in the event of such participant’s
death.  Such designation shall be on a
written form acceptable to and filed with the Committee.  The Committee shall have the right to review
and approve beneficiary designations.  A
participant may change the participant’s beneficiary(ies) from time to time in
the same manner as the original designation, unless such participant has made
an irrevocable designation.  Any designation
of beneficiary under the Plan (to the extent it is valid and enforceable under
applicable law) shall be controlling over any other disposition, testamentary
or otherwise, as determined by the Committee. 
If no designated beneficiary survives the participant and is living on
the date on which any right or amount becomes payable to such participant’s
beneficiary(ies), such payment will be made to the legal representatives of the
participant’s estate, and the term “beneficiary” as used in the Plan shall be
deemed to include such person or persons. 
If there is any question as to the legal right of any beneficiary to
receive a distribution under the Plan, the Committee may determine that the
amount in question be paid to the legal representatives of the estate of the
participant, in which event the Company, the Committee, the Board and the
Committee and the members thereof will have no further liability to any person
or entity with respect to such amount.

15.                               Certificates.

All Shares delivered under this Plan will be subject
to such stock transfer orders, legends and other restrictions as the Committee
may deem necessary or advisable, including restrictions under any applicable
federal, state or foreign securities law, or any rules, regulations and other requirements
promulgated under such laws or any stock exchange or automated quotation system
upon which the Shares may be listed or quoted and each stock certificate
evidencing such Shares and other certificates shall have the appropriately
legend.

16.                               Securities
Law and Other Regulatory Compliance.

16.1.                        The
issuance of Awards under the Plan will not be effective unless such issuance is
made in compliance with all applicable federal and state securities laws, rules
and regulations of any governmental body, and the requirements of any stock
exchange or automated quotation

 15
 

system upon
which the Shares may then be listed or quoted, as they are in effect on the
date of issuance/grant and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver stock certificates for Shares under this Plan
prior to:

(i)                                     obtaining
any approvals from governmental agencies that the Committee determines are
necessary or advisable; and/or

(ii)                                  completion
of any registration or other qualification of such Shares under any state or
federal law or ruling of any governmental body that the Committee determines to
be necessary or advisable.

16.2.                        The
Company will be under no obligation to register the Shares under the Securities
Act of 1933, as amended, or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.

17.                               No
Obligation to Employ.

The Plan shall not constitute a contract of employment
and nothing in this Plan shall confer or be deemed to confer on any participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Subsidiary or affiliate of the Company or limit in any
way the right of the Company or any Subsidiary or affiliate of the Company to
terminate the participant’s employment or other relationship at any time, with
or without cause.

18.                               Non-exclusivity
of the Plan.

Neither the adoption of the Plan by the Board, the
submission of the Plan to the shareholders of the Company for approval, nor any
provision of this Plan will be construed as creating any limitations on the
power of the Board or the Committee to adopt such additional compensation
arrangements as the Board may deem desirable, including, without limitation,
the granting of Stock Options otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

19.                               Miscellaneous
Provisions.

19.1.                        Determinations
made by the Committee under the Plan need not be uniform and may be made
selectively among Eligible Persons under the Plan, whether or not such Eligible
Persons are similarly situated.

19.2.                        No Shares,
other Company securities or property, other securities or property, or other
forms of payment shall be issued hereunder with respect to any option granted
under the Plan unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, local and
foreign legal, securities exchange and other applicable requirements.

19.3.                        It is the
intent of the Company that the Plan comply in all respects with Rule 16b-3
under the Exchange Act, that any ambiguities or inconsistencies in construction
of the

 16
 

Plan be
interpreted to give effect to such intention and that if any provision of the
Plan is found not to be in compliance with Rule 16b-3, such provision shall
be deemed null and void to the extent required to permit the Plan to comply
with Rule 16b-3.

19.4.                        The
appropriate officers of the Company shall cause to be filed any reports,
returns or other information regarding the grant of Stock Options hereunder or
any Shares issued pursuant hereto as may be required by Section 13 or 15(d) of
the Exchange Act (or any successor provision) or any other applicable statute,
rule or regulation.

19.5.                        The
validity, construction, interpretation, administration and effect of the Plan,
and of its rules and regulations, and rights relating to the Plan and Awards
granted under the Plan and any agreements in connection therewith, shall be
governed by the substantive laws, but not the choice of law rules, of the State
of Delaware.

 17

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