Document:

EX-10.48 Manufacturing and Supply Agreement

 

Exhibit 10.48

Non-Confidential Exhibit A

MANUFACTURING AND SUPPLY AGREEMENT

     THIS MANUFACTURING AND SUPPLY AGREEMENT (this “Agreement”) is dated as of December
6, 2007 and is between ANIP ACQUISITION COMPANY, d/b/a ANI PHARMACEUTICALS, INC. (“ANI”), a
Delaware corporation and JDS Pharmaceuticals, LLC, a New York limited liability company, (“JDS”).

     The parties wish to set forth the terms and conditions under which ANI will manufacture for
and supply to JDS the Products described herein. Accordingly, in consideration of the mutual
promises and undertakings contained herein and intending to be legally bound hereby, the parties
hereto agree as follows:

ARTICLE I

DEFINITIONS

When used in this Agreement, the following terms shall have the meanings set forth below:

“Act” shall mean the Federal Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated there under from time to time.

“Affiliate” shall mean any person or legal entity controlling, controlled by or under common
control with the person with respect to whom such status is at issue and shall include,
without limitation, any corporation 50% or more of the voting power of which (or other
comparable ownership interest for an entity other than a corporation) is owned, directly or
indirectly, by a party hereto or any corporation, person or entity which owns 50% or more of
such voting power of a party hereto.

“Agreement” shall have the meaning given to that term in the introductory paragraph hereof.

“ANI ’s Shipping Point” shall mean ANI’s facility in Baudette, Minnesota

“cGMP” means the current Good Manufacturing Practice regulations applicable to the
manufacture of the Products hereunder.

“Claims” shall have the meaning given to that term in Section 5.1 hereof.

“Confidential Information” shall have the meaning given to that term in Section 7.1
hereof.

“Contract Quarter” shall mean (i) the period from the date of this Agreement through and
including September 30, 2007, and (ii) thereafter, each period of three (3) successive
calendar months during each Contract Year.

“Contract Year” shall mean (i) the period from the date of this Agreement through and
including December 31, 2007, and (ii) thereafter, January 1 through December 31 of each
succeeding calendar year, unless terminated before such later date as provided herein.

“FDA” shall mean the United States Food and Drug Administration and any successor agency.

“Firm Commitment” shall have the meaning of a no cancellation clause on forecast
product requirements in the Contract Quarter.

“Force Majeure Event” shall have the meaning given to that term in Section 9.1 hereof.

“Form” shall have the meaning given to that term in Section 2.3 hereof.

“Indemnitee” shall have the meaning given to that term in Section 5.3 hereof.

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“Indemnitor” shall have the meaning given to that term in Section 5.3 hereof.

“Labeling” shall mean all unit Products labels, package inserts, carton imprints, tablet
debossing/embossing and/or imprinting and all other markings on packaging for, or other
similar materials related to, the Products that are defined as labels or labeling under any
applicable law or regulation.

“Labeling Specifications” shall mean the labeling and packaging specifications for the
Products attached here to as Exhibit B and made a part hereof, as such
specifications may be amended from time to time by mutual agreement in writing of the
Parties.

“Latent Defects’ shall have the meaning given to that term in Section 2.7 (c)

“Law” means any applicable statute, law, ordinance, rule, regulation, order, judgment,
ruling or decree enacted, adopted, issued or promulgated by any Regulatory Authority.

“Manufacturing Authorization” means any authorization necessary to manufacture the Products
as granted by the applicable Regulatory Authority.

“Manufacturing Standards” shall mean all U.S. Laws applicable to the manufacture of the
Products.

“Net Sales” shall have the meaning given to that term in Section 2.4(b) (iii) hereof

“NDC” shall mean the national drug code assigned to each Product by the FDA.

“Nonconformance” shall have the meaning given to that term in Section 2.7(c) hereof.

“PPI” shall have the meaning given to that term in Section 2.4(b) hereof.

“Products” shall mean the pharmaceutical dosage form consisting of: Lithium Carbonate as an
active ingredient in the presentations specified in Exhibit A hereto and
incorporated herein by reference, including, without limitation, bulk form, whether to be
ultimately sold by JDS under the LITHOBID® (Lithium Carbonate, USP, Slow-Release Tablets)
trademark or in generic form.

“Product Specifications” shall mean the specifications for the Products attached hereto as
Exhibit C, incorporated by reference herein, the Products specifications and methods
set forth as of the date hereof in the manufacturing and control sections of the new drug
application heretofore submitted to and approved by the FDA for the Products (including any
Labeling requirements specified therein) and any amendments to such specifications that may
be mutually agreed upon by the parties in writing.

“Regulatory Authority” shall mean any U.S. governmental regulatory authority involved in
granting approvals for the manufacture, marketing, sale, reimbursement and/or pricing of
Products in the U.S., including, without limitation, the FDA and any judicial or
administrative decisions relating thereto.

“Regulatory Change” shall have the meaning given to that term in Section 9.2 hereof.

“Regulatory Standards” shall mean all laws, rules, regulations and Regulatory Authority
advisory opinions or orders applicable to the manufacturing, marketing, sale, reimbursement
and/or pricing of any Products.

“Specifications” shall mean the Products Specifications and the Labeling Specifications.

“Standard Cost” shall have the meaning given to that term in Section 2.4(b) hereof.

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ARTICLE II

SUPPLY

2.1 Generally. Subject to the terms and conditions of this Agreement, ANI shall supply to JDS
and JDS shall purchase from ANI the Products in such quantities as JDS may order hereunder from
time to time for its worldwide requirements. Except for such quantities of the Product as JDS may
order in bulk in accordance with the terms hereof, ANI shall supply the Product in finished,
packaged form and tested in accordance with the Specifications and Manufacturing Standards. ANI
will not implement any change in materials, components, processes or test methods without
consulting with and receiving the prior written approval of JDS. ANI will utilize its change
control processes in this regard. In addition, a Quality Agreement will be developed for quality
governance substantially in the form attached hereto as Exhibit D.

2.2 Forecasts.

(a) Initial Forecast Within fifteen (15) business days of the signing of this
Agreement, JDS shall submit to ANI a written forecast of its requirements for the Products
for the first Contract Year, the first Contract Quarter of which shall constitute a Firm
Commitment of JDS.

(b) Subsequent Forecasts JDS shall submit to ANI by the first day of each
successive Contract Quarter a 12-month rolling forecast, by Contract Quarter, of its
requirements for the Products, the first quarter of which shall constitute a Firm Commitment
of JDS.

(c) ANI shall base its production planning on the forecasts provided to ANI by JDS pursuant
Sections 2.2(a) and 2.2(b), with the option to manufacture successive batches to three (3)
batches] of JDS’s forecast requirements for the Contract Quarter. ANI shall have the right
at any time, to order materials and supplies to manufacture one hundred percent (100%) of
those amounts of Product ordered by JDS under Section 2.2(a) and 2.2(b). In addition, to
the extent any materials necessary to the manufacture of the Product require a longer lead
time, ANI shall be entitled to order such materials as it deems appropriate to fulfill its
obligations hereunder and consistent with normal production practices in the pharmaceutical
industry, and considering the term of this Agreement. If any such materials or any work in
process become unusable due to a change in the Product Specifications or orders lower than
forecasts, ANI shall have the right to invoice JDS for the full cost of unusable materials
or work in process and JDS shall promptly pay such invoice. JDS shall have full rights and
title to such obsolete materials (and work in process). At JDS’s election, such materials
(and work in process) shall be (i) destroyed by ANI, at JDS’s expense or (ii) transferred by
ANI to JDS at JDS’s expense.

2.3 Purchase Orders. Within thirty (30) days of the signing of this Agreement, JDS shall place its
initial purchase order for the first quarter which is the Firm Commitment period described in
Section 2.2(a). JDS shall place orders for Products only in whole number multiples of
specified-size lots. JDS shall place each subsequent order for Products by delivering to ANI a
written purchase order specifying the quantity and delivery date (which delivery date shall not be
less than ninety (90) days after the date such purchase order is delivered to ANI unless otherwise
agreed). Unless the parties otherwise agree, quantities specified in purchase orders for each
Product for the second and subsequent Contract Quarters may not be less than 80% nor more than 120%
of those set forth for such quarter in the most recent forecast submitted to ANI hereunder;
provided, however, that ANI will use commercially reasonable

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efforts to fill any orders for quantities in excess of such maximum amount. ANI shall acknowledge
and accept each purchase order received from JDS which complies with the forecast and order
procedures set forth herein, within four (4) business days after receipt.

2.4 Pricing and Payment.

(a) General Price. The purchase price of Products supplied to JDS hereunder shall be ***
plus any applicable sales or use taxes, duties and other similar taxes, unless JDS provides
ANI with a valid resale certificate or other proof of exemption.

(b) Price Changes. ***

(c) Other Increases and/or Payments. ***

(d) Invoicing and Payment. ANI shall invoice JDS for each shipment of the Product
simultaneously with ANI’s actual shipment of Products and delivery to JDS of a certificate
of analysis relating to such shipment. Payment shall be due within thirty (30) days from
invoice date. Past due balances shall be subject to a service charge of 12% per annum, but
in no event shall such charge exceed the maximum rate permitted by law. All payments shall
be made in U.S. dollars.

(e) Books
and Records. ANI shall maintain accurate books and records of Standard Cost
and other costs for which JDS is responsible pursuant to Section 2.4 which shall, from the
date hereof until twelve (12) months following the expiration date of the last batch of
Product manufactured hereunder, be made available for inspection and audit by JDS at least
once per year solely for the purpose of verifying price increases pursuant to this Section
2.4 and other costs for which JDS is responsible. JDS shall be responsible for the costs of
any such inspection and audit, provided that if it is determined that JDS has paid costs
which exceed the costs as to which JDS is responsible pursuant to Section 2.4 by more than
5%, ANI shall be responsible for the reasonable costs of such audit, as well as for
refunding the amount of the JDS overpayment.

2.5 Delivery.

(a) Generally. All Products sold to JDS hereunder shall be delivered to JDS FOB ANI’s
Shipping Point. All risk of loss shall pass to JDS when ANI so delivers Products to a
carrier for JDS. JDS shall designate a carrier and mode of shipment on each purchase order
submitted to ANI provided, however, that should JDS fail to designate a carrier on its
purchase order, ANI shall use the common carrier designated by JDS as its default carrier,
or if JDS shall fail to designate a default carrier, ANI may select a common carrier for the
account and risk of JDS.

(b) Deviation from Agreed Delivery Time. ANI shall use commercially reasonable efforts
to fill each purchase order submitted hereunder by the specified shipment date. Originally
agreed times for delivery to JDS’s carrier are not to be deemed of the essence of an
accepted order, and reasonable deviations from originally agreed times will be accepted by
JDS. Deviations of more than *** shall be deemed unreasonable, unless JDS has on hand an
inventory of Products sufficient to meet JDS’s requirements (based on its forecasts
delivered to ANI under Section 2.2) for *** in which case deviations of more than *** will
be deemed unreasonable.

(c) Delay in Delivery. JDS recognizes the inherent difficulty in producing the Product and
also recognizes that delays in shipment, while non-routine, may occur from time to time.
ANI shall notify JDS promptly of any circumstance that may cause a delay in making
Products available for shipment FOB ANI’s Shipping Point, stating the estimated period of
delay and the reasons

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therefore. ANI shall use commercially reasonable efforts to avoid or minimize the delay,
including, when necessary or at JDS’s request, the expenditure of premium time and shipping
via air or other expedited routing. Any additional cost caused by such requirements shall
be borne by the party causing the delay to the extent of any culpability. If no culpability
can be assigned to either party, such additional costs for premium time and air shipment
requested by JDS shall be borne solely by JDS. Nothing herein may be construed to prejudice
any of the express rights or remedies provided to either party in this Agreement. In
addition to any such rights JDS may have hereunder, JDS shall have the right to cancel any
order which is not made available for shipment FOB ANI’s Shipping Point for more than ***
after its agreed shipment date for causes other than Force Majeure Events or Regulatory
Changes so long as such delay has arisen through no fault or negligence of JDS.
Notwithstanding the foregoing, ANI shall not be liable in any way (including, without
limitation, for the additional costs caused by the requirements set forth above in this
section) for any delay excused under Article IX hereof.

(d) Priority of Supply. If for any reason (including without limitation, a back order
situation, a Force Majeure Event or a Regulatory Change) ANI is unable to supply JDS’s
demand for Products and the demands of ANI’s other customers (including ANI and ANI’s
Affiliates), ANI shall give JDS’s demand at least equal priority to those of ANI’s other
customers (including ANI and ANI’s Affiliates).

2.6 Labeling and Packaging.

(a) Generally. JDS shall provide to ANI and shall bear the sole responsibility for
ensuring the accuracy of the information contained in all Labeling Specifications and for
compliance thereof with all Regulatory Standards. ANI shall be responsible for procuring all
Labeling, which shall be created in accordance with the Labeling Specifications. With
respect to all Products to be supplied in finished, packaged form, ANI shall procure
sufficient Labeling to cover quantities of the Products as to which JDS’s forecasts under
Section 2.2 hereof constitute a firm commitment. Acquisition of additional inventory of
Labeling components beyond the three (3) month commitment shall be made only with advance
consultation of JDS.

(b) Changes. Should JDS desire or be required to change any component of Labeling or to
introduce a new packaging component to which Labeling will be affixed, JDS shall so inform
ANI and shall be responsible for updating the artwork or text, as applicable, and providing
it to ANI in camera-ready or electronic form and in compliance with the Labeling
Specifications. ANI shall make all necessary arrangements for such Labeling to be printed
and shall provide to JDS printer’s proofs of all Labeling for JDS’s review.Within fifteen
(15) business days of its receipt of such proofs, JDS shall either provide to ANI any
necessary corrections thereto or notify ANI of its approval of such proofs. Upon JDS’s
acceptance thereof, ANI shall return all artwork provided by JDS. ANI shall be entitled to
directly charge JDS, amounts to take account of only those costs incurred in making changes
to Labeling and/or packaging as provided for in this Section 2.6(b). Allowable transition
cost charges include, without limitation, the costs of acquiring new Labeling in a timely
manner to meet JDS’s pending purchase orders and forecast demand and the acquisition and
disposal costs associated with obsolete inventory of Labeling, films, plates and packaging.
ANI will charge JDS direct, out-of-pocket expenses in a one-time charge after completion of
the Labeling transition.

2.7 Stability Testing and Inspection of Products.

(a) Stability Testing. ANI shall provide stability testing for Products manufactured
hereunder, and shall provide all stability results to JDS in a timely fashion. ANI and JDS
shall agree to a work outline to accomplish an acceptable stability program. ANI shall
retain a suitable quantity

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of retained samples until twelve (12) months after the stated expiration date for the tested
Product. ANI shall promptly notify JDS of any costs associated with the agreed upon
stability testing program for the Products beyond those which ANI customarily and routinely
incurs in connection with stability testing and such additional costs shall be charged to
and shall be the sole responsibility of JDS (through an adjustment to the Standard Cost).
ANI will notify JDS of stability failures within 48 hours of ANI’s s becoming aware of any
such failure.

(b) Certificate of Analysis. ANI will provide JDS with a certificate of analysis for all
batches of Products shipped to JDS which shall include, without limitation, the expiry date.
Such certificate of analysis shall be delivered to JDS at the time of shipment of the
Products. Delivery of any Products by ANI to JDS shall constitute a certification by ANI
that at the time of delivery the Products conforms to the certificate of analysis provided
therewith and the Product Specifications and was manufactured in accordance with the
Manufacturing Standards. JDS shall store all Products in conditions as specified in the
Product Specifications. All Products delivered to JDS shall have a remaining expiry period
of no more than three months less than the total initial labeled expiry period. To avoid
confusion, and as an example: for Product that has an initial labeled expiry period of 24
months the Product delivered must have at least 21 months remaining expiry period upon
receipt by JDS.

(c) Nonconformance. Within thirty (30) days after its receipt of each shipment of Products
at the destination specified in the shipping instructions, JDS shall inspect such shipment
for material nonconformance with the applicable purchase order, the applicable
Specifications or the representations and warranties of ANI set forth herein
(“Nonconformance”). If, upon such inspection, JDS discovers any Nonconformance, JDS may
reject the nonconforming portion of such shipment by giving prompt written notice to ANI
Such notice shall include a copy of JDS’s test results and specify the precise
Nonconformance upon which such rejection is based. Absent such notification, JDS shall be
deemed to have accepted the shipment, except as to latent defects that could not have been
detected in such 30-day period (“Latent Defects”). In no event shall ANI be liable for any
Non-conformance arising out of the shipment, storage, use or handling of the Products
following its delivery FOB ANI’s Shipping Point.

(d) Procedure. Upon notifying ANI of any Nonconformance, or upon notifying ANI of any Latent
Defects, JDS shall afford ANI a reasonable opportunity to inspect the shipment in question
and make any appropriate adjustment or replacement. The parties shall submit any dispute
regarding the proper rejection of a shipment to a mutually selected independent laboratory,
the determination of which shall be binding on the parties and the costs of which shall be
borne by the party against whom such determination is rendered. If such laboratory confirms
a Nonconformance or Latent Defect in the shipment in question (or any part of it) at the
time of delivery to the carrier, or if the parties agree that there is a shortage or a
Nonconformance or Latent Defect, then ANI shall use commercially reasonable efforts to make
up the shortage or replace any nonconforming Products, as the case may be, with such new
Products to be shipped at ANI’s expense to the same destination as the original shipment.
If ANI is unable to make up the shortage or replace any nonconforming Products, it shall
promptly refund any money paid by JDS with respect to such undelivered or nonconforming
Products and reimburse JDS for the costs of shipping such Products. ANI may, at its sole
option, either direct JDS to return nonconforming Products to ANI or have it destroyed by
JDS, and certify such destruction to ANI, all at ANI’s expense. ANI’s supply of
substitute Products which conform to the applicable Specifications or, as the case may be,
payment of the refund and reimbursement provided for herein, shall satisfy and discharge all
claims or potential claims which JDS may have against ANI with respect to undelivered or
nonconforming Products in that shipment, provided replacement Products is available to JDS
within thirty (30) days of the identified shortage.

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2.8 Inspection of Facility. JDS or its designees may, at its sole expense, inspect the facilities
being used by ANI to manufacture, package, store or ship the Products to assure compliance with
Manufacturing Standards. Each such inspection shall be conducted upon reasonable advance notice,
at mutually agreed times during regular business hours and in a manner which minimizes disruption
of ANI’s business operations. JDS may conduct such inspections no more than twice each Contract
Year unless it has a good faith reason to believe such facility is not materially in compliance
with Manufacturing Standards.

2.9 Recalls. If any Regulatory Authority with applicable jurisdiction shall order, or it shall
otherwise become necessary to perform, any corrective action or market action with respect to any
Products manufactured by ANI (including, without limitation, any recall, field correction, market
withdrawal, stock recovery, customer notice or restriction), JDS shall have the exclusive
responsibility to appropriately manage such action. If such corrective action or market action is
caused by the action of or necessitated by the breach by one of the parties of any of its
warranties, representations, obligations, covenants or agreements contained herein, or in any
Manufacturing Authorization, then such party shall be liable, and shall reimburse the other party,
for all reasonable costs incurred by the non-breaching party in connection with such action
(including, without limitation, reasonable attorney’s fees and expenses). If each of the parties
is partly responsible for such corrective action or market action, then each party shall be
responsible for its proportionate share of such costs. If neither party is responsible for such
corrective action or market action, then JDS shall be responsible for such costs. JDS shall also
be exclusively responsible for handling all customer complaints, inquiries and the like, and ANI
shall appropriately cooperate with JDS, including the completion of an investigation and the
preparation and submission of a complaint report to JDS or its designees.

2.10 Process Improvements and Development Activities. ***

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of ANI. ANI represents and warrants to JDS as follows:

Conformance of Products. Subject to JDS’s obligations with respect to supplies of the
Labeling Specifications under Section 2.6 hereof, each certification by ANI pursuant to
Section 2.7(b) shall be deemed a representation and warranty hereunder, any breach of which
representation and warranty being subject to the provisions of Section 5.1, Section
2.7(c) and Section 2.7(d) and the limitations contained in Section 3.3.

Adulteration; Misbranding. Subject to JDS’s obligations with respect to supplies of the
Labeling Specifications under Section 2.6 hereof, no Products supplied by ANI to JDS under
this Agreement shall, at the time of delivery to the carrier FOB ANI’s Shipping Point, be
adulterated or misbranded within the ANI of the Act or be an article which may not be introduced
into interstate commerce under the provisions of Section 505 of the Act.

Organization; Standing. ANI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being conducted.

Authorization; Binding Effect. The execution and delivery by ANI of this Agreement, the
performance by ANI of its obligations hereunder and the consummation by ANI of the transactions
contemplated hereby have been duly authorized by all necessary corporate action on the part of ANI
This Agreement has been duly executed and delivered by a duly authorized officer of ANI and
constitutes the valid and legally binding obligation of ANI enforceable against ANI in accordance
with its terms.

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No Conflict; Consents. The execution and delivery of this Agreement by ANI (a) will not
violate or result in the breach of, constitute a default under, or accelerate the performance
required by, any term of any covenant, agreement or understanding to which ANI or any Affiliate is
a party, or any Law to which ANI or any Affiliate is subject and (b) requires no consents or
agreements of any third party (including governmental bodies) necessary for the performance by ANI
of its obligations under this Agreement, and ANI has, and at all times will maintain, all necessary
Manufacturing Authorizations.

Representations and Warranties of JDS. JDS represents and warrants to ANI as follows:

(a) Organization; Standing. JDS is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware and has all
requisite power and authority to own, lease and operate its properties and to carry on its
business as now being conducted.

(b) Authorization; Binding Effect. The execution and delivery by JDS of this
Agreement, the performance by JDS of its obligations hereunder and the consummation by JDS of the
transactions contemplated hereby have been duly authorized by all necessary action on the part of
JDS. This Agreement has been duly executed and delivered by a duly authorized officer of JDS and
constitutes the valid and legally binding obligation of JDS enforceable against JDS in accordance
with its terms.

(c) NoConflict;Consents. The execution and delivery of this Agreement by JDS (a)
will not violate or result in the breach of, constitute a default under, or accelerate the
performance required by, any term of any covenant, agreement or understanding to which JDS
or any Affiliate is a party, or any Law to which JDS or any Affiliate is subject and (b)
requires no consents or agreements of any third party (including governmental bodies)
necessary for the performance by JDS of its obligations under this Agreement.

3.2 Limitations.

     (a) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, HE PARTIES AGREE THAT ANI
MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS, IMPLIED OR OTHERWISE, AND
SPECIFICALLY DISCLAIMS AND SHALL NOT BE LIABLE TO JDS OR OTHERS IN RESPECT OF:

(i) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO THE PRODUCTS, WHETHER USED ALONE OR IN COMBINATION WITH OTHER SUBSTANCES OR
MATERIALS;

(ii) ANY LIABILITY FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (OTHER THAN TO THE
EXTENT REASONABLY FORESEEABLE IN LIGHT OF THE OBJECTIVES OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT , BUT SUBJECT TO THE FURTHER LIMITATIONS IN SECTION 3.3(C) BELOW),
WHETHER ARISING OUT OF A BREACH OF THE REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN OR
OTHERWISE AND WHETHER IN CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE; AND

(iii) ANY LIABILITY TO THE EXTENT ARISING AS A RESULT OF PRODUCTS: (I) HAVING
BEEN TAMPERED WITH OTHER THAN BY ANI OR ITS AGENTS, (II) HAVING BEEN SUBJECT TO
MISUSE, NEGLIGENCE OR ACCIDENT OTHER THAN BY ANI OR ITS AGENTS, (III) HAVING BEEN
STORED, HANDLED OR USED OTHER THAN BY ANI OR ITS AGENTS IN A MANNER CONTRARY TO
REGULATORY STANDARDS OR THE INSTRUCTIONS CONTAINED ON LABELING, OR (IV) HAVING
EXCEEDED ITS STATED EXPIRATION.

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     (b) THE MAXIMUM AGGREGATE LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT SHALL NOT IN
ANY EVENT EXCEED ***.

     (c) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NONE OF THE LIMITATIONS ON
LIABILITY SET FORTH IN THIS SECTION SHALL APPLY TO ACTS OR OMISSIONS OF ANI TAKEN OR OMITTED
TO BE TAKEN WITH INTENT TO BREACH THE REPRESENTATIONS, WARRANTIES OR OBLIGATIONS OF ANI
UNDER THIS AGREEMENT.

ARTICLE IV

TERM AND TERMINATION

4.1 Term. This Agreement shall become effective as of the date hereof and shall continue until
five (5) years following the Effective Date (the “Initial Term”), unless terminated earlier by
mutual agreement of the parties or by one of the parties in accordance with this Article 4.1;
provided further that JDS shall have the option, in its sole discretion, to extend the Initial Term
of this Agreement for three (3) successive terms of one (1) year each (each a “Renewal Term” and
collectively with the Initial Term, the “Term”) by providing ANI written notice of such election
not less than six (6) months prior to the expiration of the Initial Term or then current Renewal
Term.

4.2 Term. The term of this agreement shall commence on the date hereof and shall continue for a
period of five years, unless terminated earlier pursuant to Section 4.2 or Section 4.3
hereof. This Agreement may be renewed for such additional period and upon such other terms as
the parties may mutually agree

4.3 Termination by Mutual Agreement. The parties may terminate this Agreement any time by mutual
written agreement

4.4 Termination upon Material Breach. Subject to the last two sentences of this Section
4.3, either party may terminate this Agreement upon not less than sixty (60) days written
notice thereof to the other party of the material breach by the other party of any of its
representations, warranties, covenants or agreements contained in this Agreement (provided,
however, that the breaching party may extend such notice period by up to thirty (30) additional
days upon its written certification that (i) such breach is not reasonably capable of being cured
within such 60-day period and (ii) it has commenced and is diligently pursuing efforts to cure such
breach). Upon the expiration of such notice period, this Agreement shall terminate without the need
for further action by either party; provided, however, that if the breach upon which such notice of
termination is based shall have been fully cured to the reasonable satisfaction of the
non-breaching party within such notice period, then such notice of termination shall be deemed
rescinded, and this Agreement shall be deemed reinstated and in full force and effect. Such right
of termination shall be in addition to such other rights and remedies as the terminating party may
have under any Law. The time periods for termination stated above in this Section 4.3,
shall be suspended during the period commencing upon a bona fide dispute arising between the
parties as to whether a material breach has occurred and ending upon the date such dispute is
finally determined. In the event such final determination provides for the payment of money and
such amount is paid in full by the obligor within ten (10) days of such determination, no
termination right shall arise hereunder with respect to the matter in question.

4.5 Rights and Duties upon Termination.

(a)Supply and Purchase of Products. Unless otherwise mutually agreed by the
parties, ANI shall supply, and JDS shall purchase in accordance with the provisions hereof,
all quantities of Products ordered by JDS hereunder prior to the date of expiration or
termination; provided, however, that ANI shall not be required to supply volumes of Products
which exceed the amounts for which ANI is responsible under the forecast and firm order
procedures herein for the balance of the Calendar Quarter in which the termination occurs.
In addition, JDS shall remain liable for and shall duly pay all costs incurred prior to the
effective date of expiration or termination which are

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properly chargeable to JDS pursuant to the terms of this Agreement. JDS shall have the
right to use and sell any such Products in the ordinary course including Products which may
contain reference to ANI

(b)Purchase of Additional Materials. Upon the expiration or termination of
this Agreement, JDS shall, if so requested by ANI, purchase (i) all dedicated raw and
packaging materials acquired by ANI hereunder to manufacture the Products, at ANI’s actual
cost thereof, (ii) all work-in-progress of the Products at ANI’s actual cost thereof, and
(iii) all inventory of finished Products then in ANI’s possession at the then-current
purchase price hereunder. In addition, JDS shall pay ANI the actual out of pocket cost for
any non-cancelable commitments made by ANI for materials hereunder. Notwithstanding anything
to the contrary in the preceding two sentences, the foregoing purchase and payment
obligations of JDS shall be limited solely to materials obtained, Products manufactured and
non-cancelable commitments incurred by ANI for quantities of the Products as to which JDS’s
forecasts under Section 2.2 hereof constitute a firm commitment or for which
purchase orders have been received and which, in the case of Products, comply with the
Product Specifications and all Manufacturing Standards. All materials purchased by JDS
become the property of JDS and ANI will, at the request of JDS, arrange to ship such
materials to locations designated by JDS. The cost of the freight shall be borne by JDS.
The foregoing purchase and payment obligations shall not apply in the event of a termination
by JDS based on a breach by ANI of its supply obligations.

ARTICLE V

INDEMNIFICATION

5.1 By ANI. Subject to the limitations described in Section 3.3, ANI shall defend,
indemnify and hold harmless JDS and its Affiliates, successors, permitted assigns and their
respective officers, directors, managers, members, stockholders, partners and employees from and
against any and all Claims arising out of (a) any breach of any representation, warranty or
covenant of ANI hereunder, (b) any negligent storage or handling of the Products by ANI prior to
delivery to JDS FOB ANI’s Shipping Point, (c) any negligent act or omission of ANI or its
employees, agents or other contractors with respect to the Products, (d) the failure of ANI to
comply with any applicable Regulatory Standards with respect to the manufacture or storage, or (e)
all personal injury (including death) and/or property damage resulting from the manufacture,
handling, or possession of the Products prior to ANI’s delivery of the Products to JDS FOB ANI’s
Shipping Point. For purposes of this Agreement, “Claims” shall mean any and all liabilities and
expenses whatsoever, including, without limitation, claims, adversary proceedings (whether before a
court, Regulatory Authority or any other tribunal), damages (other than special, incidental,
consequential or punitive damages except to the extent awarded to a third party), judgments,
awards, penalties, settlements, investigations, costs, and attorneys’ fees and disbursements

5.2 By JDS. Subject to the limitations set forth in Section 3.3., JDS shall defend, indemnify and
hold harmless ANI and its Affiliates, successors, permitted assigns and their respective officers,
directors, stockholders, partners and employees from and against any and all Claims arising out of
(a) any breach of any representation, warranty or covenant of JDS hereunder, (b) any negligent act
or omission of JDS or its employees, agents or other contractors with respect to the Products, (c)
the failure of JDS to comply with any applicable Regulatory Standards with respect to the
importation, marketing, distribution or sale of the Products, (d) any Labeling for the Products
approved by JDS, (e) the infringement of any patent, trademark or other intellectual property
rights by the sale or use of the Products, or (f) all personal injury (including death) and/or
property damage resulting from the handling, possession, marketing, promotion or use of the
Products following ANI’s delivery of the Products to JDS FOB ANI’sShipping Point. Notwithstanding
the preceding sentence, JDS shall not be required to indemnify ANI with respect to any

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Claim arising from ANI’s breach of its representations, warranties or covenants hereunder or ANI’s
willful misconduct with respect to the Products.

5.3 Procedure. Any person or entity intending to claim indemnification hereunder (an “Indemnitee”)
shall notify the party hereunder from whom indemnification is sought (the “Indemnitor”) in writing
within a reasonable time of any third-party Claim for which indemnification is sought hereunder.
The failure to give timely notice to the Indemnitor shall not release the Indemnitor from any
liability to the Indemnitee to the extent the Indemnitor is not prejudiced thereby. The Indemnitor
shall have the right, by notice to the Indemnitee within fifteen (15) business days after the
Indemnitor’s receipt of notice thereof, to assume the defense of any such third-party Claim with
counsel of the Indemnitor’s choice and at Indemnitor’s sole expense. If the Indemnitor so assumes
such defense, the Indemnitee may participate therein through counsel of its choice, but at its sole
expense. The party not assuming the defense of the third-party Claim shall render all reasonable
assistance to the party assuming the defense, and all reasonable out-of-pocket costs of such
assistance shall be for the account of the Indemnitor. No such third-party Claim shall be settled
other than by the party defending it, and then only with the consent of the other party (which
shall not be unreasonably withheld or delayed). The Indemnitee shall, however, have no obligation
to consent to any settlement which imposes on the Indemnitee any liability or obligation which
cannot be assumed and performed in full by the Indemnitor, and the Indemnitee shall have no right
to withhold its consent to any settlement which involves only the payment of money by the
Indemnitor or its insurer.

ARTICLE VI

ADVERSE EVENT REPORTS

JDS shall be solely responsible for receiving, recording and responding to all customer inquiries
and complaints and all reports of alleged adverse events relating to the Product, and for reporting
all such matters to appropriate Regulatory Authorities in accordance with applicable law. ANI
shall provide JDS with any technical information relating to formulation, manufacture or stability
of the Product reasonably necessary to enable JDS to perform all such activities. Should ANI
receive any notice or inquiry regarding adverse events, it shall immediately transmit them to JDS.

ARTICLE VII

CONFIDENTIALITY

7.1 Generally. Each party shall hold all Confidential Information disclosed to it by the other in
the strictest confidence and shall protect all such Confidential Information with the same degree
of care that it exercises with respect to its own proprietary information. Without the prior
written consent of the disclosing entity, the receiving party shall neither use, disclose, divulge
or otherwise disseminate any Confidential Information to any person or entity outside of the party,
except for the receiving party’s attorney and such other professionals as the receiving party may
retain in order for it to enforce the provisions of this Agreement. For purposes of this
Agreement, “Confidential Information” shall consist of any information, whether or not reduced to
writing, which either party shall from time to time possess in relation to the development,
formulation, manufacture, testing or packaging of the Products and which is not generally known to
the public or within the pharmaceutical industry and which one party hereto discloses to the other
party.

7.2 Restriction. Neither party shall use the other’s name or disclose the existence or terms of
this Agreement without the written permission of the other except for references in Products
packaging or labeling required by law or otherwise contemplated herein.7.3 Exceptions.
Notwithstanding Section 7.1

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hereof, neither party shall have any obligations with respect to any Confidential Information which
(a) is or becomes within the public domain through no act of the receiving party in breach of this
Agreement, (b) was lawfully in the possession of the receiving party without any restriction on use
or disclosure prior to its disclosure hereunder, (c) is lawfully received from another source
subsequent to the date of this Agreement without any restriction on use or disclosure, (d) is
deemed in writing by the disclosing entity no longer to be Confidential Information, or (e) is
required to be disclosed by order of any court of competent jurisdiction or other governmental
authority (provided, however, in such latter case, that the receiving party shall timely inform the
disclosing party of all such legal or governmental proceedings so that the disclosing party may
attempt by appropriate legal means to limit such disclosure, and the receiving party shall further
use its best efforts to limit the disclosure and maintain confidentiality to the maximum extent
possible).

ARTICLE VIII

COOPERATION WITH GOVERNMENTAL REQUIREMENTS

The parties shall cooperate with one another as may be reasonably necessary or appropriate to
satisfy all governmental requirements and obtain all needed permits, approvals and licenses with
respect to the manufacture, storage, packaging and sale of the Products. Such cooperation shall
include, without limitation, communicating with Regulatory Authorities and making available as
promptly as reasonably practicable all information, documents and other materials which result from
the performance by ANI of its obligations hereunder which JDS is required to submit. The costs and
expenses of such cooperation, if applicable, shall be subject to the parties’ mutual agreement.
JDS shall be responsible for all regulatory reporting of Products. ANI shall assist JDS by
providing necessary support and information and shall prepare the annual cGMP Products reviews.

ARTICLE IX

FORCE MAJEURE

9.1 Effects of Force Majeure. Notwithstanding any other provision of this Agreement to the
contrary, neither party shall be held liable or responsible for failure or delay in fulfilling or
performing any of its obligations under this Agreement to the extent that such failure or delay
results from any cause beyond its reasonable control, including, without limitation, fire, flood,
explosion, war, strike, labor unrest, riot, embargo, inability to obtain necessary raw materials or
supplies, acts or omissions of carriers, or act of God (each, a “Force Majeure Event”). Subject to
Section 9.4, such excuse shall continue as long as the Force Majeure Event continues,
following which such party shall promptly resume performance hereunder.

9.2 Effects of Regulatory Changes. Notwithstanding any other provision of this Agreement to the
contrary, neither party shall be held responsible or liable for failure or delay in fulfilling or
performing any of its obligations under this Agreement to the extent that such failure or delay
results from good faith efforts to comply with the enactment or revision of any law, rule,
regulation or regulatory advisory opinion or order applicable to the manufacturing, marketing,
sale, reimbursement and/or pricing of the Products (a “Regulatory Change”). Such excuse shall
continue as long as performance is prevented by the affected party’s good faith efforts to comply
with such Regulatory Change, following which such party shall promptly resume performance
hereunder.

9.3 Notice. The party affected by a Force Majeure Event or a Regulatory Change shall notify the
other party thereof as promptly as practicable after its occurrence. Such notice shall describe the
nature of such Force Majeure Event or Regulatory Change and the extent and expected duration of the
affected party’s inability fully to perform its obligations hereunder. The affected party shall use
all reasonable efforts to minimize the effects of or end any such event so as to facilitate the
resumption of full performance hereunder and shall notify the other party when it is again fully
able to perform such obligations.

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9.4 Limitation. Notwithstanding anything to the contrary herein, in the event a Regulatory Change
or Force Majeure Event continues for more than 180 days, JDS shall have the right to terminate this
Agreement upon notice and upon JDS’s request, ANI shall cooperate to assist in the transfer of
technology to a new manufacturer at no additional labor cost to JDS. JDS shall bear the cost and
expense of the foregoing technology transfer in the case of a Regulatory Change, and the parties
shall bear the cost and expense of a technology transfer in such proportion as is just and
equitable in the case of a Force Majeure Event.

ARTICLE X

INDEPENDENT CONTRACTORS

The relationship between ANI and JDS is that of independent contractors, and nothing herein shall
be deemed to constitute the relationship of partners, joint venturers, nor of principal and agent
between ANI and JDS. Neither party shall have any express or implied right or authority to assume
or create any obligations on behalf of or in the name of the other party or to bind the other party
to any contract, agreement or undertaking with any third party

ARTICLE XI

FURTHER ACTIONS

The parties shall execute such additional documents and perform all such other and further acts as
may be necessary to carry out the purposes and intents of this Agreement.

ARTICLE XII

DISPUTE RESOLUTION

12.1 Negotiation. Any dispute, controversy or claim arising out of or relating to this Agreement
or the breach, termination, or invalidity hereof shall be submitted for negotiation and settlement
in the first instance to the Senior Vice President of Sales & Marketing of ANI, or such person’s
designee of equivalent or superior position, and the Senior Vice President Strategic Alliances, or
such person’s designee of equivalent or superior position.

12.2 Arbitration. If the parties are unable to settle a dispute, controversy or claim hereunder
pursuant to Section 12.1, the matter shall be finally resolved by arbitration in accordance
with the rules of American Arbitration Association, except as modified by this Section
12.2. The number of arbitrators shall be three (3), one (1) of whom is selected by JDS, one
(1) of whom is selected by ANI and one (1) of whom is selected by ANI and JDS (or by the other two
(2) arbitrators if the parties cannot agree). The arbitration proceeding shall be conducted in the
English language. The arbitration proceeding shall be brought in State of Delaware, unless the
parties agree in writing to conduct the arbitration in another location. The arbitration decision
shall be binding and not be appealable to any court in any jurisdiction. The prevailing party may
enter such decision in any court having competent jurisdiction. Each party shall pay its own
expenses of arbitration and the expenses of the arbitrators shall be equally shared except that if,
in the opinion of the arbitrators, any claim by a party hereto or any defense or objection thereto
by the other party was unreasonable, the arbitrators may in their discretion assess as part of the
award any part of the arbitration expenses of the other party (including reasonable attorneys’
fees) and expenses of the arbitrators against the party raising such unreasonable claim, defense or
objection.

 13 of 17

 

12.3 Interim Relief. Any party may, without inconsistency with this Agreement, apply to any court
having jurisdiction hereof and seek injunctive relief so as to maintain the status quo until such
time as the arbitration award is rendered or the controversy is otherwise resolved.

ARTICLE XIII

MISCELLANEOUS

13.1 Notices. All notices, requests, instructions, consents and other communications to be given
pursuant to this Agreement shall be in writing and shall be deemed received (a) on the same day if
delivered in person, by same-day courier or by telegraph, telex, facsimile, electronic mail or
other electronic transmission, (b) on the next day if delivered by overnight mail or courier, or
(c) on the date indicated on the return receipt, or if there is no such receipt, on the third
calendar day (excluding Sundays) if delivered by certified or registered mail, postage prepaid, to
the party for whom intended to the following addresses:

     If to JDS:

			
	               	 	JDS Pharmaceutical, LLC

Bruce C. Friedman

Vice President Technical Operations

405 Lexington Ave

New York, NY 10174

     With a copy to:

			
	               	 	Noven Pharmaceuticals, Inc.

Mr. Jeff Mihm

Vice President and General

11960 SW 144th Street

Miami,FL 33186

     If to ANI:

			
	               	 	ANIP Acquisition Company

d/b/a ANI Pharmaceuticals, Inc.

Mr. Thomas L. Anderson

CEO

7131 Ambassador Road; Suite 150

Woodlawn, Maryland 21244

     With a copy to:

			
	               	 	Sonnenschein Nath & Rosenthal LLP

1221 Avenue of the Americas

25th Floor

New York, NY 10020

Attn: Ms. Jane A. Meyer

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     Each party may by written notice given to the other in accordance with this Agreement change
the address to which notices to such party are to be delivered.

13.2 Entire Agreement. This Agreement and the agreements being executed contemporaneously herewith
contain the entire understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, whether written or oral, between
them with respect to the subject matter hereof and thereof. Each party has executed this Agreement
without reliance upon any promise, representation or warranty other than those expressly set forth
herein and in such other agreements.

13.3 Amendment. No amendment of this Agreement shall be effective unless embodied in a written
instrument executed by both of the parties.

13.4 Waiver of Breach. The failure of either party at any time to enforce any of the provisions of
this Agreement shall not be deemed or construed to be a waiver of any such provision, nor in any
way to affect the validity of this Agreement or any provisions hereof or the right of any party
hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach
of any of the provisions of this Agreement shall be effective unless set forth in a written
instrument executed by the party against whom or which enforcement of such waiver is sought; and no
waiver of any such breach shall be construed or deemed to be a waiver of any other or subsequent
breach.

13.5 Assignability. This Agreement may not be assigned by either party to any third party without
the prior written consent of the other party: except that (i) either party may assign this
Agreement, without the prior written consent of the other party, to any of its Affiliates, to any
purchaser of all or substantially all of its assets or to any successor corporation resulting from
any merger or consolidation with or into such corporation and (ii) ANI may assign this Agreement,
without the prior written consent of JDS, to any purchaser of the Facility. In the event of any
such assignment, the assignee shall expressly assume in writing the performance of all the terms
and conditions of this Agreement and all of the obligations to be performed by the assignor. Any
assignment not in accordance with this Agreement shall be void.

13.6 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance
with the laws of Delaware without regard to its conflicts of laws principles. The parties consent
to the personal jurisdiction and venue of the United States Federal Courts and further consent that
any process, notice of motion or other application to either such court or a judge thereof may be
served by registered or certified mail or by personal service, provided that a reasonable time for
appearance is allowed.

13.7 Severability. All of the provisions of this Agreement are intended to be distinct and
severable. If any provision of this Agreement is or is declared to be invalid or unenforceable in
any jurisdiction, it shall be ineffective in such jurisdiction only to the extent of such
invalidity or unenforceability. Such invalidity or unenforceability shall not affect either the
balance of such provision, to the extent it is not invalid or unenforceable, or the remaining
provisions hereof, nor render invalid or unenforceable such provision in any other jurisdiction.

13.8 Publicity. Neither party shall issue any press release or make any similar public announcement
concerning the transactions contemplated in this Agreement, except as may be required by law
(including federal securities law) or judicial order, without the prior written consent of the
other party. Neither party shall issue any press release or make any similar announcement which
includes the name of the other party or its affiliates or otherwise uses the name of the other
party in any public statement or publicly released document except as required by law (including
federal securities law) or with the prior written consent of the other party.

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13.9 Survival. The provisions of Section 2.5 (Delivery), Section 2.7 (Inspection of
Products), Section 2.9 (Recalls), Section 3 (Representation and Warranties),
Section 4.4 (Rights and Duties Upon Termination), Article V (Indemnification),
Article VII (Confidentiality), Section 13.6 (Governing Law; Jurisdiction),
Section 13.8 (Publicity) and this Section 13.9 (Survival) shall survive the
termination or expiration of this Agreement for any reason.

13.10 Headings. The headings of sections and subsections have been included for convenience only
and shall not be considered in interpreting this Agreement.

13.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, and all of which together shall constitute one and the same Agreement.
This Agreement may be executed and delivered via electronic facsimile transmission with the same
force and effect as if it were executed and delivered by the parties simultaneously in the presence
of one another.

13.12 Execution. At the time of execution of this Agreement, the parties shall cause their
authorized officers to execute two original copies of this Agreement, one copy of which shall be
maintained by each party at that party’s offices. Each party represents that the person who
executes this Agreement is authorized and empowered to obligate and bind his party under this
Agreement.

13.13 Facsimile Signatures. Any counterpart of this Agreement may be signed and transmitted by
facsimile with the same force and effect as if such counterpart was an ink-signed original.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the date
first written above.

	 	 	 	 	 
	ANIP ACQUISITION COMPANY 

ANI PHARMACEUTICALS, INC.

 	 
	By:  	/s/ Jane Williams
 	 
	 	Name:  	Jane Williams                                  	 
	 	Title:  	Sr. Vice President, Sales and Marketing 	 
	 	Date:  	December 6, 2007 	 
	 

	 	 	 	 	 
	JDS PHARMACEUTICALS, LLC

 	 
	By:  	/s/ Richard P. Gilbert
 	 
	 	Name:  	Richard P. Gilbert 	 
	 	Title:  	Vice President, Operations 	 
	 	Date:  	January 2, 2008 	 
	 

 17 of 17exv10w2

 

Exhibit 10.2

ATTACHMENT A

ERI CORP.

2001 STOCK OPTION PLAN

     1. Establishment, Purpose and Term of Plan.

          1.1 Establishment. The ERI Corp. 2001 Stock Option Plan (the “Plan”) is hereby established effective
as of April 18, 2001 (the “Effective Date”).

          1.2 Purpose. The purpose of the Plan is to advance the interests of ERI Corp. (“ERI” or the
“Company”) and its stockholders by providing an incentive to attract, retain and reward persons
performing services for ERI and by motivating such persons to contribute to the growth and
profitability of ERI.

          1.3 Term of Plan. The Plan shall continue in effect until the earlier of its termination by the
Board or the date on which all of the shares of Stock available for issuance under the Plan have
been issued and all restrictions on such shares under the terms of the Plan and the agreements
evidencing Options granted under the Plan have lapsed. However, all Options shall be granted, if at
all, within ten (10) years from the earlier of the date the Plan is adopted by the Board or the
date the Plan is duly approved by the stockholders of the Company.

     2. Definitions and Construction.

          2.1 Definitions. Whenever used herein, the following terms shall have their respective meanings set
forth below:

               (a) “Board” means the Board of Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, “Board” also means such Committee(s).

               (b) “Code” means the Internal Revenue Code of 1986, as amended, and all applicable regulations
promulgated thereunder.

               (c) “Committee” means the Compensation Committee or other committee of the Board duly appointed to
administer the Plan and having such powers as shall be specified by the Board. Unless the powers of
the Committee have been specifically limited, the Committee shall have all of the powers of the
Board granted herein, including, without limitation, the power to amend or terminate the Plan at
any time, subject to the terms of the Plan and any applicable limitations imposed by law.

               (d) “Company” means ERI Corp., a Delaware corporation, or any successor corporation thereto.

               (e) “Consultant” means any person, including an advisor, engaged by

 

 

ERI to render services other than as an Employee or a Director.

               (f) “Director” means a member of the Board or of the board of directors of any other ERI parent,
subsidiary or sister company.

               (g) “Employee” means any person treated as an employee (including an officer or a Director who is
also treated as an employee) in the records of ERI; provided, however, that neither service as a
Director nor payment of a director’s fee shall be sufficient to constitute employment for purposes
of the Plan.

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

               (i) “Fair Market Value” means, as of any date, the value of a share of Stock or other property as
determined by the Board, in its sole discretion, or by the Company,
in its sole discretion, if such
determination is expressly allocated to the Company herein, subject to the following:

                    (i) If, on such date, there is a public market for the Stock, the Fair Market Value of a share of
Stock shall be the closing sale price of a share of Stock (or the mean of the closing bid and asked
prices of a share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National
Market, the Nasdaq Small-Cap Market or such other national or regional securities exchange or
market system constituting the primary market for the Stock, as reported in the Wall Street
Journal or such other source as the Company deems reliable. If the relevant date does not fall
on a day on which the Stock has traded on such securities exchange or market system, the date on
which the Fair Market Value shall be established shall be the last day on which the Stock was so
traded prior to the relevant date, or such other appropriate day as shall be determined by the
Board, in its sole discretion.

                    (ii) If, on such date, there is no public market for the Stock, the Fair Market Value of a share of
Stock shall be as determined by the Board without regard to any restriction other than a
restriction which, by its terms, will never lapse.

               (j) “Incentive Stock Option” means an Option intended to be (as set forth in the Option Agreement)
and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code.

               (k) “Insider” means an Officer or a Director of the Company or any other person whose transactions
in Stock are subject to Section 16 of the Exchange Act.

               (l) “Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Option
Agreement) or which does not qualify as an Incentive Stock Option.

               (m) “Option” means a right to purchase Stock (subject to adjustment as

 

 

provided in Section 4.2) pursuant to the terms and conditions of the Plan. An Option may be
either an Incentive Stock Option or a Nonstatutory Stock Option.

               (n) “Option Agreement” means a written agreement between the Company and an Optionee setting forth
the terms, conditions and restrictions of the Option granted to the Optionee and any shares
acquired upon the exercise thereof.

               (o) “Optionee” means a person who has been granted one or more Options.

               (p) “Parent Corporation” means any present or future “parent corporation” of the Company, as denned
in Section 424(e) of the Code.

               (q) “Participating Company” means the Company or any Parent Corporation or Subsidiary Corporation.

               (r) “Participating Company Group” means, at any point in time, all corporations collectively which
are then Participating Companies.

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

               (t) “Stock” means the common stock of the Company, as adjusted from time to time in accordance with
Section 4.2.

               (u) “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company,
as defined in Section 424(f) of the Code.

               (v) “Ten Percent Owner Optionee” means an Optionee who, at the time an Option is granted to the
Optionee, owns stock possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of a Participating Company within the meaning of Section 422(b)(6) of the
Code.

          2.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated
by the context, the singular shall include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

 

 

     3. Administration.

          3.1 Administration by the Board. The Plan shall be administered by the Board. All questions of
interpretation of the Plan or of any Option shall be determined by the Board, and such
determinations shall be final and binding upon all persons having an interest in the Plan or such
Option. Any officer of a Participating Company shall have the authority to act on behalf of the
Company in respect of any matter, right, obligation, determination or election which is the
responsibility of or which is allocated to the Company herein, provided the officer has apparent
authority in respect of such matter, right, obligation, determination or election.

          3.2 Administration in Respect of Insiders. In respect of participation by Insiders in the Plan, at
any time that any class of equity security of the Company is registered pursuant to Section 12 of
the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of
Rule 16b-3.

          3.3 Powers of the Board. In addition to any other powers set forth in the Plan and subject to the
provisions of the Plan, the Board shall have the full and final power and authority, in its sole
discretion:

               (a) to determine the persons to whom; and the time or times at which, Options shall be granted and
the number of shares of Stock to be subject to each Option;

               (b) to designate Options as Incentive Stock Options or Nonstatutory Stock Options;

               (c) to determine the Fair Market Value of shares of Stock or other property;

               (d) to determine the terms, conditions and restrictions applicable to each Option (which need not
be identical) and any shares acquired upon the exercise thereof, including, without limitation, (i)
the exercise price of the Option, (ii) the method of payment for shares purchased upon the exercise
of the Option, (iii) the method for satisfaction of any tax withholding obligation arising in
connection with the Option or such shares, including by the withholding or delivery of shares of
stock, (iv) the timing, terms and conditions of the exercisability of the Option or the vesting of
any shares acquired upon the exercise thereof, (v) the time of the expiration of the Option, (vi)
the effect of the Optionee’s termination of employment or service with the Participating Company
Group on any of the foregoing, and (vii) all other terms, conditions and restrictions applicable to
the Option or such shares not inconsistent with the terms of the Plan;

               (e) to approve one or more forms of Option Agreement;

               (f) to amend, modify, extend, renew, or grant a new Option in substitution for, any Option or to
waive any restriction or condition applicable to any Option or

 

 

any shares acquired upon the exercise thereof,

               (g) to amend the exercisability of any Option or the vesting of any shares acquired upon the
exercise thereof, including in respect of the period following an Optionee’s termination of
employment or service with the Participating Company Group;

               (h) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt
supplements to, or alternative versions of, the Plan, including, without limitation, as the Board
deems necessary or desirable to comply with the laws of, or to accommodate the tax policy or custom
of, foreign jurisdictions whose citizens may be granted Options; and

               (i) to correct any defect, rectify any omission or reconcile any inconsistency in the Plan or any
Option Agreement and to make all other determinations and take such other actions in respect of the
Plan or any Option as the Board may deem advisable to the extent consistent with the Plan and
applicable law.

     4. Shares Subject to Plan.

          4.1
Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the
maximum aggregate number of shares of Stock that may be issued under the Plan shall be two and a
half million (2,500,000) and shall consist of authorized but unissued or reacquired shares of Stock
or any combination thereof. If an outstanding Option for any reason expires or is terminated or
canceled, or if shares of Stock acquired, subject to repurchase, upon the exercise of an Option are
repurchased by the Company, the shares of Stock allocable to the unexercised portion of such Option
or such repurchased shares of Stock shall again be available for issuance under the Plan.

          4.2 Adjustments for Changes in Capital Structure. In the event of any stock dividend, stock split,
reverse stock split, recapitalization, combination, reclassification or similar change in the
capital structure of the Company, appropriate adjustments shall be made in the number and class of
shares subject to the Plan and to any outstanding Options and in the exercise price per share of
any outstanding Options. If a majority of the shares which are of the same class as the shares that
are subject to outstanding Options are exchanged for, converted into, or otherwise become (whether
or not pursuant to an Ownership Change Event, as defined in Section 8.1) shares of another
corporation (the “New Shares”), the Board may unilaterally amend the outstanding Options to provide
that such Options are exercisable for New Shares. In the event of any such amendment the number of
shares subject to, and the exercise price per share of, the outstanding Options shall be adjusted
in a fair and equitable manner as determined by the Board, in its sole discretion. Notwithstanding
the foregoing, any fractional share resulting from an adjustment pursuant to this Section 4.2 shall
be rounded up or down to the nearest whole number, as determined by the Board, and in no event may
the exercise price of any Option be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to this Section 4.2
shall be final, binding and conclusive.

 

 

     5. Eligibility and Option Limitations.

          5.1
Persons Eligible for Options. Options may be granted only to Employees, Consultants, and
Directors. For purposes of the foregoing sentence, “Employees,” “Consultants” and “Directors” shall
include prospective Employees, prospective Consultants and prospective Directors to whom Options
are granted in connection with written offers of employment or other service relationship with the
Participating Company Group. Eligible persons may be granted more than one (1) Option.

          5.2 Option Grant Restrictions. Any person who is not an Employee on the effective date of the grant
of an Option to such person may be granted only a Nonstatutory Stock Option. An Incentive Stock
Option granted to a prospective Employee upon the condition that such person become an Employee
shall be deemed granted effective on the date such person commences service with a Participating
Company, with an exercise price determined as of such date in accordance with Section 6.1.

          5.3 Fair Market Value Limitation. To the extent that Options designated as Incentive Stock Options
(granted under all stock option, plans of the Participating Company Group, including the Plan)
become exercisable by an Optionee for the first time during any calendar year for Stock having an
aggregate Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of
such Options which exceeds such amount shall be treated as Nonstatutory Stock Options. For purposes
of this Section 5.3, Options designated as Incentive Stock Options shall be taken into account in
the order in which they were granted, and the Fair Market Value of Stock shall be determined as of
the time the Option in respect of such Stock is granted. If the Code is amended to provide for a
different limitation from that set forth in this Section 5.3, such different limitation shall be
deemed incorporated herein effective as of the date and in respect of such Options as required or
permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in
part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this
Section 5.3, the Optionee may designate which portion of such Option the Optionee is exercising. In
the absence of such designation, the Optionee shall be deemed to have exercised the Incentive Stock
Option portion of the Option first. Separate certificates representing each such portion shall be
issued upon the exercise of the Option.

     6. Terms and Conditions of Options. Options shall be evidenced by Option Agreements
specifying the number of shares of Stock covered thereby, in such form as the Board shall from time
to time establish. Option Agreements may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and conditions:

          6.1 Exercise Price. The exercise price for each Option shall be established in the sole discretion
of the Board; provided, however, that (a) the exercise price per share for an Incentive Stock
Option shall be not less than the Fair Market Value of a share of Stock on the effective date of
grant of the Option, (b) the exercise price per share for a Nonstatutory Stock

 

 

Option shall be not less than eighty-five percent (85%) of the Fair Market Value of a share of
Stock on the effective date of grant of the Option, and (c) no Option granted to a Ten Percent
Owner Optionee shall have an exercise price per share less than one hundred ten percent (110%) of
the Fair Market Value of a share of Stock on the effective date of grant of the Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock
Option) may be granted with an exercise price lower than the minimum exercise price set forth above
if such Option is granted pursuant to an assumption or substitution for another option in a manner
qualifying under the provisions of Section 424(a) of the Code.

          6.2 Exercise Period. Options shall be exercisable at such time or times, or upon such event or
events, and subject to such terms, conditions, performance criteria, and restrictions as shall be
determined by the Board and set forth in the Option Agreement evidencing such Option; provided,
however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the
effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent
Owner Optionee shall be exercisable after the expiration of five (5) years after the effective date
of grant of such Option, and (c) no Option granted to a prospective Employee, prospective
Consultant or prospective Director may become exercisable prior to the date on which such person
commences service with a Participating Company.

          6.3 Payment of Exercise Price.

               (a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the exercise
price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in
cash by check, or cash equivalent, (ii) by tender to the Company of shares of Stock owned by the
Optionee having a Fair Market Value (as determined by the Company without regard to any
restrictions on transferability applicable to such stock by reason of federal or state securities
laws or agreements with an underwriter for the Company) not less than the exercise price, (iii) by
the assignment of the proceeds of a sale or loan in respect of some or all of the shares being
acquired upon the exercise of the Option (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System) (a “Cashless
Exercise”), (iv) by the Optionee’s promissory
note in a form approved by the Company, (v) by such other consideration as may be approved by the
Board from time to time to the extent permitted by applicable law, or (vi) by any combination
thereof. The Board may at any time or from time to time, by adoption of or by amendment to the
standard forms of Option Agreement described in Section 7, or by other means, grant Options which
do not permit all of the foregoing forms of consideration to be used in payment of the exercise
price or which otherwise restrict one or more forms of consideration.

               (b) Tender of Stock. Notwithstanding the foregoing, an Option may not be exercised by tender to the
Company of shares of Stock to the extent such tender of Stock would constitute a violation of the
provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.
Unless otherwise provided by the Board, an Option may not be exercised by tender to the Company of
shares of Stock unless such shares either have been

 

 

owned by the Optionee for more than six (6) months or were not acquired directly from the Company.

               (c) Cashless Exercise. The Company reserves, at any and all times, the right, in the Company’s sole
and absolute discretion, to establish, decline to approve or terminate any program or procedures
for the exercise of Options by means of a Cashless Exercise.

               (d) Payment by Promissory Note. No promissory note shall be permitted if the exercise of an Option
using a promissory note would be a violation of any law. Any permitted promissory note shall be on
such terms as the Board shall determine at the time the Option is granted. The Board shall have the
authority to permit or require the Optionee to secure any promissory note used to exercise an
Option with the shares of Stock acquired upon the exercise of the Option or with other collateral
acceptable to the Company. Unless otherwise provided by the Board, if the Company at any time is
subject to the regulations promulgated by the Board of Governors of the Federal Reserve System or
any other governmental entity affecting the extension of credit in connection with the Company’s
securities any promissory note shall comply with such applicable regulations, and the Optionee
shall pay the unpaid principal and accrued interest, if any, to the extent necessary to comply with
such applicable regulations.

          6.4 Tax Withholding. The Company shall have the right, but not the obligation, to deduct from the
shares of Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender
of a number of whole shares of Stock having a Fair Market Value, as determined by the Company,
equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to
be withheld by the Participating Company Group in respect of such Option or the shares acquired
upon the exercise thereof. Alternatively or in addition, in its sole discretion, the Company shall
have the right to require the Optionee, through payroll withholding, cash payment or otherwise,
including by means of a Cashless Exercise, to make adequate provision for any such tax withholding
obligations of the Participating Company Group arising in connection with the Option or the shares
acquired upon the exercise thereof. The Company shall have no obligation to deliver shares of Stock
or to release shares of Stock from an escrow established pursuant to the Option Agreement until the
Participating Company Group’s tax withholding obligations have been satisfied by the Optionee.

          6.5 Repurchase Rights. Shares issued under the Plan may be subject to a right of first refusal, one
or more repurchase options, or other conditions and restrictions as determined by the Board, in its
sole discretion, at the time the Option is granted. The Company shall have the right to assign at
any time any repurchase right it may have, whether or not such right is then exercisable, to one or
more persons as may be selected by the Company. Upon request by the Company, each Optionee shall
execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock
hereunder and shall promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing
any such transfer restrictions.

 

 

     7. Standard Forms of Option Agreement.

          7.1 Incentive Stock Options. Unless otherwise provided by the Board at the time the Option is
granted, an Option designated as an “Incentive Stock Option” shall comply with and be subject to
the terms and conditions set forth in the form of Immediately Exercisable Incentive Stock Option
Agreement adopted by the Board concurrently with its adoption of the Plan and as amended from time
to time.

          7.2 Nonstatutory Stock Options. Unless otherwise provided by the Board at the time the Option is
granted, an Option designated as a “Nonstatutory Stock Option” shall comply with and be subject to
the terms and conditions set forth in the form of Immediately Exercisable Nonstatutory Stock Option
Agreement adopted by the Board concurrently with its adoption of the Plan and as amended from time
to time.

          7.3 Standard Term of Options. Except as otherwise provided in Section 6.2 or by the Board in the
grant of an Option, any Option granted hereunder shall have a term of ten (10) years from the
effective date of grant of the Option.

          7.4 Authority to Vary Terms. The Board shall have the authority from time to time to vary the terms
of any of the standard forms of Option Agreement described in this Section 7 either in connection
with the grant or amendment of an individual Option or in connection with the authorization of a
new standard form or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of Option Agreement are not inconsistent with the terms
of the Plan. Such authority shall include, but not by way of limitation, the authority to grant
Options which are not immediately exercisable.

     8. Transfer of Control.

          8.1 Definitions.

               (a) An “Ownership Change Event” shall be deemed to have occurred if any of the following occurs in
respect of the Company:

                    (i) the direct or indirect sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company;

                    (ii) a merger or consolidation in which the Company is a party;

                    (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or

                    (iv) a liquidation or dissolution of the Company.

 

 

               (b) A “Transfer of Control” shall mean an Ownership Change Event or a series of related Ownership
Change Events (collectively, the “Transaction”) wherein the stockholders of the Company immediately
before the Transaction do not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company’s voting stock immediately before the
Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the corporation or
corporations to which the assets of the Company were transferred (the “Transferee Corporation(s)”),
as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more subsidiary corporations.
The Board shall have the right to determine whether multiple sales or exchanges of the voting stock
of the Company or multiple Ownership Change Events are related, and its determination shall be
final, binding and conclusive.

          8.2
Effect of Transfer of Control on Options. In the event of a Transfer of Control, the surviving,
continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be
(the “Acquiring Corporation”), must either assume the Company’s rights and obligations under
outstanding Options or substitute for outstanding Options substantially equivalent options for the
Acquiring Corporation’s stock. For purposes of this Section 8.2, an Option shall be deemed assumed
if, following the Transfer of Control, the Option confers the right to purchase in accordance with
its terms and conditions, for each share of Stock subject to the Option immediately prior to the
Transfer of Control, the consideration (whether stock, cash or other securities or property) to
which a holder of a Share of Stock on the effective date of the Transfer of Control was entitled.
Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to the Transfer of
Control and any consideration received pursuant to the Transfer of Control in respect of such
shares shall continue to be subject to all applicable provisions of the Option Agreement evidencing
such Option except as otherwise provided in such Option Agreement. Furthermore, notwithstanding the
foregoing, if the corporation the stock of which is subject to the outstanding Options immediately
prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Transfer of
Control is the surviving or continuing corporation and immediately after such Ownership Change
Event less than fifty percent (50%) of the total combined voting power of its voting stock is held
by another corporation or by other corporations that are members of an affiliated group within the
meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the
Code, the outstanding Options shall not terminate unless the Board otherwise provides in its sole
discretion.

     9. Provision of Information. At least annually, copies of the Company’s balance
sheet and income statement for the just completed fiscal year shall be made available to each
Optionee and purchaser of shares of Stock upon the exercise of an Option. The Company shall not be
required to provide such information to persons whose duties in connection with the Company assure
them access to equivalent information.

 

 

     10. Nontransferability of Options. During the lifetime of the Optionee, an Option shall be
exercisable only by the Optionee or the Optionee’s guardian or
legal representative. No Option shall
be assignable or transferable by the Optionee, except by will or by the laws of descent and
distribution.

     11. Transfer of Company’s Rights. In the event any Participating Company assigns, other
than by operation of law, to a third person, other than another Participating Company, any of the
Participating Company’s rights to repurchase any shares of Stock acquired upon the exercise of an
Option, the assignee shall pay to the assigning Participating Company the value of such right as
determined by the Company in the Company’s sole discretion. Such consideration shall be paid in
cash. In the event such repurchase right is exercisable at the time of such assignment, the value
of such right shall be not less than the Fair Market Value of the shares of Stock which may be
repurchased under such right (as determined by the Company) minus the repurchase price of such
shares. The requirements of this Section 11 regarding the minimum consideration to be received by
the assigning Participating Company shall not inure to the benefit of the Optionee whose shares of
Stock are being repurchased. Failure of a Participating Company to comply with the provisions of
this Section 11 shall not constitute a defense or otherwise prevent the exercise of the repurchase
right by the assignee of such right.

     12. Indemnification. In addition to such other rights of indemnification as they may have
as members of the Board or officers or employees of the Participating Company Group, members of the
Board and any officers or employees of the Participating Company Group to whom authority to act for
the Board or the Company is delegated shall be indemnified by the Company against all reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action, suit or proceeding
that such person is liable for gross negligence, bad faith or intentional misconduct in duties;
provided, however, that within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense
to handle and defend the same.

     13. Termination or Amendment Plan. The Board may terminate or amend the Plan at any time.
However, subject to changes in applicable law, regulations or rules that would permit otherwise,
without the approval of the Company’s stockholders there shall be (a) no increase in the maximum
aggregate number of shares of Stock that may be issued under the Plan (except by operation of the
provisions of Section 4.2), (b) no change in the class of persons eligible to receive Incentive
Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s
stockholders under any applicable law, regulation or rule. In any event, no termination or
amendment of the Plan may adversely affect any then outstanding

 

 

Option or any unexercised portion thereof, without the consent of the Optionee, unless such
termination or amendment is required to enable an Option designated as an Incentive Stock Option to
qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation
or rule.

     14. Stockholder Approval. The Plan or any increase in the maximum number of shares of Stock
issuable thereunder as provided in Section 4.1 (the “Maximum Shares”) shall be approved by the
stockholders of the Company within twelve (12) months of the date of adoption thereof by the Board.
Options granted prior to stockholder approval of the Plan or in excess of the Maximum Shares
previously approved by the stockholders shall become exercisable no earlier than the date of
stockholder approval of the Plan or such increase in the Maximum Shares, as the case may be.

     IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing ERI CORP.
2001 Stock Option Plan was duly adopted by the Board on April 18, 2001.

	 	 	 
	 

	 	
	 

	 	Hans Peter MICHELET, Secretary

#674632 vl-ERI 2000 STOCK OPTION PLAN

 

 

PLAN HISTORY

Stockholders ratified the Plan and form of Agreement on 18 April 2001.

Directors adopted and approved the Plan and form of Agreement by unanimous resolution on 18 April
2001.

 

 

THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED WITH THE STATE
CORPORATION COMMISSION OF THE COMMONWEALTH OF VIRGINIA AND THE ISSUANCE OF SUCH SECURITIES OR THE
PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY THE VIRGINIA SECURITIES
ACT, CODE OF VIRGINIA §
13.1 – 501 ET SEQ. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.

ERI CORP.

IMMEDIATELY EXERCISABLE

INCENTIVE STOCK OPTION AGREEMENT

     THIS IMMEDIATELY EXERCISABLE INCENTIVE STOCK OPTION
AGREEMENT (the “Option Agreement”) is made and
entered into as of                      2001, by and between ERI
Corp. (“ERI” or the “Company”) and
                     (the “Optionee”).

     The Company has granted to the Optionee pursuant to the ERI Corp. 2001 Stock Option Plan (the
“Plan”) an option to purchase certain shares of Stock, upon the terms and conditions set forth in
this Option Agreement (the “Option”). The Option shall in all respects be subject to the terms and
conditions of the Plan, the provisions of which are incorporated herein by reference.

     1. Definitions and Construction.

          1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Plan. Whenever used herein, the following terms shall have their
respective meanings set forth below:

               (a) “Date
of Option Grant” means                      2001.

 

 

               (b) “Number
of Option Shares” means                                         
 (        
       ) shares of the common stock of the Company (the
“Stock”), as adjusted from time to time pursuant to Section 9.

               (c) “Exercise
Price” means $
                     per share of Stock, as adjusted from time to time pursuant to
Section 9.

               (d) “Initial Exercise Date” means the Date of Option Grant.

               (e) “Initial
Vesting Date” is coterminous with the Date of Option Grant,
or                            
             .

               (f) “Vested Ratio” means, on any relevant date, the ratio determined as follows:

	 	 	 	 	 
	 	 	Vested Ratio
	Prior to Initial Vesting Date

	 	 	0	 
	 
	 	 	 	 
	On Initial Vesting Date, provided the
Optionee’s Service has not
terminated prior to such date

	 	—/—

	 
	 	 	 	 
	Plus
	 	 	 	 
	 
	 	 	 	 
	For each full year of the Optionee’s
continuous Service from the Initial Vesting Date until the Vested Ratio equals 1/1, an additional

	 	—/—

               (g) “Option
Expiration Date” means the date ten (10) years after the Date of Option Grant.

               (h) “Company” means ERI Corp., a Delaware corporation, or any successor corporation thereto and as
that term is defined in the ERI Corp. 2001 Option Plan.

               (i) “Disability” means the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionee’s position with the
Participating Company Group because of the sickness or injury of the Optionee.

               (j) “Securities Act” means the Securities Act of 1933, as amended.

 

 

               (k) “Service” means the Optionee’s employment or service with the Participating Company Group,
whether in the capacity of an Employee, a Director or a Consultant. The Optionee’s Service shall
not be deemed to have terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the Participating Company for
which the Optionee renders such Service, provided that there is no interruption or termination of
the Optionee’s Service. Furthermore, the Optionee’s Service with the Participating Company Group
shall not be deemed to have terminated if the Optionee takes any military leave, sick leave, or
other bona fide leave of absence approved by the Company; provided, however, that if any such leave
exceeds ninety (90) days, on the ninety-first (91st) day of such leave the Optionee’s Service shall
be deemed to have terminated unless the Optionee’s right to return to Service with the
Participating Company Group is guaranteed by statute or contract. Notwithstanding the foregoing,
unless otherwise designated by the Company or required by law, a leave of absence shall not be
treated as Service for purposes of determining the Optionee’s Vested Ratio. The Optionee’s Service
shall be deemed to have terminated either upon an actual termination of Service or when the
corporation for which the Optionee performs Service ceases to be a Participating Company. Subject
to the foregoing, the Company, in its sole discretion, shall determine whether the Optionee’s
Service has terminated and the effective date of such termination.

          1.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning of interpretation of any provision of this Option Agreement. Except when
otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term “or” is not intended to be exclusive, unless the context
clearly requires otherwise.

     2. Tax Consequences.

          2.1 Tax Status of Option. This Option is intended to be an Incentive Stock Option within the
meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this
Option qualifies as such. The Optionee should consult with the Optionee’s own tax advisor regarding
the tax effects of this Option and the requirements necessary to obtain favorable income tax
treatment under Section 422 of the Code, including, but not limited to, holding period
requirements. (NOTE: If the aggregate Exercise Price of the Option (that is, the Exercise Price
multiplied by the Number of Option Shares) plus the aggregate exercise price of any other Incentive
Stock Options held by the Optionee (whether granted pursuant to the Plan or any other stock option
plan of the Participating Company Group) is greater than One Hundred Thousand Dollars ($100,000),
the Optionee should contact the President of the Company to ascertain whether the entire Option
qualifies as an Incentive Stock Option.)

          2.2 Election Under Section 83(b) of the Code. If the Optionee exercises this Option to purchase
shares of Stock that are both nontransferable and subject to a substantial risk of forfeiture, the
Optionee understands that the Optionee should consult with the Optionee’s tax advisor regarding the
advisability of filing with the Internal Revenue Service an election under Section 83(b) of the
Code, which must be

 

 

filed no later than thirty (30) days after the date on which the Optionee exercises the Option.
Shares acquired upon exercise of the Option are nontransferable and subject to a substantial risk
of forfeiture if, for example, (a) they are unvested and are subject to a right of the Company to
repurchase such shares at the Optionee’s original purchase price if the Optionee’s Service
terminates, (b) the Optionee is an Insider and exercises the Option within six (6) months of the
Date of Option Grant (if a class of equity security of the Company is registered under Section 12
of the Exchange Act), or (c) the Optionee is subject to a restriction on transfer to comply with
“Pooling-of-Interests Accounting” rules. Failure to file an election under Section 83(b), if
appropriate, may result in adverse tax consequences to the Optionee. The Optionee acknowledges that
the Optionee has been advised to consult with a tax advisor prior to the exercise of the Option
regarding the tax consequences to the Optionee of the exercise of the Option. AN ELECTION UNDER
SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON WHICH THE OPTIONEE PURCHASES SHARES.
THIS TIME PERIOD CANNOT BE EXTENDED. THE OPTIONEE ACKNOWLEDGES THAT TIMELY FILING OF A SECTION
83(b) ELECTION IS THE OPTIONEE’S SOLE RESPONSIBILITY, EVEN IF THE OPTIONEE REQUESTS THE COMPANY OR
ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.

     3. Administration. All questions of interpretation concerning this Option Agreement shall be
determined by the Board. All determinations by the Board shall be final and binding upon all
persons having an interest in the Option. Any officer of a Participating Company shall have the
authority to act on behalf of the Company in respect of any matter, right, obligation, or election
which is the responsibility of or which is allocated to the Company herein, provided the officer
has apparent authority in respect of such matter, right, obligation, or election.

 

 

     4. Exercise of the Option.

          4.1 Right to Exercise.

               (a) Except as otherwise provided herein, the Option shall be exercisable on and after the Initial
Exercise Date and prior to the termination of the Option (as provided in Section 6) in an amount
not to exceed the Number of Option Shares less the number of shares previously acquired upon
exercise of the Option, subject to the Optionee’s agreement that any shares purchased upon exercise
are subject to the Company’s repurchase rights set forth in Section 11 and Section 12.
Notwithstanding the foregoing, except as provided in Section 4.1(b), the aggregate Fair Market
Value of the shares of Stock in respect of which the Optionee may exercise the Option for the first
time during any calendar year, when added to the aggregate Fair Market Value of the shares subject
to any other options designated as Incentive Stock Options granted to the Optionee under all stock
option plans of the Participating Company Group prior to the Date of Option Grant in respect of
which such options are exercisable for the first time during the same calendar year, shall not
exceed One Hundred Thousand Dollars ($100,000). For purposes of the preceding sentence, options
designated as Incentive Stock Options shall be taken into account in the order in which they were
granted, and the Fair Market Value of shares of stock shall be determined as of the time the option
in respect of such shares is granted. Such limitation on exercise shall be referred to in this
Option Agreement as the “ISO Exercise Limitation” If Section 422 of the Code is amended to provide
for a different limitation from that set forth in this Section 4.1(a), the ISO Exercise Limitation
shall be deemed amended effective as of the date required or permitted by such amendment to the
Code. The ISO Exercise Limitation shall terminate upon the earlier of (i) the Optionee’s
termination of Service, (ii) the day immediately prior to the effective date of a Transfer of
Control in which the Option is not assumed or substituted for by the Acquiring Corporation as
provided in Section 8, or (iii) the day ten (10) days prior to the Option Expiration Date. Upon
such termination of the ISO Exercise Limitation, the Option shall be deemed a Nonstatutory Stock
Option to the extent of the number of shares subject to the Option which would otherwise exceed the
ISO Exercise Limitation.

               (b) Notwithstanding any other provision of this Option Agreement, if compliance with the ISO
Exercise Limitation as set forth in Section 4.1(a) will result in the exercisability of any Vested
Shares (as defined in Section 11.2) being delayed more than thirty (30) days beyond the date such
shares become Vested Shares (the “Vesting Date”), the Option shall be deemed to be two (2) options.
The first option shall be for the maximum portion of the Number of Option Shares that can comply
with the ISO Exercise Limitation without causing the Option to be unexercisable in the aggregate as
to Vested Shares on the Vesting Date for such shares. The second option, which shall not be treated
as an Incentive Stock Option as described in section 422(b) of the Code, shall be for the balance
of the Number of Option Shares; that is, those such shares which, on the respective Vesting Date
for such shares, would be unexercisable if included in the first option and thereby made subject to
the ISO Exercise Limitation. Shares treated as subject to the second option shall be exercisable on
the same terms and

 

 

at the
same time as set forth in this Option Agreement; provided, however, that (i) the second
sentence of Section 4.1 (a) shall not apply to the second option and (ii) each such share shall
become a Vested Share on the Vesting Date on which such share must first be allocated to the second
option pursuant to the preceding sentence. Unless the Optionee specifically elects to the contrary
in the Optionee’s written notice of exercise, the first option shall be deemed to be exercised
first to the maximum possible extent and then the second option shall be deemed to be exercised.

          4.2 Method of Exercise. Exercise of the Option shall be by written notice to the Company which must
state the election to exercise the Option, the number of whole shares of Stock for which the Option
is being exercised and such other representations and agreements as to the Optionee’s investment
intent in respect of such shares as may be required pursuant to the provisions of this Option
Agreement. The written notice must be signed by the Optionee and must be delivered in person, by
certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by
such other means as the Company may permit, to the President of the Company, or other authorized
representative of the Participating Company Group, prior to the termination of the Option as set
forth in Section 6, accompanied by (i) full payment of the aggregate Exercise Price for the number
of shares of Stock being purchased and (ii) an executed copy, if required herein, of the then
current forms of escrow and security agreement referenced below. The Option shall be deemed to be
exercised upon receipt by the Company of such written notice, the aggregate Exercise Price, and, if
required by the Company, such executed agreements.

          4.3 Payment of Exercise Price.

               (a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate
Exercise Price for the number of shares of Stock for which the Option is being exercised shall be
made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company of whole shares of
Stock owned by the Optionee having a Fair Market Value (as determined by the Company without regard
to any restrictions on transferability applicable to such stock by reason of federal or state
securities laws or agreements with an underwriter for the Company) not less than the aggregate
Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(c), (iv) in the
Company’s sole discretion at the time the Option is exercised, by cash for a portion of the
aggregate Exercise Price not less than the par value of the shares being acquired and the
Optionee’s promissory note for the balance of the aggregate Exercise Price, or (v) by any
combination of the foregoing.

               (b) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender to
the Company of shares of Stock to the extent such tender of Stock would constitute a violation of
the provisions of any law, regulation or agreement restricting the redemption of the Company’s
stock. The Option may not be exercised by tender to the Company of shares of Stock unless such
shares either have been owned by the Optionee for more than six (6) months or were not acquired,
directly or indirectly, from the Company.

 

 

               (c) Cashless Exercise. A “Cashless Exercise” means the assignment in a form acceptable to the
Company of the proceeds of a sale or loan in respect of some or all of the shares of Stock acquired
upon the exercise of the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the provisions of Regulation T
as promulgated from time to time by the Board of Governors of the Federal Reserve System). The
Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion,
to decline to approve or terminate any such program or procedure.

               (d) Payment by Promissory Note. No promissory note shall be permitted if an exercise of the
Option using a promissory note would be a violation of any law. The promissory note permitted in
clause (iv) of Section 4.3(a) shall be a full recourse note in a form satisfactory to the Company,
with principal payable no more than four (4) years after the date the Option is exercised. Interest
on the principal balance of the promissory note shall be payable in annual installments at the
minimum interest rate necessary to avoid imputed interest pursuant to all applicable sections of
the Code. Such recourse promissory note shall be secured by the shares of Stock acquired pursuant
to the then current form of security agreement as approved by the Company. At any time the Company
is subject to the regulations promulgated by the Board of Governors of the Federal Reserve System
or any other governmental entity affecting the extension of credit in connection with the Company’s
securities, any promissory note shall comply with such applicable regulations, and the Optionee
shall pay the unpaid principal and accrued interest, if any, to the extent necessary to comply with
such applicable regulations. Except as the Company in its sole discretion shall determine, the
Optionee shall pay the unpaid principal balance of the promissory note and any accrued interest
thereon upon termination of the Optionee’s Service with the Participating Company Group for any
reason, with or without cause.

          
4.4 Tax Withholding. At the time the Option is exercised, in whole or in part, or at any time
thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll and
any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding obligations of the
Participating Company Group, if any, which arise in connection with the Option, including, without
limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the
transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the
operation of any law or regulation providing for the imputation of interest, or (iv) the lapsing of
any restriction in respect of any shares acquired upon exercise of the Option. The Optionee is
cautioned that the Option is not exercisable unless the tax withholding obligations of the
Participating Company Group are satisfied. Accordingly, the Optionee may not be able to exercise
the Option when desired even though the Option is vested, and the Company shall have no obligation
to issue a certificate for such shares or release such shares from any escrow provided for herein.

 

 

          
4.5 Certificate Registration. Except in the event the Exercise Price is paid by means of a Cashless
Exercise, the certificate for the shares as to which the Option is exercised shall be registered in
the name of the Optionee, or, if applicable, in the names of the heirs of the Optionee.

          
4.6 Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the
issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all
applicable requirements of federal, state or foreign law in respect of such securities. The Option
may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation
of any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then be listed. In
addition, the Option may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect in respect of the shares issuable upon
exercise of the Option or (ii) in the opinion of legal counsel to the Company, the shares issuable
upon exercise of the Option may be issued in accordance with the terms of an applicable exemption
from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION
MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY
NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. Questions
concerning this restriction should be directed to the President of the Company. The inability of
the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the
Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to
the Option shall relieve the Company of any liability in respect of the failure to issue or sell
such shares as to which such requisite authority shall not have been obtained. As a condition to
the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law or regulation and
to make any representation or warranty with respect thereto as may be requested by the Company.

          
4.7 Fractional Shares. The Company shall not be required to issue fractional shares upon the
exercise of the Option.

     5. Nontransferability of the Option. The Option may be exercised during the lifetime of the
Optionee only by the Optionee or the Optionee’s guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the laws of descent and distribution.
Following the death of the Optionee, the Option, to the extent provided in Section 7, may be
exercised by the Optionee’s legal representative or by any person empowered to do so under the
deceased Optionee’s will or under the then applicable laws of descent and distribution.

     6. Termination of the Option. The Option shall terminate and may no longer be exercised on
the first to occur of (a) the Option Expiration Date, (b) the last

 

 

date for exercising the Option
following termination of the Optionee’s Service as described in Section 7, or (c) a Transfer of
Control to the extent provided in Section 8.

     7. Effect of Termination of Service.

          7.1 Option Exercisability.

               (a) Disability. If the Optionee’s Service with the Participating Company Group is terminated
because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on
the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the
Optionee’s guardian or legal representative at any time prior to the expiration of six (6) months
after the date on which the Optionee’s Service terminated, but in any event no later than the
Option Expiration Date. (NOTE: If the Option is exercised more than three (3) months after the date
on which the Optionee’s Service as an Employee terminated as a result of a Disability other than a
permanent and total disability as defined in Section 22(e)(3) of the Code, the Option will be
treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the extent required
by Section 422 of the Code.)

               (b) Death. If the Optionee’s Service with the Participating Company Group is terminated because of
the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on
which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or
other person who acquired the right to exercise the Option by reason of the Optionee’s death at any
time prior to the expiration of six (6) months after the date on which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date. The Optionee’s Service
shall be deemed to have terminated on account of death if the Optionee dies within thirty (30)
days after the Optionee’s termination of Service.

               (c) Other Termination of Service. If the Optionee’s Service with the Participating Company Group
terminates for any reason, except Disability or death, the Option, to the extent unexercised and
exercisable by the Optionee on the date on which the Optionee’s Service terminated, may be
exercised by the Optionee within thirty (30) days (or such other longer period of time as
determined by the Board, in its sole discretion) after the date on which the Optionee’s Service
terminated, but in any event no later than the Option Expiration Date.

          7.2 Additional Limitations on Option Exercise. Notwithstanding the provisions of Section 7.1, the
Option may not be exercised after the Optionee’s termination of Service to the extent that the shares to be acquired upon exercise of the Option would be subject to the Unvested Share
Repurchase Option as provided in Section 11. Except as the Company and the Optionee otherwise
agree, exercise of the Option pursuant to Section 7.1 following termination of the Optionee’s Service may not be made by
delivery of a promissory note as provided in Section 4.3(a).

 

 

          7.3
Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of the
Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions
of Section 4.6, the Option shall remain exercisable until three (3) months after the date the
Optionee is notified by the Company that the Option is exercisable, but in any event no later than
the Option Expiration Date. The Company makes no representation as to the tax consequences of any
such delayed exercise. The Optionee should consult with the Optionee’s own tax advisor as to the
tax consequences to the Optionee of any such delayed exercise.

          7.4 Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, if a sale within
the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the
Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on
which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the one
hundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option
Expiration Date. The Company makes no representation as to the tax consequences of any such delayed
exercise. The Optionee should consult with the Optionee’s own tax advisor as to the tax
consequences to the Optionee of any such delayed exercise.

     8. Transfer of Control.

          8.1 Definitions.

               (a) An “Ownership Change Event” shall be deemed to have occurred if any of the following occurs in
respect of the Company:

                    (i) the direct or indirect sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company;

                    (ii) a merger or consolidation in which the Company is a party;

                    (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or

                    (iv) a liquidation or dissolution of the Company.

               (b) A “Transfer of Control” shall mean an Ownership Change Event or a series of related Ownership
Change Events (collectively the “Transaction”) wherein the stockholders of the Company immediately
before the Transaction do not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company’s voting stock immediately before the
Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company or the

 

 

corporation or corporations to which the assets of the Company were transferred (the “Transferee Corporation(s)”),
as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting stock of one or
more corporations which, as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more subsidiary corporations.
The Board shall have the right to determine whether multiple sales or exchanges of the voting stock
of the Company or multiple Ownership Change Events are related, and its determination shall be
final, binding and conclusive.

          8.2 Effect of Transfer of Control on Option. In the event of a Transfer of Control, any unvested
Stock acquired by the Optionee under the Option shall vest immediately. In respect of any portion
of the Option which remains unexercised at the time of Transfer of Control, the surviving,
continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be
(the “Acquiring Corporation”), must either assume the Company’s rights and obligations under the
Option or substitute for the Option a substantially equivalent option
for the Acquiring
Corporation’s stock. For purposes of this Section 8.2, the Option shall be deemed assumed if,
following the Transfer of Control, the Option confers the right to purchase in accordance with its
terms and conditions, for each share of Stock subject to the Option immediately prior to the
Transfer of Control, the consideration (whether stock, cash or other securities or property) to which a holder of a share of Stock on the effective date of the Transfer of Control
was entitled. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to
the Transfer of Control and any consideration received pursuant to the Transfer of Control in
respect of such shares shall continue to be subject to all applicable provisions of this Option
Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing, if the
corporation the stock of which is subject to the Option immediately prior to an Ownership Change
Event described in Section 8.1(a)(i) constituting a Transfer of Control is the surviving or
continuing corporation and immediately after such Ownership Change Event less than fifty percent
(50%) of the total combined voting power of its voting stock is held by another corporation or by
other corporations that are members of an affiliated group within the meaning of Section 1504(a) of
the Code without regard to the provisions of Section 1504(b) of the Code, the Option shall not
terminate unless the Board otherwise provides in its sole discretion.

     9. Adjustments for Changes in Capital Structure. In the event of any stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification, or similar change in
the capital structure of the Company, appropriate adjustments shall be made in the number, Exercise
Price and class of shares of stock subject to the Option. If a majority of the shares which are of
the same class as the shares that are subject to the Option are exchanged for, converted into, or
otherwise become (whether or not pursuant to an Ownership Change Event) shares of another
corporation (the “New Shares”), the Board may unilaterally amend the Option to provide that the
Option is exercisable for New Shares. In the event of any such amendment, the Number of Option
Shares and the Exercise Price shall be adjusted in a fair and equitable manner,

 

 

as determined by
the Board, in its sole discretion. Notwithstanding the foregoing, any fractional share resulting
from an adjustment pursuant to this Section 9 shall be rounded up or down to the nearest whole
number, as determined by the Board, and in no event may the Exercise Price be decreased to an
amount less than the par value, if any, of the stock subject to the Option. The adjustments
determined by the Board pursuant to this Section 9 shall be final, binding and conclusive.

     10. Rights as a Stockholder Employee or Consultant. The Optionee shall have no rights as
a stockholder in respect of any shares covered by the Option until the date of the issuance of a
certificate for the shares for which the Option has been exercised (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which the record date is
prior to the date such certificate is issued, except as provided in Section 9. If the Optionee is
an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and the Optionee, the
Optionee’s employment is “at will” and is for no specified term. Nothing in this Option Agreement
shall confer upon the Optionee, whether an Employee or Consultant, any right to continue in the
Service of a Participating Company or interfere in any way with any right of the Participating
Company Group to terminate the Optionee’s Service as an Employee or Consultant, as the case may be,
at any time.

     11. Unvested Share Repurchase Option.

          11.1 Grant of Unvested Share Repurchase Option. In the event the Optionee’s Service with the
Participating Company Group is terminated for any reason or no reason, with or without cause, or if
the Optionee, the Optionee’s legal representative, or other holder of shares acquired upon exercise
of the Option attempts to sell, exchange, transfer, pledge, or otherwise dispose of (other than
pursuant to an Ownership Change Event) any shares acquired upon exercise of the Option which exceed
the Vested Shares as defined in Section 11.2 below (the “Unvested Shares”), the Company shall have
the right to repurchase the Unvested Shares under the terms and subject to the conditions set forth
in this Section 11 (the “Unvested Share Repurchase Option”).

          11.2
Vested Shares and Unvested Shares Defined. The “Vested Shares” shall mean, on any given date,
a number of shares of Stock equal to the Number of Option Shares multiplied by the Vested Ratio
determined as of such date and rounded down to the nearest whole share. On such given date, the
“Unvested Shares” shall mean the number of shares of Stock acquired upon exercise of the Option
which exceed the Vested Shares determined as of such date.

          11.3 Exercise of Unvested Share Repurchase Option. The Company may exercise the Unvested Share
Repurchase Option by written notice to the Optionee within sixty (60) days after (a) termination of
the Optionee’s Service (or exercise of the Option, if later) or (b) the Company has received notice
of the attempted disposition of Unvested Shares. If the Company fails to give notice within such
sixty (60) day period,

 

 

the Unvested Share Repurchase Option shall terminate unless the Company and the Optionee have
extended the time for the exercise of the Unvested Share Repurchase Option. The Unvested Share
Repurchase Option must be exercised, if at all, for all of the Unvested Shares, except as the
Company and the Optionee otherwise agree.

          11.4 Payment for Shares and Return of Shares to Company. The purchase price per share being
repurchased by the Company shall be an amount equal to the Optionee’s original cost per share, as
adjusted pursuant to Section 9 (the “Repurchase Price”). The Company shall pay the aggregate
Repurchase Price to the Optionee in cash within thirty (30) days after the date of the written
notice to the Optionee of the Company’s exercise of the Unvested Share Repurchase Option. For
purposes of the foregoing, cancellation of any indebtedness of the Optionee to any Participating
Company shall be treated as payment to the Optionee in cash to the extent of the unpaid principal
and any accrued interest canceled. The shares being repurchased shall be delivered to the Company
by the Optionee at the same time as the delivery of the Repurchase Price to the Optionee.

          11.5 Assignment of Unvested Share Repurchase Option. The Company shall have the right to assign the
Unvested Share Repurchase Option at any time, whether or not such option is then exercisable, to
one or more persons as may be selected by the Company.

          11.6 Ownership Change Event. Upon the occurrence of an Ownership Change Event, any and all new,
substituted or additional securities or other property to which the Optionee is entitled by reason
of the Optionee’s ownership of Unvested Shares shall be immediately subject to the Unvested Share
Repurchase Option and included in the terms “Stock” and “Unvested Shares” for all purposes of the
Unvested Share Repurchase Option with the same force and effect as the Unvested Shares immediately
prior to the Ownership Change Event. While the aggregate Repurchase Price shall remain the same
after such Ownership Change Event, the Repurchase Price per Unvested Share upon exercise of the
Unvested Share Repurchase Option following such Ownership Change Event shall be adjusted as
appropriate. For purposes of determining the Vested Ratio following an Ownership Change Event,
credited Service shall include all Service with any corporation which is a Participating Company at
the time the Service is rendered, whether or not such corporation is a Participating Company both
before and after the Ownership Change Event.

 

 

     12. Right of First Refusal.

          12.1 Grant of Right of First Refusal. Except as provided in Section 12.7 below, in the event the
Optionee, the Optionee’s legal representative, or other holder of shares acquired upon exercise of
the Option proposes to sell, exchange, transfer, pledge, or otherwise dispose of any Vested Shares
(the “Transfer Shares”) to any person or entity, including, without limitation, any stockholder of
the Participating Company Group, the Company shall have the right to repurchase the Transfer Shares
under the terms and subject to the conditions set forth in this Section 12 (the “Right of First
Refusal”).

          12.2 Notice of Proposed Transfer. Prior to any proposed transfer of the Transfer Shares, the
Optionee shall deliver written notice (the “Transfer Notice”) to the Company describing fully the
proposed transfer, including the number of Transfer Shares, the name and address of the proposed
transferee (the “Proposed Transferee”) and, if the transfer is voluntary, the proposed transfer
price, and containing such information necessary to show the bona fide nature of the proposed
transfer. In the event of a bona fide gift or involuntary transfer, the proposed transfer price
shall be deemed to be the Fair Market Value of the Transfer Shares, as determined by the Board in
good faith. If the Optionee proposes to transfer any Transfer Shares to more than one Proposed
Transferee, the Optionee shall provide a separate Transfer Notice for the proposed transfer to each
Proposed Transferee. The Transfer Notice shall be signed by both the Optionee and the Proposed
Transferee and must constitute a binding commitment of the Optionee and the Proposed Transferee for
the transfer of the Transfer Shares to the Proposed Transferee subject only to the Right of First
Refusal.

          12.3 Bona Fide Transfer. If the Company determines that the information provided by the Optionee in
the Transfer Notice is insufficient to establish the bona fide nature of a proposed voluntary
transfer, the Company shall give the Optionee written notice of the Optionee’s failure to comply
with the procedure described in this Section 12, and the Optionee shall have no right to transfer
the Transfer Shares without first complying with the procedure described in this Section 12. The
Optionee shall not be permitted to transfer the Transfer Shares if the proposed transfer is not
bona fide.

          12.4 Exercise of Right of First Refusal. If the Company determines the proposed transfer to be bona
fide, the Company shall have the right to purchase all, but not less than all, of the Transfer
Shares (except as the Company and the Optionee otherwise agree) at the purchase price and on the
terms set forth in the Transfer Notice by delivery to the Optionee of a notice of exercise of the
Right of First Refusal within thirty (30) days after the date the Transfer Notice is delivered to
the Company. The Company’s exercise or failure to exercise the Right of First Refusal in respect of
any proposed transfer described in a Transfer Notice shall not affect the Company’s right to
exercise the Right of First Refusal in respect of any proposed transfer described in any other
Transfer Notice, whether or not such other Transfer Notice is issued by the Optionee or issued by a
person other than the Optionee in respect of a proposed transfer to the same

 

 

Proposed Transferee. If the Company exercises the Right of First Refusal, the Company and the Optionee shall thereupon
consummate the sale of the Transfer Shares to the Company on the terms set forth in the Transfer
Notice within thirty (30) days after the date the Transfer Notice is delivered to the Company
(unless a longer period is offered by the Proposed Transferee); provided, however, that in the
event the Transfer Notice provides for the payment for the Transfer Shares other than in cash, the
Company shall have the option of paying for the Transfer Shares by the present value cash
equivalent of the consideration described in the Transfer Notice as reasonably determined by the
Company. For purposes of the foregoing, cancellation of any indebtedness of the Optionee to any
Participating Company shall be treated as payment to the Optionee in cash to the extent of the
unpaid principal and any accrued interest canceled.

          12.5 Failure to Exercise Right of First Refusal. If the Company fails to exercise the Right of
First Refusal in full (or to such lesser extent at the Company and the Optionee otherwise agree)
within the period specified in Section 12.4 above, the Optionee may conclude a transfer to the
Proposed Transferee of the Transfer Shares on the terms and conditions described in the Transfer
Notice, provided such transfer occurs not later than ninety (90) days following delivery to the
Company of the Transfer Notice. The Company shall have the right to demand further assurances from
the Optionee and the Proposed Transferee (in a form satisfactory to the Company) that the transfer
of the Transfer Shares was actually carried out on the terms and conditions described in the
Transfer Notice. No Transfer Shares shall be transferred on the books of the Company until the
Company has received such assurances, if so demanded, and has approved the proposed transfer as
bona fide. Any proposed transfer on terms and conditions different from those described in the
Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be
subject to the Right of First Refusal and shall require compliance by the Optionee with the
procedure described in this Section 12.

          12.6 Transferees of Transfer Shares. All transferees of the Transfer Shares or any interest
therein, other than the Company, shall be required as a condition of such transfer to agree in
writing (in a form satisfactory to the Company) that such transferee shall receive and hold such
Transfer Shares or interest therein subject to all of the terms and conditions of this Option
Agreement, including this Section 12 providing for the Right of First Refusal in respect of any
subsequent transfer. Any sale or transfer of any shares acquired upon exercise of the Option shall
be void unless the provisions of this Section 12 are met.

          12.7 Transfers Not Subject to Right of First Refusal. The Right of First Refusal shall not apply to
any transfer or exchange of the shares acquired upon exercise of the Option if such transfer or
exchange is in connection with an Ownership Change Event. If the consideration received pursuant to
such transfer or exchange consists of stock of a Participating Company, such consideration shall
remain subject to the Right of First Refusal unless the provisions of Section 12.9 below result in
a termination of the Right of First Refusal.

 

 

          12.8 Assignment of Right of First Refusal. The Company shall have the right to assign the Right of
First Refusal at any time, whether or not there has been an attempted transfer, to one or more
persons as may be selected by the Company.

          12.9 Early Termination of Right of First Refusal. The other provisions of this Option Agreement
notwithstanding, the Right of First Refusal shall terminate and be of no further force and effect
upon (a) the occurrence of a Transfer of Control, unless the Acquiring Corporation assumes the
Company’s rights and obligations under the Option or substitutes a substantially equivalent option
for the Acquiring Corporation’s stock for the Option, or (b) the existence of a public market for
the class of shares subject to the Right of First Refusal. A “public market” shall be deemed to
exist if (i) such stock is listed on a national securities exchange (as that term is used in the
Exchange Act) or (ii) such stock is traded on the over-the-counter market and prices therefor are
published daily on business days in a recognized financial journal.

     13. Escrow.

          13.1 Establishment of Escrow. To ensure that shares subject to the Unvested Share Repurchase Option
or the Right of First Refusal or securing any promissory note will be available for repurchase, the
Company may require the Optionee to deposit the certificate evidencing the shares which the
Optionee purchases upon exercise of the Option with an escrow agent designated by the Company under
the terms and conditions of escrow and security agreements approved by the Company. If the Company
does not require such deposit as a condition of exercise of the Option, the Company reserves the
right at any time to require the Optionee to so deposit the certificate in escrow. Upon the
occurrence of an Ownership Change Event or a change, as described in Section 9, in the character or
amount of any of the outstanding stock of the corporation the stock of which is subject to the
provisions of this Option Agreement, any and all new substituted or additional securities or other
property to which the Optionee is entitled by reason of the Optionee’s ownership of shares of Stock
acquired upon exercise of the Option that remain, following such Ownership Change Event or change
described in Section 9, subject to the Unvested Share Repurchase Option, the Right of First Refusal
or any security interest held by the Company shall be immediately subject to the escrow to the same
extent as such shares of Stock immediately before such event. The Company shall bear the expenses
of the escrow.

          13.2 Delivery of Shares to Optionee. As soon as practicable after the expiration of the Unvested
Share Repurchase Option and the Right of First Refusal and after full repayment of any promissory
note secured by the shares or other property in escrow but not more frequently than twice each
calendar year, the escrow agent shall deliver to the Optionee the shares and any other property no
longer subject to such restrictions and no longer securing any promissory note.

          13.3 Notices and Payments. In the event the shares and any other property held in escrow are
subject to the Company’s exercise of the Unvested Share Repurchase Option or the Right of First
Refusal, the notices required to be given to the

 

 

Optionee shall be given to the escrow agent, and
any payment required to be given to the Optionee shall be given to the escrow agent. Within thirty
(30) days after payment by the Company, the escrow agent shall deliver the shares and any other
property which the Company has purchased to the Company and shall deliver the payment received from
the Company to the Optionee.

     14. Stock Distributions Subject to Option Agreement. If, from time to time, there is any
stock dividend, stock split or other change, as described in Section 9, in the character or amount
of any of the outstanding stock of the corporation the stock of which is subject to the provisions
of this Option Agreement, them in such event any and all new, substituted or additional securities
to which the Optionee is entitled by reason of the Optionee’s ownership of the shares acquired upon
exercise of the Option shall be immediately subject to the Unvested Share Repurchase Option, the
Right of First Refusal, and any security interest held by the Company with the same force and
effect as the shares subject to the Unvested Share Repurchase Option, the Right of First Refusal,
and such security interest immediately before such event.

     15. Notice of Sales Upon Disqualifying Disposition. The Optionee shall dispose of the
shares acquired pursuant to the Option only in accordance with the provisions of this Option
Agreement. In addition, the Optionee shall promptly notify the President of the Company if the
Optionee disposes of any of the shares acquired pursuant to the Option within one (1) year after
the date the Optionee exercises all or part of the Option or within two (2) years after the Date of
Option Grant and shall provide the Company with a description of the terms and circumstances of
such disposition. Until such time as the Optionee disposes of such shares in a manner consistent
with the provisions of this Option Agreement, unless otherwise expressly authorized by the Company,
the Optionee shall hold all shares acquired pursuant to the Option in the Optionee’s name (and not
in the name of any nominee) for the one-year period immediately after the exercise of the Option
and the two-year period immediately after Date of Option Grant. At any time during the one-year or
two-year periods set forth above, the Company may place a legend on any certificate representing
shares acquired pursuant to the Option requesting the transfer agent for the Company’s stock to
notify the Company of any such transfers. The obligation of the Optionee to notify the Company of
any such transfer shall continue notwithstanding that a legend has been placed on the certificate
pursuant to the preceding sentence.

     16. Legends. The Company may at any time place legends referencing the Unvested Share
Repurchase Option, the Right of First Refusal and any applicable federal, state or foreign
securities law restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. The Optionee shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares acquired pursuant to the Option
in the possession of the Optionee in order to carry out the provisions of this Section. Unless
otherwise specified by the Company, legends placed on such certificates may include, but shall not
be limited to, the following:

 

 

          16.1 “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.”

          16.2 “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN UNVESTED SHARE REPURCHASE OPTION
IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND
THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THIS CORPORATION.”

          16.3 “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN
FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE
REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THIS CORPORATION.”

          16.4 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED
HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (“ISO”). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO
ISOs, THE SHARES SHOULD NOT BE TRANSFERRED PRIOR TO ___. SHOULD THE REGISTERED HOLDER ELECT TO
TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR
THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES
PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF
ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.”

     17. Public Offering. The Optionee hereby agrees that in the event of any underwritten public
offering of stock, including an initial public offering of stock, made by the Company pursuant to
an effective registration statement filed under the Securities Act, the Optionee shall not offer,
sell, contract to sell, pledge, hypothecate, grant any option to purchase or make any short sale
of, or otherwise dispose of any shares of stock of the Company or any rights to acquire stock of
the Company for such period of time

 

 

from and after the effective date of such registration
statement as may be established by the underwriter for such public offering; provided, however,
that such period of time shall not exceed one hundred eighty (180) days from the effective date of
the registration statement to be filed in connection with such public offering. The foregoing
limitation shall not apply to shares registered in the public offering under the Securities Act.
The Optionee shall be subject to this Section provided and only if the officers and directors of
the Company are also subject to similar arrangements.

     18. Restrictions on Transfer of Shares. No shares acquired upon exercise of the Option may be sold,
exchanged, transferred (including, without limitation, any transfer to a nominee or agent of the
Optionee), assigned, pledged, hypothecated or otherwise disposed of, including by operation of law,
in any manner which violates any of the provisions of this Option Agreement and, except pursuant to
an Ownership Change, until the date on which such shares become Vested Shares, and any such
attempted disposition shall be void. The Company shall not be required (a) to transfer on its books
any shares which will have been transferred in violation of any of the provisions set forth in this
Option Agreement or (b) to treat as owner of such shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such shares will have been so transferred.

     19. Binding Effect. Subject to the restrictions on transfer set forth herein, this Option Agreement
shall inure to the benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.

     20. Termination or Amendment. The Board may terminate or amend the Plan or the Option at any time;
provided, however, that except as provided in Section 8.2 in connection with a Transfer of Control,
no such termination or amendment may adversely affect the Option or any unexercised portion hereof
without the consent of the Optionee unless such termination or amendment is necessary to comply
with any applicable law or government regulation or is required to enable the Option to qualify as
an Incentive Stock Option. No amendment or addition to this Option Agreement shall be effective
unless in writing.

     21. Notices. Any notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given (except to the extent that this Option Agreement provides for
effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail, with postage and fees prepaid,
addressed to the other party at the address shown below that party’s signature or at such other
address as such party may designate in writing from time to time to the other party.

     22. Integrated Agreement. This Option Agreement and the Plan constitute the entire understanding and
agreement of the Optionee and the Participating Company Group in respect of the subject matter
contained herein or therein, and there are no agreements understandings, restrictions,
representations, or warranties among the Optionee and the Participating Company Group in respect of
such subject matter other

 

 

than those as set forth or provided for herein or therein. To the extent
contemplated herein or therein, the provisions of this Option Agreement shall survive any exercise
of the Option and shall remain in full force and effect.

     23. Applicable Law. This Option Agreement shall be governed by the laws of the State of Virginia as
such laws are applied to agreements between Virginia residents entered into and to be performed
entirely within the State of Virginia.

 

 

	 	 	 	 	 	 	 
	 	 	ERI CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	Address : 1908 Doolittle Drive	 	 
	 

	 	                   San
	 	Leandro, CA 94577	 	 

     The Optionee represents that the Optionee is familiar with the terms and provisions of this Option
Agreement, including the Unvested Share Repurchase Option set forth in Section 11 and the Right of
First Refusal set forth in Section 12 and hereby accepts the Option subject to all of the terms and
provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under this Option Agreement.
The undersigned acknowledges receipt of a copy of the Plan.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	OPTIONEE
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Optionee Address:

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