Document:

Exhibit
      10.13

    

    
      FINAL    

    

    2007
      Senior Management Bonus Plan

    

    Summary

    

    The
      2007
      Senior Management Bonus Plan (“Bonus Plan”) is designed to encourage and reward
      senior management (as defined below) for (a) attaining Company-wide financial
      goals, (b) improving the financial and operational health of the Company, and
      (c) meeting or exceeding individually defined goals and objectives for each
      executive and eligible manager. The Company’s Compensation Committee administers
      this program. Under this program, the Company will establish a “bonus pool” in
      an amount that will vary based upon the Company achieving specific pre-defined
      financial criteria. If the Company achieves 100% of these goals, the bonus
      pool
      will equal the total annual base salaries time the individual bonus percentage
      (see below) of all eligible participants. The bonus pool can increase or
      decrease based upon greater than or less than 100% of these criteria being
      satisfied. The total amount of the pool, and the amount to be distributed to
      each participant, will be determined by the Compensation Committee after public
      release of the Company’s 2007 year-end audited financial statements. The
      Compensation Committee is not obligated to distribute the entire accrued bonus
      pool, although it expects to do so.

    

    The
      payout of any bonuses funded under the Bonus Plan to any individual recipient
      is
      based upon two components - the measurable Individual and Departmental
      Objectives, addressing item (c) above and
      a
      discretionary component based upon an individual’s extraordinary efforts which
      contribute meaningfully to the Company’s overall success and contribute to the
      success of his/her fellow senior managers in achieving their respective
      individual and departmental objectives. 

    

    Participants

    

    The
      following Ironclad Performance Wear employees are participants in the 2007
      Senior Management Bonus Plan. Participants must have been employed on a
      full-time basis before October 1, 2007 to participate in the Bonus Plan. In
      addition to the award objectives outlined below, an employee’s 2007 tenure may
      be used to determine the amount of participation in the Bonus Plan (i.e.
      proration based upon tenure). Additional participants may be added throughout
      the year by the Compensation Committee of the Company’s Board of
      Directors.

    

    
      	
              Name

            	 	
              Title

            	 	
              Target
                Bonus Percentage

            
	
              Ed
                Jaeger

            	 	
              CEO

            	 	
              35%

            
	
              Kent
                Pachl

            	 	
              VP
                of Sales

            	 	
              30%

            
	
              Rhonda
                Hoffarth

            	 	
              VP
                of Operations

            	 	
              25%

            
	
              ______________

            	 	
              CFO

            	 	
              25%

            
	
              Tom
                Kreig

            	 	
              Controller

            	 	
              20%

            
	
              Eric
                Jaeger

            	 	
              VP
                of Research & Development

            	 	
              20%

            
	
              Annie
                Evans

            	 	
              Director
                of Supply Chain

            	 	
              20%

            

    

     

    CONFIDENTIAL

    to
      Ironclad Performance Wear Corporation and the Participants Listed

    
      
        
        

      

      
        Page
          1 of
          16

        
          

        

      

      
        
        

      

    

    

    Bonus
      payment will be made only to recipients who are active employees of the Company
      on the date of Bonus Plan distribution.

    

    Corporate
      Financial Objectives

    

    In
      order
      for any of the Bonus Pool to be funded, the Company must achieve at least 95%
      of
      the budgeted Net Revenues and Net Income (Loss) Before Taxes for 2007 [i.e.
      $15.531MM and ($1.909MM), respectively], subtracting any benefit to earnings
      from prior periods, e.g. prior period reserves for expenses that are reversed
      (“Earnings Targets”). Attainment of Revenues and Earnings Targets are the
      responsibility of all participants in the Bonus Plan. They require that the
      Company’s management work as a team toward common goals. 

    

    Individual
      and Departmental Objectives

    

    Each
      participant in the Bonus Plan will be assigned a set of Individual/ Departmental
      objectives. These objectives will include both measurable and quantifiable
      objectives and “soft” objectives. These objectives are determined based upon
      input from the participant, his/her manager and the CEO, and described in
Annex
      A
      hereto.
      The objectives in Annex
      A
      for each
      participant must be formally approved by the Compensation Committee and the
      Board of Directors. 

    

    Evaluations
      and Payout of Bonus Award

    

    Within
      45
      days of the end of the fiscal year, each participant will be evaluated by the
      CEO (or, in the case of the CEO, by the Chairman of the Compensation Committee
      and/or Chairman of the Board) to determine the participant’s performance
      relative to their Individual/Departmental Objectives. In addition, each
      participant will be evaluated on their relative contribution to the success
      of
      the Company as a whole.

    

    Following
      the public release of the Company’s 2007 year-end audited financial statements,
      the Compensation Committee will confirm the level of funding for the Bonus
      Plan
      based on its evaluation of the Company’s performance relative to the Revenues
      and Earnings Targets. Within 2 weeks of such confirmation, the Compensation
      Committee will determine the individual awards, based upon the recommendations
      of the CEO, and confirm such awards in writing to the participants, which will
      be paid out promptly thereafter. Nothing herein guarantees any participant
      any
      level of payout even if the Bonus plan is funded at the maximum amount possible.
      The Compensation Committee reserves the right to exercise its discretion to
      allocate the Bonus Pool, in whole and in part, to those executives and in those
      proportions that it determines is in the best interests of the Company.

     

    CONFIDENTIAL

    to
      Ironclad Performance Wear Corporation and the Participants Listed

    
      
        
        

      

      
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          2 of
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    Bonus
      Pool Funding

    

    The
      Bonus
      Pool will be funded using the following scale:

    

    
      	
              Percent Attainment of
                

              Revenue/Net Income

              Targets
                

            	 	
              Bonus Pool

              Funding Percentage

            
	
              <95%

            	
               

            	
              Zero

            
	
              95
                - 98%

            	
               

            	
              50%

            
	
              98
                - 99%

            	
               

            	
              75%

            
	
              100
                - 103%

            	
               

            	
              100%

            
	
              104
                - 107% 

            	
               

            	
              110%

            
	
              108
                - 111%

            	
               

            	
              115%

            
	
              112
                - 115%

            	
               

            	
              120%

            
	
              116
                - 120%

            	
               

            	
              125%

            
	
              121
                - 125%

            	
               

            	
              130%

            
	
              126
                - 130%

            	
               

            	
              135%

            
	
              >131%

            	
               

            	
              150%

            

    

    

    (Example:
      If the Company attains 102% of the Earnings Targets, the entire Bonus Pool
      (as
      defined above) for all eligible participants would be available for allocation
      to the participants. If the Company attains 140% of the Earnings Targets, the
      entire Bonus Pool plus an additional 50% of the Bonus Pool would be available
      for allocation to the participants.)

    

    Individual
      bonuses will be calculated and awarded based upon two methodologies. A
“non-discretionary” portion accounting for 60% of the participant’s Target Bonus
      Percentage will be awarded, in whole or part, based upon the level of attainment
      of the Individual/Departmental Objectives previously set for each participant.
      The remaining 40% of the participant’s Target Bonus Percentage, along with any
      unawarded part of the of the “non-discretionary” portion (i.e. funds not awarded
      to the entire population of participants due to missed Individual/Departmental
      Objectives) will be put into a pool to create a “discretionary portion” to
      reward individuals for their contribution to the Company’s overall success and
      for their significant contributions in support of their fellow senior managers
      in achieving their respective Individual/Departmental Objectives. 

     

    
      CONFIDENTIAL

      to
        Ironclad Performance Wear Corporation and the Participants Listed

      
        
          
          

        

        
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            3 of
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    Exhibit
      A

    

    Individual
      and Departmental Objectives

    

    

    (See
      following pages)

     

    
      CONFIDENTIAL

      to
        Ironclad Performance Wear Corporation and the Participants Listed

      
        
          
          

        

        
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            4 of
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    Individual
      and Departmental Objectives

    

    
      	
              Participant:

            	
              Kent
                Pachl

            
	
              Title:

            	
              VP
                of Sales

            

    

    

    Measurable
      and Quantifiable Objectives

    Measurable
      and quantifiable objectives are those which can be reduced to a level of
      statistical measurement based upon the success or failure to meet a certain
      objective target.

    

    
      	 	
              1)

            	
              Objective:
                [**] 

            

    

    
      	 	
              a.

            	
              Description:
                [**] for
                all Ironclad products.

            

    

    
      	 	
              b.

            	
              Method
                of calculating: Based
                upon public financial
                reporting

            

    

    
      	 	
              c.

            	
              Weight*:
                70%

            

    

    

    
      	 	
              2)

            	
              Objective:
                [**]

            

    

    
      	 	
              a.

            	
              Description:
                Expand
                national apparel distribution to at least
                [**].

            

    

    
      	 	
              b.

            	
              Method
                of calculating: Shipped
                product or a firm commitment to ship product by the end of
                [**]

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

    

    
      	 	
              3)

            	
              Objective:
                [**]

            

    

    
      	 	
              a.

            	
              Description:
                Expand
                Sales management to [**]

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Hired or contracted Sales management in [**].

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

    

    “Soft”
      (Non-Quantifiable) Objectives:

    “Soft”
      objectives are those which are difficult to quantify using statistical
      measurement. They may include such things as “successfully manage xyz task or
      project” or “investigate Ironclad’s interest in xyz technology”.

    

    1) Objective:
      EXECUTE
      NATIONAL CONSUMER PROMOTION

    
      	 	
              a.

            	
              Description:
                Execute
                a national consumer promotion during the second half of
                2007.

            

    

    
      	 	
              b.

            	
              Method
                of determining success: Formally
                launch the full national
                promotion.

            

    

    
      	 	
              c.

            	
              Weight*:
                5%

            

    

    

    
      	 	
              2)

            	
              Objective:
                IMPLEMENT
                A PERFORMANCE BASED COMPENSATION
                PLAN

            

    

    
      	 	
              a.

            	
              Description:
                Implement
                a performance-based compensation plan for all Sales team
                members.

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Approval of the compensation plan by the CEO before
                12/31/07.

            

    

    
      	 	
              c.

            	
              Weight*:
                5%

            

    

    
       

      
        

      

      * Ranked
        on
        a scale of 1 to 100 in comparison to the other Objectives listed. The Total
        Weight for all Objectives must equal 100.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    Individual
      and Departmental Objectives

    

    
      	
              Participant:

            	
              [OPEN]

            
	
              Title:

            	
              CFO

            

    

    

    Measurable
      and Quantifiable Objectives

    Measurable
      and quantifiable objectives are those which can be reduced to a level of
      statistical measurement based upon the success or failure to meet a certain
      objective target.

    

    
      	 	
              1)

            	
              Objective:
                SELL-SIDE
                COVERAGE

            

    

    
      	 	
              d.

            	
              Description:
                Obtain
                sell-side coverage by at least one (1) research analyst with a NASDAQ
                listed firm.

            

    

    
      	 	
              e.

            	
              Method
                of calculating: Publication
                of at least one research report by
                12/31/07.

            

    

    
      	 	
              f.

            	
              Weight*:
                40%

            

    

    

    
      	 	
              2)

            	
              Objective:
                EDI
                IMPLEMENTATION

            

    

    
      	 	
              g.

            	
              Description:
                Analyze,
                recommend and implement an updated EDI
                system.

            

    

    
      	 	
              h.

            	
              Method
                of calculating: EDI
                software purchased and installed by
                12/31/07.

            

    

    
      	 	
              i.

            	
              Weight*:
                20%

            

    

    

    
      	 	
              3)

            	
              Objective:
                DEVELOPMENT
                OF MANAGEMENT ANALYTICS AND REPORTING
                TOOLS

            

    

    
      	 	
              a.

            	
              Description:
                Specify,
                select, purchase, install and implement a system which will improve
                the
                management analytics and report functions for Sales, Operations and
                Accounting.

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Implementation of the system by
                12/31/07.

            

    

    
      	 	
              c.

            	
              Weight*:
                25%

            

    

    

    “Soft”
      (Non-Quantifiable) Objectives:

    “Soft”
      objectives are those which are difficult to quantify using statistical
      measurement. They may include such things as “successfully manage xyz task or
      project” or “investigate Ironclad’s interest in xyz technology”.

    

    1) Objective:
      INVESTOR
      & NON-DEAL COMPANY PRESENTATIONS

    
      	 	
              a.

            	
              Description:
                Arrange
                for company participation in at least three (3) investor conference
                and
                three (3) non-deal road-show presentations. This includes updating
                presentation materials and follow-up with potential
                investors.

            

    

    
      	 	
              b.

            	
              Method
                of determining success: Company
                participation as outlined
                above.

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

    

    
      	 	
              2)

            	
              Objective:
                OUTSOURCED
                HUMAN RESOURCES FUNCTION

            

    

    
      	 	
              a.

            	
              Description:
                Evaluate
                the effectiveness of outsourcing the company’s Human Resources function.
                If appropriate, select a third-party Human Resources outsource firm
                and
                implement the change.

            

    

     

    
      

    

    
      * Ranked
        on
        a scale of 1 to 100 in comparison to the other Objectives listed. The Total
        Weight for all Objectives must equal 100.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
       

      
        	 	
                b.

              	
                Method
                  of determining success:
                  Completion of the outsourcing analysis and, if appropriate, implementation
                  of the outsourced Human Resources function by the end of Q3
                  2007.

              

      

      
        	 	
                c.

              	
                Weight*:
                  5%

              

      

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    
 

    Individual
      and Departmental Objectives

    

    
      	
              Participant:

            	
              Rhonda
                Hoffarth

            
	
              Title:

            	
              VP
                of Operations

            

    

    

    Measurable
      and Quantifiable Objectives

    Measurable
      and quantifiable objectives are those which can be reduced to a level of
      statistical measurement based upon the success or failure to meet a certain
      objective target.

    

    
      	 	
              1)

            	
              Objective:
                [**]

            

    

    
      	
            	a.	
              Description:
                [**]

            

    

    
      	 	
              b.

            	
              Method
                of calculating: As
                calculated by Finance using customary Ironclad
                methods.

            

    

    
      	 	
              c.

            	
              Weight*:
                30%

            

    

    

    
      	 	
              2)

            	
              Objective:
                [**]

            

    

    
      	 	
              a.

            	
              Description:
                [**]

            

    

    
      	 	
              b.

            	
              Method
                of calculating: As
                calculated by Finance using customary Ironclad
                methods.

            

    

    
      	 	
              c.

            	
              Weight*:
                20%

            

    

    

    
      	 	
              3)

            	
              Objective:
                [**]

            

    

    
      	 	
              a.

            	
              Description:
                [**]

            

    

    
      	 	
              b.

            	
              Method
                of determining success: [**]

            

    

    
      	 	
              c.

            	
              Weight*:
                30%

            

    

    

    “Soft”
      (Non-Quantifiable) Objectives:

    “Soft”
      objectives are those which are difficult to quantify using statistical
      measurement. They may include such things as “successfully manage xyz task or
      project” or “investigate Ironclad’s interest in xyz technology”.

    

    1) Objective:
      INSTITUTE
      A NEW QUALITY CONTROL PROGRAM

    
      	 	
              a.

            	
              Description:
                Design
                and implement a new Quality Control program which will increase the
                quality of the products being produced and reduce the defect rate
                of
                products shipped to
                distributors.

            

    

    
      	 	
               

            	 

    

    
      
        

      

      * Ranked
        on
        a scale of 1 to 100 in comparison to the other Objectives listed. The Total
        Weight for all Objectives must equal 100.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
      	
            	b.	
              Method
                of determining success: Measured
                defect rate of returned goods from distributors, comparing 2006 to
                2007
                following implementation of the new Quality Control
                program.

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

    

    
      	 	
              2)

            	
              Objective:
                IMPLEMENT
                A 12 MONTH ROLLING MASTER
                CALENDAR

            

    

    
      	 	
              a.

            	
              Description:
                Produce
                a calendar of product production releases from the
                factories.

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Completed and distributed by October 31,
                2007.

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

     

    
      

    

    
      * Ranked
        on
        a scale of 1 to 100 in comparison to the other Objectives listed. The Total
        Weight for all Objectives must equal 100.

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Individual
      and Departmental Objectives

    

    
      	
              Participant:

            	
              Tom
                Kreig

            
	
              Title:

            	
              Vice
                President - Finance

            

    

    

    Measurable
      and Quantifiable Objectives

    Measurable
      and quantifiable objectives are those which can be reduced to a level of
      statistical measurement based upon the success or failure to meet a certain
      objective target.

    

    
      	 	
              1)

            	
              Objective:
                DEVELOP
                AND DELIVER A BOARD PACKAGE OF KEY METRICS BY END OF
                Q2

            

    

    
      	 	
              a.

            	
              Description:
                Prepare
                a monthly package of key company metrics for distribution to the
                Board by
                the 20th
                of each month.

            

    

    
      	 	
              b.

            	
              Method
                of calculating: Issue
                date of package

            

    

    
      	 	
              c.

            	
              Weight*:
                35%

            

    

    

    
      	 	
              3)

            	
              Objective:
                TRAIN
                STAFF TO ACHIEVE MONTHLY CLOSING OF THE BOOKS WITHIN A 10-15 DAY
                WINDOW BY
                THE END OF Q2

            

    

    
      	 	
              a.

            	
              Description:
                Train accounting department staff to perform month-end closing procedures
                on a timely basis for review before 15th
                calendar day each month.

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Date at which financial statements are
                issued

            

    

    
      	 	
              c.

            	
              Weight*:
                35%

            

    

    

    “Soft”
      (Non-Quantifiable) Objectives:

    “Soft”
      objectives are those which are difficult to quantify using statistical
      measurement. They may include such things as “successfully manage xyz task or
      project” or “investigate Ironclad’s interest in xyz technology”.

    

    1) Objective:
      PARTICIPATE
      IN SELECTION AND IMPLEMENTATION OF ADDITIONAL MANAGEMENT REPORTING TOOLS TO
      ENHANCE COMPANY-WIDE ANALYTICS

    
      	 	
              a.

            	
              Description:
                Select and oversee installation of new reporting software (Vision).
                Oversee development of financial department reporting analytics by
                end of
                Q3

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Production of reports

            

    

    
      	 	
              c.

            	
              Weight*:
                15%

            

    

    

    
      	 	
              2)

            	
              Objective:
                [**]

            

    

    
      	 	
              a.

            	
              Description: [**]

            

    

    
      	 	
              b.

            	
              Method
                of determining success: [**]

            

    

    
      	 	
              c.

            	
              Weight*:
                15%

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Individual
      and Departmental Objectives

    

    
      	
              Participant:

            	
              Eric
                Jaeger

            
	
              Title:

            	
              VP
                of Research &
Development

            

    

    

    Measurable
      and Quantifiable Objectives

    Measurable
      and quantifiable objectives are those which can be reduced to a level of
      statistical measurement based upon the success or failure to meet a certain
      objective target.

    

    
      	 	
              1)

            	
              Objective:
                COMPLETE
                FINAL DESIGNS FOR 2008 COMBINED SPRING/FALL APPAREL
                LINE

            

    

    
      	 	
              a.

            	
              Description:
                Finalize
                the designs for the 2008 combined Spring/Fall apparel lines. Provide
                sales
                samples; finalize fabrics, packaging, sourcing and
                costs.

            

    

    
      	 	
              b.

            	
              Method
                of calculating: Completion
                by July 1, 2007.

            

    

    
      	 	
              c.

            	
              Weight*:
                35%

            

    

    

    2) Objective:
      DESIGN
      NEW SOFT GOODS LINE FOR 2008

    
      	 	
              a.

            	
              Description:
                Design,
                develop, prototype, test and introduce a new soft goods line for
                2008.

            

    

    
      	 	
              b.

            	
              Method
                of determining success: Introduction
                of a new soft goods line by September 1,
                2007.

            

    

    
      	 	
              c.

            	
              Weight*:
                25%

            

    

    

    
      	 	
              3)

            	
              Objective:
                DESIGN
                AND DEVELOP NEW OR IMPROVED GLOVE
                STYLES

            

    

    
      	 	
              a.

            	
              Description:
                Design,
                develop, prototype, test and introduce new and/or improved glove
                styles.
                This may also include lowering costs of existing
                gloves.

            

    

    
      	 	
              b.

            	
              Method
                of determining success: [**]

            

    

    
      	 	
              c.

            	
              Weight*:
                20%

            

    

    

    “Soft”
      (Non-Quantifiable) Objectives:

    “Soft”
      objectives are those which are difficult to quantify using statistical
      measurement. They may include such things as “successfully manage xyz task or
      project” or “investigate Ironclad’s interest in xyz technology”.

    

    
      	 	
              1)

            	
              Objective:
                EXPAND
                IRONCLAD’S INTELLECTUAL
                PROPERTY

            

    

    
      	 	
              a.

            	
              Description:
                Expand
                Ironclad’s Intellectual Property assets and rights with new trademarks and
                patents (both U.S. and
                international).

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                The addition of new U.S. and/or international trademarks and/or
                patents.

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

    

    
      	 	
              2)

            	
              Objective:
                GAIN
                EU CERTIFICTION ON GLOVES

            

    

    
      	 	
              a.

            	
              Description:
                Test
                relevant Ironclad gloves for European gloves
                standards.

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Obtain C.E. mark by years
                end.

            

    

    
      	 	
              c.

            	
              Weight*:
                5%

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
            	3)	
              Objective:
                INTERNATIONAL
                STANDARDS FOR HI-VIZ
                WORKWEAR

            

    

    
      	 	
              a.

            	
              Description:
                Investigate
                Canadian, European and Australian standards for Hi Visibility work
                wear
                

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                Written report and recommendations by years
                end.

            

    

    
      	 	
              c.

            	
              Weight*:
                5%

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Individual
      and Departmental Objectives

    

    
      	
              Participant:

            	
              Annie
                Evans

            
	
              Title:

            	
              Director
                of Supply Chain

            

    

    

    Measurable
      and Quantifiable Objectives

    Measurable
      and quantifiable objectives are those which can be reduced to a level of
      statistical measurement based upon the success or failure to meet a certain
      objective target.

    

    
      	 	
              1)

            	
              Objective:
                [**]

            

    

    
      	 	
              a.

            	
              Description:
                [**]

            

    

    
      	 	
              b.

            	
              Method
                of calculating: Completion
                by July, 2007.

            

    

    
      	 	
              c.

            	
              Weight*:
                20%

            

    

    

    
      	 	
              2)

            	
              Objective:
                [**]

            

    

    
      	 	
              a.

            	
              Description:
                [**]

            

    

    
      	 	
              b.

            	
              Method
                of calculating: Against
                total year 2006 by Ironclad accounting standards, (adjustment to
                be made
                for large bulk sales orders at low margin beyond the scope of this
                department to be considered). 

            

    

    
      	 	
              c.

            	
              Weight*:
                25%

            

    

    

    
      	 	
              3)

            	
              Objective:
                UPDATE
                AND REVISE THE GLOVE VENDOR GUIDE / CREATE APPAREL VENDOR GUIDELINE
                

            

    

    
      	 	
              a.

            	
              Description:
                Update
                and revise the vendor guide to glove suppliers. Establish vendor
                guide for
                apparel supplies, setting standards for FOB and LDP suppliers for
                compliance and
                consistency.

            

    

    
      	 	
              b.

            	
              Method
                of calculating: Glove Vendor Guide, Completion
                by March, 2007; Apparel Vendor Guide, Completion by September
                2007

            

    

    
      	 	
              c.

            	
              Weight*:
                20%

            

    

    

    “Soft”
      (Non-Quantifiable) Objectives:

    “Soft”
      objectives are those which are difficult to quantify using statistical
      measurement. They may include such things as “successfully manage xyz task or
      project” or “investigate Ironclad’s interest in xyz technology”.

    

    
      	 	
              1)

            	
              Objective:
                DEVELOP
                COMPLIANCE AND LOGISTICS PLANS FOR IMPORT AND
                EXPORT

            

    

    
      	 	
              a.

            	
              Description:
                Stay
                current with CBP import regulations and classification and proper
                entry of
                all goods coming into Ironclad FOB or LDP reducing potential exposure
                and
                liability for seized goods and re-delivery penalties. Researching
                cost
                differentials between various means of import and export to save
                on duties
                and related costs (i.e. FTZ vs. Duty Drawback, Warehouse entries,
                etc.).
                Also suggesting means of managing FOB and LDP vendor pricing programs
                to
                maximize the duty cost savings on import and export shipments and
                minimizing consultant and legal fees.

            

    

     

    
      
        
* Ranked
        on
        a scale of 1 to 100 in comparison to the other Objectives listed. The Total
        Weight for all Objectives must equal 100.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              b.

            	
              Method
                of determining success: Development,
                documentation and implementation of compliance and logistics plan
                template
                ongoing and in substance by December,
                2007.

            

    

    
      	 	
              c.

            	
              Weight*:
                25%

            

    

     

    
      	 	
              2)

            	
              Objective:
                DEVELOP
                CONSOLIDATION AND LOGISTICS PLANS FOR INTERNATIONAL
                SALES

            

    

    
      	 	
              a.

            	
              Description:
                Ongoing
                research for developing the most efficient means of servicing
                international sales with knowledge that most of this will be ongoing
                into
                2008 due to limited international growth in 2007. Develop methodologies
                for short and longer term, related to managing multi-country demand,
                ordering, consolidation and direct export as well as using FTZ and/or
                duty
                drawback.

            

    

    
      	 	
              b.

            	
              Method
                of determining success: Development,
                documentation and implementation of matrix template showing various
                options for future international development by October,
                2007.

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Individual
      and Departmental Objectives

    

    
      	
              Participant:

            	
              Ed
                Jaeger

            
	
              Title:

            	
              CEO

            

    

    

    Measurable
      and Quantifiable Objectives

    Measurable
      and quantifiable objectives are those which can be reduced to a level of
      statistical measurement based upon the success or failure to meet a certain
      objective target.

    

    
      	 	
              1)

            	
              Objective:
                ENSURE
                THE SUCCESS OF HIS MANAGEMENT
                TEAM

            

    

    
      	 	
              d.

            	
              Description:
                Facilitate
                and ensure the success of his management team by supporting each
                member in
                their regular responsibilities and in those objectives outlined in
                the
                2007 Bonus program.

            

    

    
      	 	
              e.

            	
              Method
                of calculating: By
                measuring the success of each individual management team member in
                meeting
                their objectives, and taking the cumulative average of their
                success

            

    

    
      	 	
              f.

            	
              Weight*:
                80%

            

    

    

    “Soft”
      (Non-Quantifiable) Objectives:

    “Soft”
      objectives are those which are difficult to quantify using statistical
      measurement. They may include such things as “successfully manage xyz task or
      project” or “investigate Ironclad’s interest in xyz technology”.

    

    
      	
            	1)	
              Objective:
                PROMOTION
                OF THE COMPANY, ITS BRAND AND
                PRODUCTS

            

    

    
      	 	
              a.

            	
              Description:
                As
                CEO, promote the company, its brand and products in non-traditional
                ways
                by participation in business & trade events, media coverage, and
                investor forums.

            

    

    
      	 	
              b.

            	
              Method
                of determining success: Positive
                coverage in the media, increased brand awareness through CEO-outreach,
                and
                increased visibility of the company and
                brand.

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

    

    
      	 	
              2)

            	
              Objective:
                HIRE
                EXCELLENT PEOPLE

            

    

    
      	 	
              a.

            	
              Description:
                Ensure
                that Ironclad as the best employees available, and focus on hiring
                only
                the top talent in the
                market.

            

    

    
      	 	
              b.

            	
              Method
                of determining success:
                High performance for all Ironclad employees, lower employee turn-over
                (voluntary and involuntary) and increased employee
                productivity.

            

    

    
      	 	
              c.

            	
              Weight*:
                10%

            

    

     

    
      
        

      

      * Ranked
        on
        a scale of 1 to 100 in comparison to the other Objectives listed. The Total
        Weight for all Objectives must equal 100.Unassociated Document

    Exhibit
      4.3

     

    NEITHER
      THIS WARRANT NOR THE SECURITIES FOR WHICH IT IS EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
      REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE
      SECURITIES ACT OR AN EXEMPTION FROM THE SECURITIES ACT. ANY SUCH TRANSFER MAY
      ALSO BE SUBJECT TO COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND THE
      LAWS
      OF OTHER APPLICABLE JURISDICTIONS.

     

    

     

    NEPHROS,
      INC.

     

    Warrant
      for the Purchase of Shares of

    Common
      Stock

     

    
      
        	No. L-1  	
                January
                  18,
                  2006

              

      

    

     

    FOR
      VALUE
      RECEIVED, NEPHROS, INC., a Delaware corporation (the “Company”),
      hereby certifies that Marty Steinberg, Esq., as Court-appointed Receiver for
      Lancer Offshore, Inc., or
      his
      registered assigns (the “Holder”)
      is
      entitled to purchase from the Company, subject to the provisions of this Warrant
      (the “Warrant”),
      at
      any time on or after the date hereof (the “Initial
      Exercise Date”),
      and
      prior to 12:01 A.M., New York City time, on January 18, 2009 (the “Termination
      Date”),
      21,308 fully
      paid and non-assessable shares of the Common Stock, $.001 par value, of the
      Company (“Common Stock”), at an exercise price of $1.50 per share of Common
      Stock for an aggregate exercise price of thirty-one thousand nine hundred
      sixty-two dollars ($31,962.00) (the aggregate purchase price payable for the
      Warrant Shares hereunder is hereinafter sometimes referred to as the
“Aggregate
      Exercise Price”).
      The
      number of shares of Common Stock to be received upon exercise of this Warrant
      and the price to be paid for each share of Common Stock are subject to possible
      adjustment from time to time as hereinafter set forth. The shares of Common
      Stock or other securities or property deliverable upon such exercise as adjusted
      from time to time is hereinafter sometimes referred to as the “Warrant
      Shares.”
      The
      exercise price of a share of Common Stock in effect at any time and as adjusted
      from time to time is hereinafter sometimes referred to as the “Per
      Share Exercise Price.”
The
      Per
      Share Exercise Price is subject to adjustment as hereinafter provided; in the
      event of any such adjustment, the number of Warrant Shares shall also be
      adjusted, by dividing the Aggregate Exercise Price by the Per Share Exercise
      Price in effect immediately after such adjustment. The Aggregate Exercise Price
      is not subject to adjustment except to the extent of any partial exercise of
      this Warrant.

     

    1. Exercise
      of Warrant.

     

    (a) This
      Warrant may be exercised in whole or in part, at any time by its holder
      commencing on the Initial Exercise Date and prior to the Termination Date by
      presentation and surrender of this Warrant, together with the duly executed
      subscription form attached at the end hereof, at the address set forth in
      Subsection 8(a) hereof, together with payment, by certified or official bank
      check or wire transfer payable to the order of the Company, of the Aggregate
      Exercise Price or the proportionate part thereof if exercised in
      part.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) If
      this
      Warrant is exercised in part only, the Company shall, upon presentation of
      this
      Warrant upon such exercise, execute and deliver (along with the certificate
      for
      the Warrant Shares purchased) a new Warrant evidencing the rights of the Holder
      hereof to purchase the balance of the Warrant Shares purchasable hereunder
      upon
      the same terms and conditions as herein set forth. Upon proper exercise of
      this
      Warrant, the Company promptly shall deliver certificates for the Warrant Shares
      to the Holder duly legended as authorized by the subscription form. No
      fractional shares or scrip representing fractional shares shall be issued upon
      exercise of this Warrant; provided
      that the
      Company shall pay to the Holder of the Warrant cash in lieu of such fractional
      shares.

     

    (c) The
      certificates representing the Warrant Shares shall bear the following
      legend:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
      APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
      OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
      STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE SECURITIES ACT
      OR
      AN EXEMPTION FROM THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT
      TO
      COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS AND THE LAWS OF OTHER
      APPLICABLE JURISDICTIONS.

     

    2. Reservation
      of Warrant Shares; Fully Paid Shares; Taxes.
      The
      Company hereby represents that it has, and until expiration of this Warrant
      agrees that it shall, reserve for issuance or delivery upon exercise of this
      Warrant, such number of shares of the Common Stock as shall be required for
      issuance and/or delivery upon exercise of this Warrant in full, and agrees
      that
      all Warrant Shares so issued and/or delivered will be validly issued, fully
      paid
      and non-assessable, and further agrees to pay all taxes (other than income
      taxes) and charges that may be imposed upon such issuance and/or delivery.
      The
      Company shall not, however, be required to pay any tax which may be payable
      in
      respect of any transfer involved in the issue or delivery of Common Stock (or
      other securities or assets) in a name other than that in which the Warrants
      so
      exercised were registered, and no such issue or delivery shall be made unless
      and until the person requesting such issue has paid to the Company the amount
      of
      such tax or has established, to the satisfaction of the Company, that such
      tax
      has been paid.

     

    3. Protection
      Against Dilution.

     

    (a) In
      case
      the Company shall hereafter (i) pay a dividend or make a distribution on its
      capital stock in shares of Common Stock, (ii) subdivide its outstanding shares
      of Common Stock into a greater number of shares, (iii) combine its outstanding
      shares of Common Stock into a smaller number of shares or (iv) issue by
      reclassification of its Common Stock any shares of capital stock of the Company
      (each of (i) through (iv) an “Action”), the Per Share Exercise Price shall be
      adjusted to be equal to a fraction, the numerator of which shall be the
      Aggregate Exercise Price and the denominator of which shall be the number of
      shares of Common Stock or other capital stock of the Company that the Holder
      would have held (solely as a result of the exercise of this Warrant and the
      operation of such Action) immediately following such Action if this Warrant
      had
      been exercised immediately prior to such Action. An adjustment made pursuant
      to
      this Subsection 3(b) shall become effective immediately after the record date
      in
      the case of a dividend or distribution and shall become effective immediately
      after the effective date in the case of a subdivision, combination or
      reclassification.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (b) In
      the
      event of any capital reorganization or reclassification not otherwise covered
      in
      this Section 3, or any consolidation or merger to which the Company is a party
      other than a merger or consolidation in which the Company is the continuing
      corporation, or in case of any sale or conveyance to another entity of the
      property of the Company as an entirety or substantially as an entirety, or
      in
      the case of any statutory exchange of securities with another corporation
      (including any exchange effected in connection with a merger of a third
      corporation into the Company), the Holder of this Warrant shall have the right
      thereafter to receive on the exercise of this Warrant the kind and amount of
      securities, cash or other property which the Holder would have owned or have
      been entitled to receive immediately after such reorganization,
      reclassification, consolidation, merger, statutory exchange, sale or conveyance
      had this Warrant been exercised immediately prior to the effective date of
      such
      reorganization, reclassification, consolidation, merger, statutory exchange,
      sale or conveyance and in any such case, if necessary, appropriate adjustment
      shall be made in the application of the provisions set forth in this Section
      3
      with respect to the rights and interests thereafter of the Holder of this
      Warrant to the end that the provisions set forth in this Section 3 shall
      thereafter correspondingly be made applicable, as nearly as may reasonably
      be,
      in relation to any shares of stock or other securities or property thereafter
      deliverable on the exercise of this Warrant. The above provisions of this
      Subsection 3(b) shall similarly apply to successive reorganizations,
      reclassifications, consolidations, mergers, statutory exchanges, sales or
      conveyances. 

     

    (c) Whenever
      the Per Share Exercise Price payable upon exercise of this Warrant is adjusted
      pursuant to this Section 3, the number of shares of Common Stock underlying
      this
      Warrant shall simultaneously be adjusted to equal the number obtained by
      dividing the Aggregate Exercise Price (as the same shall be reduced to the
      extent of any partial exercise of this Warrant) by the adjusted Per Share
      Exercise Price.

     

    (d) If,
      as a
      result of an adjustment made pursuant to this Section 3, the Holder shall become
      entitled to receive, upon exercise of the Warrant, shares of two or more classes
      of capital stock or shares of Common Stock and other capital stock of the
      Company, the Board of Directors (whose determination shall be conclusive) shall
      determine the allocation of the adjusted Per Share Exercise Price between or
      among shares or such classes of capital stock or shares of Common Stock and
      other capital stock.

     

    4. Limited
      Transferability.
      This
      Warrant may not be sold, transferred, assigned or hypothecated by the Holder
      except in compliance with the provisions of the Act and the applicable state
      securities “blue sky” laws, and is so transferable only upon the books of the
      Company which it shall cause to be maintained for such purpose. The Company
      may
      treat the registered Holder of this Warrant as he or it appears on the Company’s
      books at any time as the Holder for all purposes.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    5. Loss,
      etc., of Warrant.
      Upon
      receipt of evidence satisfactory to the Company of the loss, theft, destruction
      or mutilation of this Warrant, and of indemnity reasonably satisfactory to
      the
      Company (which may include a bond), if lost, stolen or destroyed, and upon
      surrender and cancellation of this Warrant, if mutilated, the Company shall
      execute and deliver to the Holder a new Warrant of like date, tenor and
      denomination.

     

    6. Investment
      Intent.

     

    (a) The
      Holder represents, by accepting this Warrant, that it understands that this
      Warrant and any securities obtainable upon exercise of this Warrant have not
      been registered for sale under Federal or state securities laws and are being
      offered and sold to the Holder pursuant to one or more exemptions from the
      registration requirements of such securities laws. The Holder is an “accredited
      investor” within the meaning of Regulation D under the Securities Act of 1933,
      as amended (the “Act”). In the absence of an effective registration of such
      securities or an exemption therefrom, any certificates for such securities
      shall
      bear the legend set forth on the first page hereof. The Holder understands
      that
      it must bear the economic risk of its investment in this Warrant and any
      securities obtainable upon exercise of this Warrant for an indefinite period
      of
      time, as this Warrant and such securities have not been registered under Federal
      or state securities laws and therefore cannot be sold unless subsequently
      registered under such laws, unless as exemption from such registration is
      available.

     

    (b) The
      Holder, by its acceptance of its Warrant, represents to the Company that it
      is
      acquiring this Warrant and will acquire any securities obtainable upon exercise
      of this Warrant for its own account for investment and not with a view to,
      or
      for sale in connection with, any distribution thereof in violation of the Act.
      The Holder agrees that this Warrant and any such securities will not be sold
      or
      otherwise transferred unless (i) a registration statement with respect to such
      transfer is effective under the Act and any applicable state securities laws
      or
      (ii) such sale or transfer is made pursuant to one or more exemptions from
      the
      Act.

     

    7. Status
      of Holder.
      This
      Warrant does not confer upon the Holder any right to vote or to consent to
      or
      receive notice as a stockholder of the Company, as such, in respect of any
      matters whatsoever, or any other rights or liabilities as a stockholder, prior
      to the exercise hereof.

     

    8. Notices.
      No
      notice or other communication under this Warrant shall be effective unless,
      but
      any notice or other communication shall be effective and shall be deemed to
      have
      been given if, the same is in writing and is mailed by first-class mail, postage
      prepaid, addressed to:

     

    (a) the
      Company c/o Audubon Business and Technology Center, Columbia-Presbyterian
      Medical Center, 3960 Broadway, 4th Floor, New York, NY 10032, Attention:
      President, or such other address as the Company has designated by notice to
      the
      Holder; or

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (b) the
      Holder c/o Hunton & Williams, LLP, Mellon Financial Center, 1111 Brickell
      Avenue - Suite 2500, Miami, Florida, 33131, Attention: President, or such other
      address as the Holder has designated by notice to the Company.

     

    9. Headings.
      The
      headings of this Warrant have been inserted as a matter of convenience and
      shall
      not affect the construction hereof.

     

    10. Applicable
      Law.
      This
      Warrant shall be governed by and construed in accordance with the law of the
      State of New York without giving effect to principles of conflicts of law
      thereof.

     

    11. Amendments.  This
      Warrant may be amended only by mutual written agreement of the Company and
      the
      Holder, and the Company may take any action herein prohibited or omit to take
      any action herein required to be performed by it, and any breach of any
      covenant, agreement, warranty or representation may be waived, only if the
      Company has obtained the written consent or waiver of the Holder. 

    

    

    [Signature
      page follows immediately]

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the undersigned, acting for and on behalf of the Company,
      has
      executed this Warrant as of the date first written above.

     

    NEPHROS,
      INC.

     

    By: _________________________

    
      	 	
              Name:

            	 

    

    
      	 	
              Title:

            	 

    

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    SUBSCRIPTION

     

    The
      undersigned, ____________________________, pursuant to the provisions of the
      foregoing Warrant, hereby elects to exercise the within Warrant to the extent
      of
      purchasing _____________________ shares of Common Stock thereunder and hereby
      makes payment of $_______________ by certified or official bank check in payment
      of the exercise price therefor.

     

    
      	Dated:_______________	
              Signature:_____________________________

            

      	 	 

      	 	Address:_______________________________

    

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED _______________________________________ hereby sells, assigns and
      transfers unto _____________________________________ the foregoing Warrant
      and
      all rights evidenced thereby, and does irrevocably constitute and appoint
      _____________________________, attorney, to transfer said Warrant on the books
      of Nephros, Inc.

    
       

      
        	Dated:_______________	
                Signature:_____________________________

              

        	 	 

        	 	Address:_______________________________

      

       

    

    

    

    PARTIAL
      ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED __________________________ hereby assigns and transfers unto
      _________________________ the right to purchase __________ shares of the Common
      Stock, $.001 par value per share, of Nephros, Inc. covered by the foregoing
      Warrant, and a proportionate part of said Warrant and the rights evidenced
      thereby, and does irrevocably constitute and appoint __________________________,
      attorney, to transfer that part of said Warrant on the books of Nephros,
      Inc.

     

    
      
        	Dated:_______________	
                Signature:_____________________________

              

        	 	 

        	 	Address:_______________________________

      

       

       

      
        
           

        

        
          8

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