Document:

Unassociated Document

    PICTON
HOLDING COMPANY, INC.

    

    2006 Stock Incentive
Plan

    

    1.           Purpose.  The
purpose of the 2006 Stock Incentive Plan (the “Plan”) of PICTON HOLDING COMPANY, INC.
(the “Company”) is to
increase shareholder value and to advance the interests of the Company by
furnishing a variety of economic incentives (“Incentives”) designed to
attract, retain and motivate employees, directors, officers and
consultants.  Incentives may consist of opportunities to purchase or
receive shares of Series A Common Stock, $0.001 par value, of the Company
(“Common Stock”), on
terms determined under this Plan.

    

    2.           Administration.

    

    2.1           The
Plan shall be administered by a committee of the Board of Directors of the
Company (the “Committee”).  The
Committee shall consist of not less than two directors of the Company who shall
be appointed from time to time by the board of directors of the
Company.  Each member of the Committee shall be a “non-employee
director” within the meaning of Rule 16b-3 of the Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
“Exchange Act”), and an
“outside director” as defined in Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”).  The
Committee shall have complete authority to determine all provisions of all
Incentives awarded under the Plan (as consistent with the terms of the Plan), to
interpret the Plan, and to make any other determination which it believes
necessary and advisable for the proper administration of the
Plan.  The Committee’s decisions on matters relating to the Plan shall
be final and conclusive on the Company and its participants.  No
member of the Committee will be liable for any action or determination made in
good faith with respect to the Plan or any Incentives granted under the
Plan.  The Committee will also have the authority under the Plan to
amend or modify the terms of any outstanding Incentives in any manner; provided,
however, that the amended or modified terms are permitted by the Plan as then in
effect and that any recipient of an Incentive adversely affected by such amended
or modified terms has consented to such amendment or modification.  No
amendment or modification to an Incentive, however, whether pursuant to this
Section 2 or any other provisions of the Plan, will be deemed to be a re-grant
of such Incentive for purposes of this Plan.  If at any time there is
no Committee, then for purposes of the Plan the term “Committee” shall mean the
Company’s Board of Directors.

    

    2.2           In
the event of (i) any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, divestiture (including a spin-off) or any other similar
change in corporate structure or capitalization, (ii) any purchase,
acquisition, sale or disposition of all or substantially all of the assets or a
substantial business or (iii) any other similar occurrence, in each case with
respect to the Company or any other affiliate of the Company whose performance
is relevant to the grant or vesting of an Incentive, the Committee (or, if the
Company is not the surviving corporation in any such transaction, the board of
directors of the surviving corporation) may, without the consent of any affected
participant, amend or modify the vesting criteria of any outstanding Incentive
that is based in whole or in part on the financial performance of the Company
(or any subsidiary or division thereof) or such other entity so as equitably to
reflect such event, with the desired result that the criteria for evaluating
such financial performance of the Company or such other entity will be
substantially the same (in the sole discretion of the Committee or the board of
directors of the surviving corporation) following such event as prior to such
event; provided, however, that the amended or modified terms are permitted by
the Plan as then in effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    3.           Eligible
Participants.  Employees of the Company or its subsidiaries
(including officers and employees of the Company or its subsidiaries), directors
and consultants, advisors or other independent contractors who provide services
to the Company or its subsidiaries (including members of the Company’s
scientific advisory board) shall become eligible to receive Incentives under the
Plan when designated by the Committee.  Participants may be designated
individually or by groups or categories (for example, by pay grade) as the
Committee deems appropriate.  Participation by officers of the Company
or its subsidiaries and any performance objectives relating to such officers
must be approved by the Committee.  Participation by others and any
performance objectives relating to others may be approved by groups or
categories (for example, by pay grade) and authority to designate participants
who are not officers and to set or modify such targets may be
delegated.

    

    4.           Types of
Incentives.  Incentives under the Plan may be granted in any
one or a combination of the following forms:  (a) Incentive Stock
Options and Nonstatutory Stock Options (Section 6); (b) stock awards (Section
7); (c) restricted stock (Section 7); and (d) performance shares (Section
8).  Incentive Stock Options may only be granted to employees of the
Company.  Officers and directors who are not also employees of the
Company may not be granted Incentive Stock Options.

    

     5.           Shares Subject to the
Plan.

    

    5.1.           Number of
Shares.  Subject to adjustment as provided in Section 10.6, the
number of shares of Common Stock which may be issued under the Plan shall not
exceed 925,000 shares of Common Stock.  Of such aggregate number of
shares of Common Stock that may be issued under the Plan, the maximum number of
shares that may be issued as Incentive Stock Options under Section 422 of the
Code is 925,000.  Any shares of Common Stock available for issuance as
Incentive Stock Options may be alternatively issued as other types of Incentives
under the Plan.  Shares of Common Stock that are issued under the Plan
or that are subject to outstanding Incentives will be applied to reduce the
maximum number of shares of Common Stock remaining available for issuance under
the Plan.  No individual may be granted Incentives under the Plan with
respect to more than 300,000 shares of Common Stock in any year.

    

    5.2.           Cancellation.  In
the event that a stock option granted hereunder expires or is terminated or
canceled unexercised or unvested as to any shares of Common Stock, such shares
may again be issued under the Plan either pursuant to stock options or
otherwise.  In the event that shares of Common Stock are issued as
restricted stock or pursuant to a stock award and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon issuance thereof,
such forfeited and reacquired shares may again be issued under the Plan, either
as restricted stock, pursuant to stock awards or otherwise.  The
Committee may also determine to cancel, and agree to the cancellation of, stock
options in order to make a participant eligible for the grant of a stock option
at a lower price than the option to be canceled.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    6.           Stock
Options.  A stock option is a right to purchase shares of
Common Stock from the Company.  The Committee may designate whether an
option is to be considered an Incentive Stock Option or a Nonstatutory Stock
Option.  To the extent that any Incentive Stock Option granted under
the Plan ceases for any reason to qualify as an “Incentive Stock Option” for
purposes of Section 422 of the Code, such Incentive Stock Option will continue
to be outstanding for purposes of the Plan but will thereafter be deemed to be a
Nonstatutory Stock Option.  Each stock option granted by the Committee
under this Plan shall be subject to the following terms and
conditions:

    

    6.1.           Price.  The
option price per share shall be determined by the Committee, subject to
adjustment under Section 10.6.

    

    6.2.           Number.  The
number of shares of Common Stock subject to the option shall be determined by
the Committee, subject to adjustment as provided in Section 10.6.

    

    6.3.           Duration and Time for
Exercise.  Subject to earlier termination as provided in
Section 10.4, the term of each stock option shall be determined by the Committee
but shall not exceed ten years from the date of grant.  Each stock
option shall become exercisable at such time or times during its term as shall
be determined by the Committee at the time of grant.  The Committee
may accelerate the exercisability of any stock option.

    

    6.4.           Manner of
Exercise.  Subject to the conditions contained in this Plan and
in the agreement with the recipient evidencing such option, a stock option may
be exercised, in whole or in part, by giving written notice to the Company,
specifying the number of shares of Common Stock to be purchased and accompanied
by the full purchase price for such shares.  The exercise price shall
be payable (a) in United States dollars upon exercise of the option and may be
paid by cash; uncertified or certified check; bank draft; (b) at the discretion
of the Committee, by delivery of shares of Common Stock that are already owned
by the participant in payment of all or any part of the exercise price, which
shares shall be valued for this purpose at the Fair Market Value on the date
such option is exercised; or (c) following the date that the Company’s stock
becomes publicly traded, in accordance with procedures previously approved by
the Committee, through the sale of the shares of Common Stock acquired on
exercise of a stock option through a bank or broker-dealer to whom the
participant has submitted an irrevocable notice of exercise and irrevocable
instructions to deliver promptly to the Company the amount of sale proceeds to
pay the exercise price for such shares together with, if requested by the
Company, the amount of any Federal, state, local or foreign withholding taxes
payable by the participant in connection with such exercise.  The
shares of Common Stock delivered by the participant pursuant to Section 6.4(b)
must have been held by the participant for a period of not less than six months
prior to the exercise of the option, unless otherwise determined by the
Committee.  Prior to the issuance of shares of Common Stock upon the
exercise of a stock option, a participant shall have no rights as a
shareholder.  Except as otherwise provided in the Plan, no adjustment
will be made for dividends or distributions with respect to such stock options
as to which there is a record date preceding the date the participant becomes
the holder of record of such shares, except as the Committee may determine in
its discretion.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    6.5.           Incentive Stock
Options.  Notwithstanding anything in the Plan to the contrary,
the following additional provisions shall apply to the grant of stock options
which are intended to qualify as Incentive Stock Options (as such term is
defined in Section 422 of the Code):

    

    (a)           The
aggregate Fair Market Value (determined as of the time the option is granted) of
the shares of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any participant during any calendar year
(under the Plan and any other incentive stock option plans of the Company or any
subsidiary or parent corporation of the Company) shall not exceed
$100,000.  The determination will be made by taking incentive stock
options into account in the order in which they were granted.

    

    (b)           Any
Incentive Stock Option certificate authorized under the Plan shall contain such
other provisions as the Committee shall deem advisable, but shall in all events
be consistent with and contain all provisions required in order to qualify the
options as Incentive Stock Options.

    

    (c)           All
Incentive Stock Options must be granted within ten years from the earlier of the
date on which this Plan was adopted by board of directors or the date this Plan
was approved by the Company’s shareholders.

    

    (d)           Unless
sooner exercised, all Incentive Stock Options shall expire no later than 10
years after the date of grant.  No Incentive Stock Option may be
exercisable after ten (10) years from its date of grant (five (5) years from its
date of grant if, at the time the Incentive Stock Option is granted, the
Participant owns, directly or indirectly, more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation of the Company).

    

    (e)           The
exercise price for Incentive Stock Options shall be not less than 100% of the
Fair Market Value of one share of Common Stock on the date of grant; provided
that the exercise price shall be 110% of the Fair Market Value if, at the time
the Incentive Stock Option is granted, the participant owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the
Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    7.           Stock Awards and Restricted
Stock.  A stock award consists of the transfer by the Company
to a participant of shares of Common Stock, without other payment therefor, as
additional compensation for services to the Company.  The participant
receiving a stock award will have all voting, dividend, liquidation and other
rights with respect to the shares of Common Stock issued to a participant as a
stock award under this Section 7 upon the participant becoming the holder of
record of such shares.  A share of restricted stock consists of shares
of Common Stock which are sold or transferred by the Company to a participant at
a price determined by the Committee (which price shall be at least equal to the
minimum price required by applicable law for the issuance of a share of Common
Stock) and subject to restrictions on their sale or other transfer by the
participant, which restrictions and conditions may be determined by the
Committee as long as such restrictions and conditions are not inconsistent with
the terms of the Plan.  The transfer of Common Stock pursuant to stock
awards and the transfer and sale of restricted stock shall be subject to the
following terms and conditions:

    

    7.1.           Number of
Shares.  The number of shares to be transferred or sold by the
Company to a participant pursuant to a stock award or as restricted stock shall
be determined by the Committee.

    

    7.2.           Sale
Price.  The Committee shall determine the price, if any, at
which shares of restricted stock shall be sold or granted to a participant,
which may vary from time to time and among participants and which may be below
the Fair Market Value of such shares of Common Stock at the date of
sale.

    

    7.3.           Restrictions.  All
shares of restricted stock transferred or sold hereunder shall be subject to
such restrictions as the Committee may determine, including, without limitation
any or all of the following:

    

    (a)           a
prohibition against the sale, transfer, pledge or other encumbrance of the
shares of restricted stock, such prohibition to lapse at such time or times as
the Committee shall determine (whether in annual or more frequent installments,
at the time of the death, disability or retirement of the holder of such shares,
or otherwise);

    

    (b)           a
requirement that the holder of shares of restricted stock forfeit, or (in the
case of shares sold to a participant) resell back to the Company at his or her
cost (or, if lower, the then Fair Market Value of such shares), all or a part of
such shares in the event of termination of his or her employment or consulting
engagement during any period in which such shares are subject to restrictions;
or

    

    (c)           such
other conditions or restrictions as the Committee may deem
advisable.

    

    7.4.           Escrow.  In
order to enforce the restrictions imposed by the Committee pursuant to Section
7.3, the participant receiving restricted stock shall enter into an agreement
with the Company setting forth the conditions of the grant.  Shares of
restricted stock shall be registered in the name of the participant and
deposited, together with a stock power endorsed in blank, with the
Company.  Each such certificate shall bear a legend in substantially
the following form:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
transferability of this certificate and the shares of Common Stock represented
by it are subject to the terms and conditions (including conditions of
forfeiture) contained in the 2006 Stock Incentive Plan of PICTON HOLDING COMPANY, INC.
(the “Company”), and an agreement entered into between the registered
owner and the Company.  A copy of the 2006 Stock Incentive Plan and
the agreement is on file in the office of the secretary of the
Company.

    

    7.5.           End of
Restrictions.  Subject to Section 10.5, at the end of any time
period during which the shares of restricted stock are subject to forfeiture and
restrictions on transfer, such shares will be delivered free of all restrictions
to the participant or to the participant’s legal representative, beneficiary or
heir.

    

    7.6.           Shareholder.  Subject
to the terms and conditions of the Plan, each participant receiving restricted
stock shall have all the rights of a shareholder with respect to shares of stock
during any period in which such shares are subject to forfeiture and
restrictions on transfer, including without limitation, the right to vote such
shares.  Dividends paid in cash or property other than Common Stock
with respect to shares of restricted stock shall be paid to the participant
currently.  Unless the Committee determines otherwise in its sole
discretion, any dividends or distributions (including regular quarterly cash
dividends) paid with respect to shares of Common Stock subject to the
restrictions set forth above will be subject to the same restrictions as the
shares to which such dividends or distributions relate.  In the event
the Committee determines not to pay dividends or distributions, the Committee
will determine in its sole discretion whether any interest will be paid on such
dividends or distributions.  In addition, the Committee in its sole
discretion may require such dividends and distributions to be reinvested (and in
such case the participant consents to such reinvestment) in shares of Common
Stock that will be subject to the same restrictions as the shares to which such
dividends or distributions relate.

    

    8.           Performance
Shares.  A performance share consists of an award which shall
be paid in shares of Common Stock, as described below.  The grant of a
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:

    

    8.1.           Performance
Objectives.  Each performance share will be subject to
performance objectives for the Company or one of its operating units to be
achieved by the participant before the end of a specified period.  The
number of performance shares granted shall be determined by the Committee and
may be subject to such terms and conditions, as the Committee shall
determine.  If the performance objectives are achieved, each
participant will be paid in shares of Common Stock or cash as determined by the
Committee.  If such objectives are not met, each grant of performance
shares may provide for lesser payments in accordance with formulas established
in the award.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.2.           Not
Shareholder.  The grant of performance shares to a participant
shall not create any rights in such participant as a shareholder of the Company,
until the payment of shares of Common Stock with respect to an
award.

    

    8.3.           No
Adjustments.  No adjustment shall be made in performance shares
granted on account of cash dividends which may be paid or other rights which may
be issued to the holders of Common Stock prior to the end of any period for
which performance objectives were established.

    

    8.4.           Expiration of Performance
Share.  If any participant’s employment or consulting
engagement with the Company is terminated for any reason other than normal
retirement, death or disability prior to the achievement of the participant’s
stated performance objectives, all the participant’s rights on the performance
shares shall expire and terminate unless otherwise determined by the
Committee.  In the event of termination of employment or consulting by
reason of death, disability, or normal retirement, the Committee, in its own
discretion may determine what portions, if any, of the performance shares should
be paid to the participant.

    

    9.           Change of
Control.

    

    9.1           Change in
Control.  For purposes of this Section 9, a “Change in Control” of the
Company will mean the following:

    

    (a)           the
sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company;

    

    (b)           the
approval by the shareholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company;

    

    (c)           if
any person becomes after the effective date of the Plan the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
(i) 20% or more, but not 50% or more, of the combined voting power of the
Company’s outstanding securities ordinarily having the right to vote at
elections of directors, unless the transaction resulting in such ownership has
been approved in advance by the Continuing Directors (as defined below), or (ii)
50% or more of the combined voting power of the Company’s outstanding securities
ordinarily having the right to vote at elections of directors (regardless of any
approval by the Continuing Directors); provided that a traditional institutional
or venture capital financing transaction shall be excluded from this
definition;

    

    (d)           a
merger or consolidation to which the Company is a party if the shareholders of
the Company immediately prior to effective date of such merger or consolidation
have “beneficial ownership” (as defined in Rule 13d-3 under the Exchange
Act), immediately following the effective date of such merger or consolidation,
of securities of the surviving corporation representing (i) 50% or more, but
less than 80%, of the combined voting power of the surviving corporation’s then
outstanding securities ordinarily having the right to vote at elections of
directors, unless such merger or consolidation has been approved in advance by
the Continuing Directors, or (ii) less than 50% of the combined voting
power of the surviving corporation’s then outstanding securities ordinarily
having the right to vote at elections of directors (regardless of any approval
by the Continuing Directors); or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    (e)           after
the date the Company’s securities are first sold in a registered public
offering, the Continuing Directors cease for any reason to constitute at least a
majority of the Board.

    

    9.2           Continuing
Directors.  For purposes of this Section 9, “Continuing Directors” of the
Company will mean any individuals who are members of the Board on the effective
date of the Plan and any individual who subsequently becomes a member of the
Board whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least a majority of the Continuing Directors
(either by specific vote or by approval of the Company’s proxy statement in
which such individual is named as a nominee for director without objection to
such nomination).

    

    9.3           Acceleration of
Incentives.  Without limiting the authority of the Committee
under the Plan, if a Change in Control of the Company occurs whereby the
acquiring entity or successor to the Company does not assume the Incentives or
replace them with substantially equivalent incentive awards (as determined by
the Committee in its reasonable discretion), unless otherwise provided by the
Committee in its sole discretion in the agreement evidencing an Incentive at the
time of grant, then, as of the date of the Change of Control (a) all outstanding
options will vest and will become immediately exercisable in full and, subject
to Section 9.4, will remain exercisable for the remainder of their terms,
regardless of whether the participant to whom such options have been granted
remains in the employ or service of the Company or any subsidiary of the Company
or any acquiring entity or successor to the Company; (b) the restrictions on all
shares of restricted stock awards shall lapse immediately; and (c) all
performance shares shall be deemed to be met and payment made
immediately.

    

    9.4           Cash Payment for
Options.  If a Change in Control of the Company occurs, then
the Committee, if approved by the Committee in its sole discretion either in an
agreement evidencing an option at the time of grant or at any time after the
grant of an option, and without the consent of any participant affected thereby,
may determine that:

    

    
      	
               
      

            	
              (a)

            	
              some
      or all participants holding outstanding options will receive, with respect
      to some or all of the shares of Common Stock subject to such options, as
      of the effective date of any such Change in Control of the Company, cash
      in an amount equal to the excess of the Fair Market Value of such shares
      immediately prior to the effective date of such Change in Control of the
      Company over the exercise price per share of such options;
    and

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              any
      options as to which, as of the effective date of any such Change in
      Control, the Fair Market Value of the shares of Common Stock subject to
      such options is less than or equal to the exercise price per share of such
      options, shall terminate as of the effective date of any such Change in
      Control.

            

    

    

    
      	
               
      

            	
              If
      the Committee makes a determination as set forth in subparagraph (a) of
      this Section 9.4, then as of the effective date of any such Change in
      Control of the Company such options will terminate as to such shares and
      the participants formerly holding such options will only have the right to
      receive such cash payment(s).  If the Committee makes a
      determination as set forth in subparagraph (b) of this Section 9.4, then
      as of the effective date of any such Change in Control of the Company such
      options will terminate, become void and expire as to all unexercised
      shares of Common Stock subject to such options on such date, and the
      participants formerly holding such options will have no further rights
      with respect to such options.

            

    

    

    10.           General.

    

    10.1.         Effective
Date.  The Plan will become effective upon approval by the
Company’s board of directors.

    

    10.2.         Duration.  The
Plan shall remain in effect until all Incentives granted under the Plan have
either been satisfied by the issuance of shares of Common Stock or the payment
of cash or been terminated under the terms of the Plan and all restrictions
imposed on shares of Common Stock in connection with their issuance under the
Plan have lapsed.  No Incentives may be granted under the Plan after
the tenth anniversary of the date the Plan is approved by the shareholders of
the Company.

    

    10.3.         Non-transferability of
Incentives.  Except, in the event of the holder’s death, by
will or the laws of descent and distribution to the limited extent provided in
the Plan or the Incentive, unless approved by the Committee, no stock option,
restricted stock or performance award may be transferred, pledged or assigned by
the holder thereof, either voluntarily or involuntarily, directly or indirectly,
by operation of law or otherwise, and the Company shall not be required to
recognize any attempted assignment of such rights by any
participant.  During a participant’s lifetime, an Incentive may be
exercised only by him or her or by his or her guardian or legal
representative.

    

    10.4.         Effect of Termination or
Death.  In the event that a participant ceases to be an
employee of or consultant to the Company, or the participant’s other service
with the Company is terminated, for any reason, including death, any Incentives
may be exercised or shall expire at such times as may be determined by the
Committee in its sole discretion in the agreement evidencing an
Incentive.  Notwithstanding the other provisions of this
Section 10.4, except as may be set forth in an agreement evidencing an
Incentive, upon a participant’s termination of employment or other service with
the Company and all subsidiaries, the Committee may, in its sole discretion
(which may be exercised at any time on or after the date of grant, including
following such termination), cause options (or any part thereof) then held by
such participant to become or continue to become exercisable and/or remain
exercisable following such termination of employment or service and Restricted
Stock Awards, Performance Shares and Stock Awards then held by such participant
to vest and/or continue to vest or become free of transfer restrictions, as the
case may be, following such termination of employment or service, in each case
in the manner determined by the Committee; provided, however, that no Incentive
may remain exercisable or continue to vest beyond its expiration
date.  Any Incentive Stock Option that remains unexercised more than
one (1) year following termination of employment by reason of death or
disability (as defined in Section 22(e)(3) of the Code) or more than three (3)
months following termination for any reason other than death or disability will
thereafter be deemed to be a Nonstatutory Stock Option.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    10.5.         Additional
Conditions.  Notwithstanding anything in this Plan to the
contrary: (a) the Company may, if it shall determine it necessary or desirable
for any reason, at the time of award of any Incentive or the issuance of any
shares of Common Stock pursuant to any Incentive, require the recipient of the
Incentive, as a condition to the receipt thereof or to the receipt of shares of
Common Stock issued pursuant thereto, to deliver to the Company a written
representation of present intention to acquire the Incentive or the shares of
Common Stock issued pursuant thereto for his or her own account for investment
and not for distribution; and (b) if at any time the Company further determines,
in its sole discretion, that the listing, registration or qualification (or any
updating of any such document) of any Incentive or the shares of Common Stock
issuable pursuant thereto is necessary on any securities exchange or under any
federal or state securities or blue sky law, or that the consent or approval of
any governmental regulatory body is necessary or desirable as a condition of, or
in connection with the award of any Incentive, the issuance of shares of Common
Stock pursuant thereto, or the removal of any restrictions imposed on such
shares, such Incentive shall not be awarded or such shares of Common Stock shall
not be issued or such restrictions shall not be removed, as the case may be, in
whole or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company.  Notwithstanding any other provision of the
Plan or any agreements entered into pursuant to the Plan, the Company will not
be required to issue any shares of Common Stock under this Plan, and a
participant may not sell, assign, transfer or otherwise dispose of shares of
Common Stock issued pursuant to any Incentives granted under the Plan, unless
(a) there is in effect with respect to such shares a registration statement
under the Securities Act of 1933, as amended (the “Securities Act”), and any
applicable state or foreign securities laws or an exemption from such
registration under the Securities Act and applicable state or foreign securities
laws, and (b) there has been obtained any other consent, approval or permit
from any other regulatory body which the Committee, in its sole discretion,
deems necessary or advisable.  The Company may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by
the Company in order to comply with such securities law or other
restrictions.  The Committee may restrict the rights of participants
to the extent necessary to comply with Section 16(b) of the Exchange Act, the
Internal Revenue Code or any other applicable law or regulation. The grant of an
Incentive award pursuant to the Plan shall not limit in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, exchange or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    10.6.         Adjustment.  In
the event of any merger, consolidation or reorganization of the Company with any
other corporation or corporations, there shall be substituted for each of the
shares of Common Stock then subject to the Plan, including shares subject to
restrictions, options, or achievement of performance share objectives, the
number and kind of shares of stock or other securities to which the holders of
the shares of Common Stock will be entitled pursuant to the
transaction.  In the event of any recapitalization, reclassification,
stock dividend, stock split, combination of shares or other similar change in
the corporate structure of the Company or capitalization of the Company, the
exercise price of an outstanding Incentive and the number of shares of Common
Stock then subject to the Plan, and the maximum number of shares with respect to
which Incentives may be granted in any year, including shares subject to
restrictions, options or achievements of performance shares, shall be adjusted
in proportion to the change in outstanding shares of Common Stock in order to
prevent dilution or enlargement of the rights of the participants.  In
the event of any such adjustments, the purchase price of any option, the
performance objectives of any Incentive, and the shares of Common Stock issuable
pursuant to any Incentive shall be adjusted as and to the extent appropriate, in
the discretion of the Committee, to provide participants with the same relative
rights before and after such adjustment.

    

    10.7.         Incentive Plans and
Agreements.  Except in the case of stock awards, the terms of
each Incentive shall be stated in a plan or agreement approved by the
Committee.  The Committee may also determine to enter into agreements
with holders of options to reclassify or convert certain outstanding options,
within the terms of the Plan, as Incentive Stock Options or as Nonstatutory
Stock Options.

    

    10.8.         Withholding.

    

    (a)           The
Company shall have the right to (i) withhold and deduct from any payments made
under the Plan or from future wages of the participant (or from other amounts
that may be due and owing to the participant from the Company or a subsidiary of
the Company), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all foreign, federal, state and
local withholding and employment-related tax requirements attributable to an
Incentive, or (ii) require the participant promptly to remit the amount of such
withholding to the Company before taking any action, including issuing any
shares of Common Stock, with respect to an Incentive.  At any time
when a participant is required to pay to the Company an amount required to be
withheld under applicable income tax laws in connection with a distribution of
Common Stock or upon exercise of an option, the participant may satisfy this
obligation in whole or in part by electing (the “Election”) to have the Company
withhold from the distribution shares of Common Stock having a value up to the
minimum amount required to be withheld.  The value of the shares to be
withheld shall be based on the Fair Market Value of the Common Stock on the date
that the amount of tax to be withheld shall be determined (“Tax Date”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    (b)           Each
Election must be made prior to the Tax Date.  The Committee may
disapprove of any Election, may suspend or terminate the right to make
Elections, or may provide with respect to any Incentive that the right to make
Elections shall not apply to such Incentive.  An Election is
irrevocable.

    

    (c)           If
a participant is an officer or director of the Company within the meaning of
Section 16 of the Exchange Act, then an Election is subject to the following
additional restrictions:

    

    (1)           No
Election shall be effective for a Tax Date which occurs within six months of the
grant or exercise of the award, except that this limitation shall not apply in
the event death or disability of the participant occurs prior to the expiration
of the six-month period.

    

    (2)           The
Election must be made either six months prior to the Tax Date or must be made
during a period beginning on the third business day following the date of
release for publication of the Company’s quarterly or annual summary statements
of sales and earnings and ending on the twelfth business day following such
date.

    

    (d)           If
the option granted to a participant hereunder is an Incentive Stock Option, and
if the participant sells or otherwise disposes of any of the shares of Common
Stock acquired pursuant to the Incentive Stock Option on or before the later of
(1) the date two years after the date of grant, or (2) the date one
year after the date of exercise, the participant shall immediately notify the
Company in writing of such disposition.  The participant agrees that
the participant may be subject to income tax withholding by the Company on the
compensation income recognized by the participant from the early disposition by
payment in cash or out of the current earnings paid to the
participant.

    

    10.9.         No Continued Employment,
Engagement or Right to Corporate Assets.  No participant under
the Plan shall have any right, because of his or her participation, to continue
in the employ of the Company for any period of time or to any right to continue
his or her present or any other rate of compensation.  Nothing
contained in the Plan shall be construed as giving an employee, a consultant,
such persons’ beneficiaries or any other person any equity or interests of any
kind in the assets of the Company or creating a trust of any kind or a fiduciary
relationship of any kind between the Company and any such person.

    

    10.10.       Deferral
Permitted.  Payment of cash or distribution of any shares of
Common Stock to which a participant is entitled under any Incentive shall be
made as provided in the Incentive.  Subject to the limitations
specified in Section 409A of the Code, payment may be deferred at the option of
the participant if provided in the Incentive.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    10.11.       Amendment of the
Plan.  The Board may amend, suspend or discontinue the Plan at
any time; provided, however, that no amendments to the Plan will be effective
without approval of the shareholders of the Company if shareholder approval of
the amendment is then required pursuant to Section 422 of the Code, the
regulations promulgated thereunder or the rules of any stock exchange or Nasdaq
or similar regulatory body.  No termination, suspension or amendment
of the Plan may adversely affect any outstanding Incentive without the consent
of the affected participant; provided, however, that this sentence will not
impair the right of the Committee to take whatever action it deems appropriate
under the Plan.

    

    
      	 
      

    

    10.12.       Definition of Fair Market
Value. For purposes of this Plan, the “Fair Market Value” of a share
of Common Stock at a specified date shall, unless otherwise expressly provided
in this Plan, be the amount which the Committee or the board of directors of the
Company determines in good faith in the exercise of its reasonable discretion to
be 100% of the fair market value of such a share as of the date in question;
provided, however, that notwithstanding the foregoing, if such shares are listed
on a U.S. securities exchange or are quoted on the Nasdaq National Market System
or Nasdaq SmallCap Stock Market (“Nasdaq”), then Fair Market
Value shall be determined by reference to the last sale price of a share of
Common Stock on such U.S. securities exchange or Nasdaq on the applicable date.
If such U.S. securities exchange or Nasdaq is closed for trading on such date,
or if the Common Stock does not trade on such date, then the last sale price
used shall be the one on the date the Common Stock last traded on such U.S.
securities exchange or Nasdaq.

    

    10.13        Breach of Confidentiality,
Assignment of Inventions, or Non-Compete
Agreements.  Notwithstanding anything in the Plan to the
contrary, in the event that a participant materially breaches the terms of any
confidentiality, assignment of inventions, or non-compete agreement entered into
with the Company or any subsidiary of the Company, whether such breach occurs
before or after termination of such participant’s employment or other service
with the Company or any subsidiary, the Committee in its sole discretion may
immediately terminate all rights of the participant under the Plan and any
agreements evidencing an Incentive then held by the participant without notice
of any kind.

    

    10.13        Governing
Law.  The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations and actions
relating to the Plan will be governed by and construed exclusively in accordance
with the laws of the State of New York, notwithstanding the conflicts of laws
principles of any jurisdictions.

    

    10.14        Successors and
Assigns.  The Plan will be binding upon and inure to the
benefit of the successors and permitted assigns of the Company and the
participants in the Plan.

    

    10.15        Lock-up
Agreement.  Each recipient of securities here­under agrees,
in connection with the first registration with the United States Securities and
Exchange Commission under the Securities Act of 1933, as amended, of the public
sale of the Company's Common Stock, not to sell, make any short sale of, loan,
grant any option for the purchase of or otherwise dispose of any securities of
the Company (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as the Company or the underwriters, as the case may be, shall
specify.  Each such recipient agrees that the Company may instruct its
transfer agent to place stop-transfer notations in its records to enforce this
Section.  Each such recipient agrees to execute a form of agreement
reflecting the foregoing restrictions as requested by the underwriters managing
such offering.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.16        Nature of
Payments.  Incentives shall be special incentive payments to
the participants and shall not be taken into account in computing the amount of
salary or compensation of a participant for purposes of determining any pension,
retirement, death or other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan of the Company
or any subsidiary or (b) any agreement between (i) the Company or any subsidiary
and (ii) a participant, except as such plan or agreement shall otherwise
expressly provide.

    

    11.17        Non-Uniform
Determinations.  The Committee’s determinations under the Plan
need not be uniform and may be made by the Committee selectively among persons
who receive, or are eligible to receive, Incentives, whether or not such persons
are similarly situated.  Without limiting the generality of the
foregoing, the Committee shall be entitled to enter into non-uniform and
selective Incentive agreements as to (a) the identity of the participants, (b)
the terms and provisions of Incentives and (c) the treatment of terminations of
employment or service.

    

    11.18        Reservation of
Shares.  The Company, during the term of this Plan, will at all
times reserve and keep available such number of shares of Common Stock as shall
be sufficient to satisfy the requirements of the Plan.Unassociated Document

    
      

      EMPLOYMENT
AGREEMENT

       

      This Agreement, dated as of February 14,
2007 (this “Agreement”), is between CORMEDIX INC., a Delaware corporation with
principal executive offices at 787 Seventh Avenue, 48th
Floor, New York, New York
10019 (the “Company”), and Mark Houser, M.D., residing at 8
Barlow Drive, Califon, NJ 07830 (the “Employee”).

      

      WITNESSETH:

      

      WHEREAS, the Company desires to employ the
Employee as Chief Medical Officer of the Company, and the Employee desires to serve the
Company in those capacities, upon the terms and subject to the conditions
contained in this Agreement;

      

      NOW,
THEREFORE, in consideration
of the mutual covenants and agreements herein contained, the parties hereto
hereby agree as
follows:

      

      1.  Employment.

      

      (a) Services. The Employee will be employed by the
Company as its Chief Medical Officer. The Employee will report to the Chief
Executive Officer of
the Company and shall
perform such duties as are consistent with his position as Chief Medical Officer (the
“Services”). The Employee agrees to perform such
duties faithfully, to devote all of his working time, attention and energies to
the business of
the Company, and while he
remains employed, not to engage in any other business activity that is in conflict with his
duties and obligations to the Company without the prior written consent
of the Chief Executive Officer of the Company
and the Board of Directors of the Company (the
“Board”).

      

      (b) Acceptance. Employee hereby accepts such employment and agrees to render the
Services.

      

      2.  Term. The Employee’s employment under this Agreement (as it
may be extended, the “Term”)
shall commence on March 1, 2007 (the “Commencement
Date”)
and shall continue for a term of three (3) years, unless sooner terminated pursuant to Section 8
below; provided, however, that the Term shall be extended automatically for
additional one-year periods unless one party shall advise the other in writing
at least sixty (60)
days before the initial
expiration of the Term or
an anniversary date thereof that this Agreement shall no longer be so extended.
Notwithstanding anything to the contrary contained herein, Sections 5, 6 and 9
shall survive the expiration or termination hereof.

      

      3.  Best
Efforts; Place of Performance.

      

      (a) The Employee shall devote
substantially all of his business time, attention and energies to the business
and affairs of the Company and shall use his best efforts to advance the best
interests of the Company and shall not during the Term be actively engaged in any other business
activity, whether or not such business activity is pursued for gain, profit or
other pecuniary advantage, that will interfere with the performance by the
Employee of his duties hereunder or the Employee’s availability to perform such duties or that will
adversely affect, or negatively reflect upon, the Company.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (b) The duties to be performed by the
Employee hereunder shall be performed primarily at the principal office of the
Company in the New York, New York metropolitan area, subject to reasonable
travel requirements on behalf of the Company, or such other place as the
Board may reasonably designate. Notwithstanding the foregoing, the Company may
be relocated to another area or city within the United States with consent of the Board.

      

      4.  Compensation. As full compensation for the
performance by the Employee of his duties under this Agreement, the Company
shall pay the Employee as follows:

      

      (a)       Base
Salary.
The Company shall pay Employee a salary (the “Base
Salary”)
equal to Two Hundred Twenty Thousand Dollars ($220,000.00) per year. Payment
shall be made in accordance with the Company’s
normal payroll practices. The Board of Directors shall annually review the Base
Salary to determine whether an increase in the amount
thereof is warranted.

      

      (b)       Annual
Milestone Bonus.
At the discretion of the Board, the Employee
shall receive an annual bonus based on Employee’s
performance during each calendar year during the Term (the “Annual
Milestone Bonus”)
in an amount of up to thirty percent (30%) of his Base Salary (pro rated for any
partial calendar year of service), based on the attainment by the Employee of
certain financial, clinical development and business milestones (the
“Milestones”).
Milestones
for each calendar year shall be established by the Chief Executive Officer, in
conjunction with the Board, after consultation with the Employee, not more than
sixty (60) days following the beginning of each calendar year. The Annual
Milestone Bonus shall
be payable in cash as a lump-sum payment
no later than seventy-five (75) days after the end of each calendar
year.

      

      (c)       Restricted
Shares. As additional
compensation for the Services to be rendered by the Employee pursuant to this
Agreement, the Company
shall issue and sell to the Employee a number of restricted shares of common
stock, par value $0.001 (the “Common
Stock”), of the Company (the “Restricted
Shares”) representing two percent (2.0%)
of the outstanding Common Stock of the
Company (excluding certain
shares of Common Stock issued to management of the Company). The aggregate
purchase price for the Restricted Shares shall equal One Hundred Six Dollars
($106), which the Company represents is equal to the fair market value of those
Restricted Shares as of the date of purchase. The
Restricted Shares, to the extent unvested, shall be held in escrow at Paramount
BioSciences, LLC. On each anniversary of the Commencement Date, one-third
(33.3%) of the original number of Restricted Shares,
subject to stock splits,
subdivisions, or other similar transactions, shall vest, subject to the terms of
this Agreement, and the Escrow Agent shall release such vested shares to the
Employee. In connection with such grant, the Employee shall enter into the
Company’s standard restricted stock agreement attached
hereto as Exhibit
A and the escrow agreement
attached hereto as Exhibit
B which will incorporate
the foregoing provisions regarding the lapsing of the risk of forfeiture with
respect to the Restricted Shares and the relevant provisions contained in
Section 9 below. No Restricted Shares granted
hereunder shall vest unless the Employee is a current employee of the Company,
unless specifically stated herein.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (d)       Withholding. The Company shall withhold all
applicable federal, state
and local taxes and social security and such other amounts as may be required by
law from all amounts payable to the Employee under this Section
4.

      

      (e)       Expenses. The Company shall reimburse the
Employee for all normal, usual and necessary expenses incurred by the Employee
in furtherance of the business and affairs of the Company, including reasonable travel
and entertainment, upon timely receipt by the Company of appropriate vouchers or
other proof of the Employee’s expenditures and otherwise in
accordance with any expense reimbursement policy as may from time to time be
adopted by the Company.

      

      (f)       Other
Benefits. The Employee
shall be entitled to all rights and benefits for which he shall
be eligible under any benefit or other plans (including, without limitation,
dental, medical, medical reimbursement and hospital plans, pension plans,
employee stock purchase plans, profit sharing plans, bonus plans, prescription drug reimbursement plans,
short and long term disability plans, life insurance and other so-called
“fringe” benefits) as the Company shall make
available to its senior executives from time to time. In addition, until such
time as the Company establishes, and Employee becomes
eligible to participate in, a benefits program, the Company (i) shall reimburse
the Employee for his actual and documented costs incurred in maintaining his
current insurance plans pursuant to COBRA; and (ii) shall reimburse the Employee for his actual and
documented costs incurred in obtaining short and long term disability insurance
on terms substantially similar to those provided by such previous employer,
provided that the amounts reimbursed pursuant to the foregoing clauses (i) and (ii) shall not exceed One
Thousand Five Hundred Dollars ($1,500) in the aggregate per
month.

      

      (g)       Vacation. The Employee shall be entitled to a
vacation of four (4) weeks per annum, in addition to holidays observed by the
Company, to be taken in
accordance with the Company’s employee policies, and subject to the
requirement that no more than two weeks be taken consecutively and that all
vacation is subject to the prior approval of the Chief Executive Officer. Subject to the
Company’s vacation policy as in effect from time to time, the
Employee may not be entitled to carry any vacation forward to the next year of
employment and may not receive any compensation for unused vacation
days.

      

      5.  Confidential
Information and Inventions.

      

      (a)       The Employee recognizes and acknowledges that in the
course of his duties he is likely to receive confidential or proprietary
information owned by the Company, its affiliates or third parties with whom the
Company or any such affiliates has an obligation of confidentiality. Accordingly, during and after the
Term, the Employee agrees to keep confidential and not disclose or make
accessible to any other person or use for any other purpose other than in
connection with the fulfillment of his duties under this Agreement,
any Confidential and Proprietary
Information (as defined below) owned by, or received by or on behalf of, the
Company or any of its affiliates. “Confidential and Proprietary
Information” shall include, but shall not be limited
to, confidential or proprietary scientific or technical information,
data, formulas and related concepts, business
plans (both current and
under development), client lists, promotion and marketing programs, trade
secrets, or any other confidential or proprietary business information relating
to development programs, costs, revenues, marketing, investments, sales
activities, promotions, credit and financial data,
manufacturing processes, financing methods, plans or the business and affairs of
the Company or of any affiliate or client of the Company. The Employee expressly
acknowledges the trade secret status of the Confidential and Proprietary Information and that the
Confidential and Proprietary Information constitutes a protectable business
interest of the Company. The Employee agrees: (i) not to use any such
Confidential and Proprietary Information for himself or others; and (ii)
not to take any Company material or
reproductions (including but not limited to writings, correspondence, notes,
drafts, records, invoices, technical and business policies, computer programs or
disks) thereof from the Company’s offices at any time during his
employment by the Company,
except as required in the execution of the Employee’s duties to the Company. The Employee
agrees to return immediately all Company material and reproductions (including
but not limited, to writings, correspondence, notes, drafts, records, invoices, technical and business
policies, computer programs or disks) thereof in his possession to the Company
upon request and in any event as soon as practicable following his termination
of employment.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      (b)       Except with prior written authorization by the Company, the Employee agrees not
to disclose or publish any of the Confidential and Proprietary Information, or any confidential, scientific,
technical or business information of any other party to whom the
Company or any of its affiliates owes an obligation of confidence, at any time
during or after his employment with the Company.

      

      (c)       The Employee agrees that all inventions,
discoveries, improvements and patentable or copyrightable works (“Inventions”) initiated, conceived or made by him,
either alone or in
conjunction with others, during the Term that relate to the business of the
Company shall be the sole property of the Company to the maximum extent
permitted by applicable law and, to the extent permitted by law, shall be “works made for hire” as that term is defined in the United States
Copyright Act (17 U.S.C.A., Section 101). The Company shall be
the sole owner of all patents, copyrights, trade secret rights, and other
intellectual property or other rights in connection
therewith. The Employee
hereby assigns to the Company all right, title and interest he may have or
acquire in all such Inventions; provided, however, that the Board may in its
sole discretion agree to waive the Company’s rights pursuant to this Section 5(c)
with respect to any
Invention. The Employee further agrees to assist the Company in every proper way
(but at the Company’s expense) to obtain and from time to
time enforce patents, copyrights or other rights on such Inventions in any and
all countries, and to that end the Employee will execute all documents
necessary:

      

      (i) to apply for, obtain and vest in the
name of the Company alone (unless the Company otherwise directs) letters patent,
copyrights or other analogous protection in any country throughout the world and
when so obtained or vested
to renew and restore the same; and

      

      (ii) to defend any opposition
proceedings in respect of such applications and any opposition proceedings or
petitions or applications for revocation of such letters patent, copyright or
other analogous
protection.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      (d)       The Employee acknowledges that while
performing the Services under this Agreement the Employee may locate, identify
and/or evaluate patented or patentable inventions having commercial potential in
the fields of pharmacy, pharmaceutical, biotechnology, healthcare,
technology and other fields which may be of potential interest to the Company or
one of its affiliates (the “Third Party
Inventions”). The Employee understands, acknowledges
and agrees that all rights to, interests in or opportunities regarding, all
Third-Party Inventions identified by the Company, any of its affiliates or
either of the foregoing persons’ officers, directors, employees
(including the Employee), agents or consultants during the Term shall be and
remain the sole and
exclusive property of the Company or such affiliate and the Employee shall have
no rights whatsoever to such Third-Party Inventions and will not pursue for
himself or for others any transaction relating to the Third-Party Inventions
which is not on behalf of the
Company.

      

      (e)      
Employee agrees that he will promptly disclose to the Company, or any persons
designated by the Company, all improvements and Inventions made or conceived or
reduced to practice or learned by him, either alone or jointly with others, during the
Term.

      

      (f)       
The provisions of this
Section 5 shall survive any termination of this Agreement.

      

      6.     Non-Competition, Non-Solicitation and
Non-Disparagement.

      

      (a)      
The Employee understands and recognizes that his services to the Company
are special and unique and
that in the course of performing such services the Employee will have access to
and knowledge of Confidential and Proprietary Information and the Employee
agrees that, during the Term and for a period of six (6) months
thereafter, he shall not in any manner, directly
or indirectly, on behalf of himself or any person, firm, partnership, joint
venture, corporation or other business entity (“Person”), enter into or engage in any business
which is engaged in any business directly or indirectly competitive with the business
of the Company (a “Subsequent
Employer”), either as an individual for his own
account, or as a partner, joint venturer, owner, executive,
employee, independent contractor, principal, agent, consultant, salesperson,
officer, director or
shareholder of a Person in a business competitive with the Company, within the
geographic area of the Company’s business, which is deemed by the
parties hereto to be the United States; provided, however, that the Employee may
enter into or engage in any
Subsequent Employer as long as the Employee does not provide services to that
portion or portions of such Subsequent Employer’s business that is directly or
indirectly competitive with the business of the Company. The Employee
acknowledges that, due to
the unique nature of the Company’s business, the loss of any of its
clients or business flow or the improper use of its Confidential and Proprietary
Information could create significant instability and cause substantial damage to
the Company and its
affiliates and therefore the Company has a strong legitimate business interest
in protecting the continuity of its business interests and the restriction
herein agreed to by the Employee narrowly and fairly serves such an important
and critical business interest of the Company. For
purposes of this Agreement, the Company shall be deemed to be actively engaged
in the development and commercialization of therapeutics (including
drugs, medical devices and vaccines) for
those indications in which the Company or any of its direct or indirect
subsidiaries is actively engaged or has taken reasonable steps to become engaged
at the time of the termination of the Employee’s employment or during the
two year period prior thereto.
Notwithstanding the foregoing, nothing contained in this Section 6(a) shall be
deemed to prohibit the Employee from acquiring or holding, solely for
investment, publicly traded securities of any corporation, some or all of the
activities of which are competitive with
the business of the Company so long as such securities do not, in the aggregate,
constitute more than three percent (3%) of any class or series of outstanding
securities of such corporation.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (b)       The Employee hereby acknowledges and agrees that the covenant
against competition provided for pursuant to Section 6(a) is reasonable with
respect to its duration, geographic area and scope. If, at the time of enforcement of this
Section 6, a court holds that the restrictions stated herein are unreasonable under the
circumstances then existing, the parties hereto agree that the maximum duration,
scope or geographic area legally permissible under such circumstances will be
substituted for the duration, scope or area stated herein.

      

      (c)       During the Term and for a period of six
(6) months thereafter, the Employee shall not, directly or indirectly, without
the prior written consent of the Company:

      

      (i) solicit or induce any employee of the
Company or any of its affiliates to leave the employ of the Company or any such
affiliate; or hire for any purpose any employee of the Company or any affiliate
or any employee who has left the employment of the Company or any affiliate
within one year of the termination of such employee’s employment with the Company or any such affiliate
or at any time in violation of such employee’s non-competition agreement with the
Company or any such affiliate; or

      

      (ii) solicit or accept employment or be
retained by any Person who, at any time during the Term of this Agreement, was an agent, client or
customer of the Company where his position will be related to the business of
the Company; or

      

      (iii) solicit or accept the business of
any agent, client or customer of the Company with respect to products or
services similar to those
provided or supplied by the Company.

      

      (d)       The Company and the Employee each agree
that both during the Term and at all times thereafter, neither party shall
directly or indirectly disparage, whether or not true, the name or reputation of
the other party or any of
its affiliates, including but not limited to, any officer, director, employee or
shareholder of the Company or any of its affiliates.

      

      (e)       In the event that the Employee breaches
any provisions of Section 5 or this Section 6 or there is a threatened breach, then, in
addition to any other rights which the Company may have, the Company shall (i)
be entitled, without the posting of a bond or other security, to injunctive
relief to enforce the restrictions contained in such Sections and (ii) have the right to require the
Employee to account for and pay over to the Company all compensation, profits,
monies, accruals, increments and other benefits (collectively “Benefits”) derived or received by the Employee as a
result of any transaction constituting a breach of any of the
provisions of Sections 5 or 6 and the Employee hereby agrees to account for and
pay over such Benefits to the Company. The Company and the Employee agree that
any such action for injunctive or equitable relief shall be heard in a state or federal court
situated in the County and State of New York and each of the
parties hereto agrees to accept service of process by registered or certified mail
and to otherwise consent to the personal jurisdiction of such courts. The
Employee agrees that in an action pursuant to Sections 5 or 6, that if the Company makes a prima facie
showing that the Employee has violated or apparently intends to violate any of
the provisions of Sections 5 or 6, the Company need not prove either damage or
irreparable injury in order to obtain injunctive relief.

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      (f)       Each of the rights and remedies
enumerated in Section 6(e) shall be independent of the others and shall be in
addition to and not in lieu of any other rights and remedies available to the
Company at law or in equity. In the event that an actual proceeding is brought in equity to enforce the
provisions of Section 5 or this Section 6, the Employee shall not urge as a
defense that there is an adequate remedy at law nor shall the Company be
prevented from seeking any other remedies which may be
available.

      

      (g)       The provisions of this Section 6 shall
survive any termination of this Agreement.

      

      7.     Representations
and Warranties by the Employee.

      

      The Employee hereby represents and
warrants to the Company as follows:

      

      (i) Neither the execution or delivery of
this Agreement nor the performance by the Employee of his duties and
other obligations hereunder violate or will violate any statute, law,
determination or award, or conflict with or constitute a default or breach
of any covenant or
obligation under (whether immediately, upon the giving of notice or lapse of
time or both) any prior employment agreement, contract, or other instrument to
which the Employee is a party or by which he is bound.

      

      (ii) Employee will not use any confidential information or trade
secrets of any third party in his employment by the Company in violation of the
terms of the agreements under which he had access to or knowledge of such
confidential information or trade secrets.

      

      (iii) The Employee has the full right, power and legal
capacity to enter and deliver this Agreement and to perform his duties and other
obligations hereunder. This Agreement constitutes the legal, valid and binding
obligation of
the Employee enforceable
against him in accordance
with its terms. No approvals or consents of any persons or entities are required
for the Employee to execute and deliver this Agreement or perform his duties and
other obligations hereunder.

      

      8.     Termination. The Employee’s employment hereunder shall
be terminated upon the
Employee’s death and may be terminated as
follows:

      

      (a)           The Employee’s employment hereunder may be terminated
by the Company for Cause. Any of the following actions by the Employee shall
constitute “Cause”:

      

      (i) The willful failure, disregard or refusal by the Employee to
perform his duties hereunder;

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

      (ii) Any willful, intentional or grossly
negligent act by the Employee having the effect of injuring, in a material way
(whether financial or otherwise and as determined in good-faith by the Company), the business
or reputation of the Company or any of its affiliates, including but not limited
to, any officer, director, executive or shareholder of the Company or any of its
affiliates;

      

      (iii) Willful misconduct by the Employee
in respect of the duties or
obligations of the Employee under this Agreement, including, without limitation,
insubordination with respect to directions received by the Employee from the
Chief Executive Officer or the Board;

      

      (iv) The Employee’s conviction of any felony or a misdemeanor involving
moral turpitude (including entry of a nolo contendere plea);

      

      (v) The determination by the Company,
after a reasonable and good-faith investigation by the Company following an
allegation by an employee, contractor or customer of the Company, that the
Employee engaged in some form of harassment prohibited by law (including, without limitation, age, sex or
race discrimination);

      

      (vi) Any misappropriation or
embezzlement of the property of the Company or its affiliates (whether or not a
misdemeanor or felony);

      

      (vii) Breach by the Employee of any of
the provisions of Sections
5, 6 or 7 of this Agreement; or

      

      (viii) Breach by the Employee of any
provision of this Agreement other than those contained in Sections 5, 6 or 7
which is not cured by the Employee within thirty (30) days after notice thereof
is given to the Employee by
the Company.

      

      (b) The Employee’s employment hereunder may be
terminated by the Company due to the
Employee’s Disability. For purposes of this
Agreement, a termination for “Disability” shall occur (i) when the Company has
provided a written termination notice to the Employee supported by a
written statement from a reputable independent physician to the effect that the
Employee shall have become so physically or mentally incapacitated as to be
unable to resume, within the ensuing six (6) months, his employment hereunder by reason of physical
or mental illness or injury, or (ii) upon rendering of a written termination
notice by the Company after the Employee has been unable to substantially
perform his duties hereunder for 60 or more consecutive days, or more than 90 days in any consecutive
twelve month period, by reason of any physical or mental illness or injury. For
purposes of this Section 8(b), the Employee agrees to make himself available and
to cooperate in any reasonable examination by a reputable independent physician retained by the
Company.

      

      (c) The Employee’s employment hereunder may be terminated
by the Board upon the occurrence of a Change of Control. For purposes of this
Agreement, “Change of
Control” means, following the Commencement
Date:

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      

      (i) the acquisition by any Person
(including a group of Persons within the meaning of Section l3(d)(3) or l4(d)(2)
of the Exchange Act) of beneficial ownership of any capital stock of the
Company, if, after such acquisition, such Person beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) 50% or more of the combined voting
power of the then-outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company
Voting
Securities”); or

      

      (ii) the consummation of a merger,
consolidation, reorganization, recapitalization or share exchange involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company (a “Business
Combination”), unless, immediately following such
Business Combination, all or substantially all of the individuals and entities
who were the beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or indirectly, more than
50% of the combined voting power of the then-outstanding securities entitled to
vote generally in the election of directors of the resulting or acquiring
corporation in such Business Combination (which shall include, without limitation, a corporation which
as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
of the Outstanding Company
Voting Securities immediately prior to such Business
Combination.

      

      (d)       The Employee’s employment hereunder may be terminated
by the Employee with or without Good Reason. For purposes of this Agreement,
“Good
Reason” shall mean: (i) any reduction by the Company of the
Employee’s compensation or benefits payable
hereunder (it being understood that a reduction of benefits applicable to all
employees of the Company, including the Employee, shall not be deemed a
reduction of the Employee’s compensation package for purposes of this
definition), (ii) any relocation of the place of employment of the Employee more
than thirty (30) miles from the New York, New York city limits and more than sixty (60) miles from the
Employee’s address listed herein and located outside the state of New Jersey;
and (iii) any material adverse change in his title, duties or
responsibilities.

      

      (e)       The Employee’s employment may be terminated by the
Company for any reason or no reason.

      

      9. Compensation
upon Termination.

      

      (a)       If the Employee’s employment is terminated as a result
of his death or Disability, the Company shall pay to the Employee or to the
Employee’s estate, as applicable, his Base Salary
and any accrued but unpaid Annual Milestone Bonus and expense reimbursement
amounts through the date of
his death or Disability. All Restricted Shares and stock options held by the
Employee (the “Stock
Options”) that are scheduled to vest on the next
succeeding anniversary of the Commencement Date shall be accelerated and deemed
to have vested as of the
termination date. All Restricted Shares and Stock Options that have not vested
(or been deemed pursuant to the immediately preceding sentence to have vested)
as of the date of termination shall be forfeited to the Company as of such
date.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      

      (b)       If the Employee’s employment is terminated by the
Company for Cause or by the
Employee other than for Good Reason, then the Company shall pay to the Employee
his Base Salary and unreimbursed expenses through the date of his termination
and the Employee shall have no further entitlement to any other compensation or
benefits from the Company. All Restricted
Shares and Stock Options that have not vested as of the date of termination
shall be forfeited to the Company as of such date.

      

      (c)       If the
Employee’s
employment is terminated by the Company (or its successor) within thirty
(30) days prior to or sixty (60) days following the occurrence of a Change of
Control and on the date of termination pursuant to Section 8(c) the fair market
value of the Company’s
Common Stock, in the aggregate, as determined in good faith by the
Board
on the date of such Change of Control, is less than two (2) times the amount the
Company has raised in gross proceeds through the sale of Equity Securities, then
the Company (or its successor, as applicable) shall continue to pay to the
Employee his Base
Salary and benefits for a period of three (3) months following such termination
as well as any expense reimbursement amounts owed through the date of
termination, and, notwithstanding any provision of this Agreement to the
contrary, all non-competition and
non-solicitation obligations of the Employee under Section 6 of this Agreement
shall last for three (3) months. All Restricted Shares and Stock Options that
are scheduled to vest on the next succeeding anniversary of the Commencement
Date shall be accelerated
and deemed to have vested as of the termination date. All Restricted Shares and
Stock Options that have not vested (or been deemed pursuant to the immediately
preceding sentence to have vested) as of the date of termination shall be
forfeited to the
Company as of such date. As used herein, “Equity
Securities” shall
mean shares of Common Stock, preferred stock, options, warrants or other rights
to purchase Common Stock or securities or evidences of indebtedness convertible
into or exchangeable for shares
of Common Stock.

      

      (d)       If the Employee’s employment is terminated by the
Company other than as a result of the Employee’s death or Disability and other than for
reasons specified in Sections 9(b) or (c) (including, without limitation, any
termination as a result of
the Company’s nonrenewal of this Agreement), or by
the Employee for Good Reason, then the Company shall (i) continue to pay to the
Employee his Base Salary for a period of six (6) months following such
termination, (ii) pay the Employee any expense reimbursement amounts owed through
the date of termination, and (iii) all Restricted Shares and Stock Options that
are scheduled to vest during the Term shall be accelerated and deemed to
have vested as of the termination date. The Company’s obligation under clause (i) of this Section 9(d)
shall be subject to offset by any amounts otherwise received by the Employee
from any employment during the six (6) month period following the termination of
his employment.

      

      (e)       This Section 9 sets forth the only
obligations of the Company
with respect to the termination of the Employee’s employment with the Company, and the
Employee acknowledges that, upon the termination of his employment, he shall not
be entitled to any payments or benefits which are not expressly provided in Section
9.

      

      (f)       Notwithstanding anything in this
Agreement or any other agreement between the Employee and the Company to the
contrary, in the event that the Company determines that the provisions of Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”), relating to “excess parachute payments” (as defined in the Code) shall be
applicable to any payment or benefit received or to be received by Employee,
then the total amount of payments or benefits payable to
Employee shall be reduced
to the largest amount such that the provisions of Section 280G of the Code
relating to “excess parachute payments” shall no longer be applicable. Should
such a reduction be required, the Company shall determine which payment or
benefit to reduce or
eliminate.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      

      (g)       The provisions of this Section 9 shall
survive any termination of this Agreement.

      

      10.   Compliance
with Code Section 409A.

      

      (a)       If any payment, compensation or other
benefit provided to the Employee in connection with his employment termination is determined, in
whole or in part, to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of
the Code (“Section
409A”) and the Employee is a specified
employee as defined in Section 409A(2)(B)(i), no part of such payments shall be paid before
the day that is six (6) months plus one (1) day after the termination date (the
“New
Payment
Date”). The aggregate of any payments
that otherwise would have been paid to the Employee during the period between
the termination date and
the New Payment Date shall be paid to the Employee in a lump sum on such New
Payment Date. Thereafter, any payments that remain outstanding as of the day
immediately following the New Payment Date shall be paid without delay over the
time period originally scheduled, in
accordance with the terms of this Agreement.

      

      (b)       The parties acknowledge and agree that
the interpretation of Section 409A and its application to the terms of this
Agreement is uncertain and may be subject to change as additional guidance and
interpretations become available. Anything to the contrary herein notwithstanding, all benefits or
payments provided by the Company to the Employee that would be deemed to
constitute “nonqualified deferred
compensation” within the meaning of Section 409A are
intended to comply with Section 409A. If, however, any such benefit or payment is deemed to not
comply with Section 409A, the Company and the Employee agree to renegotiate in
good faith any such benefit or payment (including, without limitation, as to the
timing of any severance payments payable hereof) so that either (i) Section 409A will not apply
or (ii) compliance with Section 409A will be achieved; provided, however, that
any resulting renegotiated terms shall provide to the Employee the after-tax
economic equivalent of what otherwise has been provided to the Employee pursuant to the terms of
this Agreement, and provided further, that any deferral of payments or other
benefits shall be only for such time period as may be required to comply with
Section 409A.

      

      11.   Miscellaneous.

      

      (a)       This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, without giving effect to its
principles of conflicts of laws.

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      (b)       Any dispute arising out of, or relating
to, this Agreement or the breach thereof (other than Sections 5 or 6 hereof), or regarding
the interpretation thereof, shall be finally settled by arbitration conducted in New
York City in accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association then in effect before a
single arbitrator appointed in accordance with such rules. Judgment upon any
award rendered therein may be entered and enforcement obtained thereon in any
court having jurisdiction. The arbitrator shall have authority to grant any form of appropriate relief,
whether legal or equitable in nature, including specific performance. For the
purpose of any judicial proceeding to enforce such award or incidental to such
arbitration or to compel arbitration and for purposes of Sections 5 and 6 hereof, the parties
hereby submit to the exclusive jurisdiction of the Supreme Court of the State
of New York, New York County, or the United
States District Court for the Southern District of New York, and agree that service of process
in such arbitration or
court proceedings shall be satisfactorily
made upon it if sent by registered mail addressed to it at the address referred
to below in paragraph (i) of this Section 11 below. The costs of such arbitration
shall be borne proportionate to the finding of fault as determined by the
arbitrator. Judgment on the arbitration award may be entered by any court of
competent jurisdiction.

      

      (c)       This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective heirs,
legal representatives,
successors and permitted assigns.

      

      (d)       This Agreement, and the
Employee’s rights and obligations hereunder, may
not be assigned by the Employee. The Company may assign its rights, together
with its obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or
assets.

      

      (e)       This Agreement cannot be amended orally,
or by any course of conduct or dealing, but only by a written agreement signed
by the parties hereto.

      

      (f)       The failure of either party to insist upon the strict
performance of any of the terms, conditions and
provisions of this Agreement shall not be construed as a waiver or
relinquishment of future compliance therewith, and such terms, conditions and provisions shall remain in full force and effect.
No waiver of any term or condition of this Agreement on the
part of either party shall be effective for any purpose
whatsoever unless such waiver is in writing and signed by such
party.

      

      (g)       All notices, demands or other communications desired or
required to be given by any party to any other party hereto shall be in writing
and shall be deemed effectively given upon (i) personal delivery to the party to
be notified, (ii) upon confirmation of receipt of telecopy or other electronic facsimile transmission,
(iii) one business day after deposit with a reputable overnight courier, prepaid
for priority overnight delivery, or (iv) five days after deposit with the United
States Post Office, postage prepaid, in each case to such party at the address set forth on
the signature page hereto, or to such other addresses and to the attention of
such other individuals as any party shall have designated to the other
parties by notice given in the foregoing manner.

      

      (h)       This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation,
promise or inducement has been made by either
party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      (i)       As used in this Agreement, “affiliate” of a specified Person shall mean and
include any Person controlling, controlled by or under common control with the
specified Person.

      

      (j)       The section headings contained herein
are for reference purposes only and shall not in any way affect the meaning
or interpretation of this Agreement.

      

      (k)      This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, but all of
which together shall constitute one and the same instrument.

       

      (l)       As used in this Agreement, the
masculine, feminine or neuter gender, and the singular or plural, shall be
deemed to include the others whenever and wherever the context so requires.
Additionally, unless the context requires otherwise, “or” is not exclusive.

      

      [Remainder of Page Intentionally
Left Blank – Signature Page
Follows]

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      

      IN WITNESS WHEREOF,
the parties hereto have
executed this Agreement as of the date first above written.

      

      

      CORMEDIX INC.

      

       

      By: /s/ Bruce
Cooper, M.D.    

      Name: Bruce Cooper, M.D.

      Title: President and Chief Executive
Officer

      

      

      EMPLOYEE

      

      

      /s/ Mark Houser, M.D.        

      Mark Houser, M.D.

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