Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.3

AURIGA LABORATORIES, INC.

2007 Stock Option Plan

NOTICE OF STOCK OPTION GRANT

Grantee:

You have been granted an option to purchase Common Stock (“Common Stock”) of Auriga
Laboratories, Inc. (the “Company”) as follows:

	 	 	 
	Board Approval Date:
	 	 
	 
	 	 
	Date of Grant:
	 	 
	 
	 	 
	Vesting Commencement Date:
	 	 
	 
	 	 
	Exercise Price Per Share:
	 	 
	 
	 	 
	Total Number of Shares Granted:
	 	 
	 
	 	 
	Type of Option:

	 	NON-STATUTORY STOCK OPTION
	 
	 	 
	Term/Expiration Date:

	 	/2017
	 
	 	 
	Vesting Schedule:

	 	The shares subject to the Option shall
vest as follows: Twenty-five Percent
(25%) of the shares shall vest on the
Vesting Commencement Date; so long as you
remain in Continuous Service with the
Company, 1/24th of the total remaining
number of shares subject to the Option
shall vest each month thereafter.
	 
	 	 
	Termination Period:

	 	This Option may be exercised for three
months after termination of employment or
consulting relationship except as set out
in Sections 6 and 7 of the Stock Option
Agreement (but in no event later than the
Expiration Date).

By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the 2007 STOCK
OPTION PLAN and the Stock Option Agreement, both of which are attached and made a part of this
document.

	 	 	 	 	 
	GRANTEE	 	AURIGA LABORATORIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	Signature
	 	 	 	 
	 

	 	Name:
	 	Philip S. Pesin
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Print Name

	 	Title:
	 	Chief Executive Officer
	 

	 	 	 	 

 

 

 

AURIGA LABORATORIES, INC.

2007 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

1. Grant of Option. Auriga Laboratories, Inc., a Delaware corporation (the
“Company”), hereby grants to GRANTEE (“Optionee”) an option (the “Option”)
to purchase a total number of shares of Common Stock (the “Shares”) set forth in the Notice
of Stock Option Grant, at the exercise price per share set forth in the Notice of Stock Option
Grant (the “Exercise Price”) subject to the terms, definitions and provisions of the Auriga
Laboratories, Inc. 2007 Stock Option Plan (the “Plan”) adopted by the Company, which is
incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Option.

If designated an Incentive Stock Option, this Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Code.

2. Exercise of Option. This Option shall be exercisable during its Term in accordance
with the Vesting Schedule set out in the Notice of Stock Option Grant and with the provisions of
Sections 7 and 8 of the Plan as follows:

(a) Right to Exercise.

(i) This Option may be exercised in whole or in part at any time after the Date of Grant, as
to Shares which have not yet vested under the vesting schedule indicated on the Notice of Stock
Option Grant; provided, however, that Optionee shall execute as a condition to such exercise of
this Option, the Early Exercise Notice and Restricted Stock Purchase Agreement attached hereto as
Exhibit A (the “Early Exercise Agreement”). If Optionee chooses to exercise this
Option solely as to Shares which have vested under the vesting schedule indicated on the Notice of
Stock Option Grant, Optionee shall complete and execute the form of Exercise Notice and Restricted
Stock Purchase Agreement attached hereto as Exhibit B (the “Exercise Agreement”).
Notwithstanding the foregoing, the Company may in its discretion prescribe or accept a different
form of notice of exercise and/or stock purchase agreement if such forms are otherwise consistent
with this Agreement, the Plan and then-applicable law.

(ii) This Option may not be exercised for a fraction of a share.

(iii) In the event of Optionee’s death, disability or other termination of employment or
consulting relationship, the exercisability of the Option is governed by Sections 5, 6 and 7 below,
subject to the limitation contained in Section 2(a)(iv) below.

(iv) In no event may this Option be exercised after the Expiration Date of this Option as set
forth in the Notice of Stock Option Grant.

(b) Method of Exercise. This Option shall be exercisable by execution and delivery of
the Early Exercise Agreement or the Exercise Agreement, whichever is applicable, or of any other
written notice approved for such purpose by the Company which shall state the election to exercise
the Option, the number of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder’s investment intent with respect to such shares of
Common Stock as may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. Subject to Section 2(c) below, the written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon
receipt by the Company of such written notice accompanied by the Exercise Price.

No Shares will be issued pursuant to the exercise of an Option unless such issuance and such
exercise shall comply with all relevant provisions of applicable law, including the requirements of
any stock exchange upon which the Shares may then be listed. Assuming such compliance, for income
tax purposes the Shares shall be considered
transferred to Optionee on the date on which the Option is exercised with respect to such
Shares.

 

 

 

(c) Net Issue Exercise.

(i) In lieu of exercising this Option in the manner provided above in Section 2(b), the
Optionee may elect to receive shares equal to the value of this Option (or the portion thereof
being canceled) by surrender of this Option at the principal office of the Company together with
the Early Exercise Agreement or Exercise Agreement, as the case may be, duly executed by such
Optionee, in which event the Company shall issue to holder a number of shares of Common Stock
computed using the following formula:

X =           Y (A — B)

          A

	 	 	 
	Where

	 	X = The number of shares of Common Stock to be issued to the Optionee.
	 
	 	 
	 

	 	Y = The number of shares of Common Stock purchasable under this Option (at the date of such calculation).
	 
	 	 
	 

	 	A = The Fair Market Value of one share of Common Stock (at the date of such calculation).
	 
	 	 
	 

	 	B = The Purchase Price (as adjusted to the date of such calculation).

3. Method of Payment. Payment of the Exercise Price shall be by cash, check, or any
other form approved by the Company), or any other method permitted under the Plan; provided however
that the Administrator may refuse to allow Optionee to tender a particular form of payment (other
than cash or check) if, in the Administrator’s sole discretion, acceptance of such form of
consideration would not be in the best interests of the Company at such time.

4. Restrictions on Exercise. This Option may not be exercised until such time as the
Plan has been approved by the shareholders of the Company, or if the issuance of such Shares upon
such exercise or the method of payment of consideration for such shares would constitute a
violation of any applicable federal or state securities or other law or regulation, including any
rule under Part 207 of Title 12 of the Code of Federal Regulations as promulgated by the Federal
Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to
make any representation and warranty to the Company as may be required by any applicable law or
regulation.

5. Termination of Relationship. In the event of termination of Optionee’s Continuous
Status as an Employee or Consultant, Optionee may, to the extent otherwise so entitled at the date
of such termination (the “Termination Date”), exercise this Option during the Termination
Period set forth in the Notice of Stock Option Grant. To the extent that Optionee was not entitled
to exercise this Option at such Termination Date, or if Optionee does not exercise this Option
within the Termination Period, the Option shall terminate.

6. Disability of Optionee.

(a) Notwithstanding the provisions of Section 5 above, in the event of termination of
Optionee’s Continuous Status as an Employee or Consultant as a result of his or her total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only within
twelve months from the Termination Date (but in no event later than the Expiration Date set forth
in the Notice of Stock Option Grant and in Section 9 below), exercise this Option to the extent he
or she was entitled to exercise it at such Termination Date. To the extent that Optionee was not
entitled to exercise the Option on the Termination Date, or if Optionee does not exercise such
Option to the extent so entitled within the time specified in this Section 6(a), the Option shall
terminate.

(b) Notwithstanding the provisions of Section 5 above, in the event of termination of
Optionee’s consulting relationship or Continuous Status as an Employee as a result of a disability
not constituting a total and permanent disability (as set forth in Section 22(e)(3) of the Code),
Optionee may, but only within six months from the Termination Date (but in no event later than the
Expiration Date set forth in the Notice of Stock

 

2

 

Option Grant and in Section 9 below), exercise the Option to the extent Optionee was entitled
to exercise it as of such Termination Date; provided, however, that if this is an Incentive Stock
Option and Optionee fails to exercise this Incentive Stock Option within three months from the
Termination Date, this Option will cease to qualify as an Incentive Stock Option (as defined in
Section 422 of the Code) and Optionee will be treated for federal income tax purposes as having
received ordinary income at the time of such exercise in an amount generally measured by the
difference between the Exercise Price for the Shares and the Fair Market Value of the Shares on the
date of exercise. To the extent that Optionee was not entitled to exercise the Option at the
Termination Date, or if Optionee does not exercise such Option to the extent so entitled within the
time specified in this Section 6(b), the Option shall terminate.

7. Death of Optionee. In the event of the death of Optionee (a) during the Term of
this Option and while an Employee or Consultant of the Company and having been in Continuous Status
as an Employee or Consultant since the date of grant of the Option, or (b) within 30 days after
Optionee’s Termination Date, the Option may be exercised at any time within six months following
the date of death (but in no event later than the Expiration Date set forth in the Notice of Stock
Option Grant and in Section 9 below), by Optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the Termination Date.

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

9. Term of Option. This Option may be exercised only within the Term set forth in the
Notice of Stock Option Grant, subject to the limitations set forth in Section 6 of the Plan.

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

(a) Exercise of Incentive Stock Option. If this Option qualifies as an Incentive
Stock Option, there will be no regular federal or state income tax liability upon the exercise of
the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject Optionee to the alternative minimum tax in the year of
exercise.

(b) Exercise of Nonstatutory Stock Option. If this Option does not qualify as an
Incentive Stock Option, there may be a regular federal income tax liability and a state income tax
liability upon the exercise of the Option. Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair
market value of the Shares on the date of exercise over the Exercise Price. If Optionee is a
current or former employee, the Company may be required to withhold from Optionee’s compensation or
collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage
of this compensation income at the time of exercise.

(c) Disposition of Shares. In the case of a Nonstatutory Stock Option, if Shares are
held for more than one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal and state income tax purposes. In the case of an Incentive
Stock Option, if Shares transferred pursuant to the Option are held for more than one year after
exercise and are disposed of at least two years after the Date of Grant, any gain realized on
disposition of the Shares will also be treated as long-term capital gain for federal and state
income tax purposes. In either case, the long-term capital gain will be taxed for federal income
tax and alternative minimum tax purposes at a maximum rate of 20% if the Shares are held more than
one year after exercise. If Shares purchased under an Incentive Stock Option are disposed of
within one year after exercise or within two years after the Date of Grant, any gain realized on
such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the Exercise Price and the lesser of (i)
the Fair Market Value of the Shares on the date of exercise, or (ii) the sale price of the Shares.

 

3

 

(d) Notice of Disqualifying Disposition of Incentive Stock Option Shares. If the
Option granted to Optionee herein is an Incentive Stock Option, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the Incentive Stock Option on or before the
later of (i) the date two years after the Date of Grant, or (ii) the date one year after the date
of exercise, Optionee shall immediately notify the Company in writing of such disposition.
Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the
Company on the compensation income recognized by Optionee from the early disposition by payment in
cash or out of the current earnings paid to Optionee.

11. Withholding Tax Obligations.

(a) General Withholding Obligations. As a condition to the exercise of Option granted
hereunder, Optionee shall make such arrangements as the Administrator may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in
connection with the exercise, receipt or vesting of the Option. The Company shall not be required
to issue any Shares under the Plan until such obligations are satisfied. Optionee understands
that, upon exercising a Nonstatutory Stock Option, he or she will recognize income for tax purposes
in an amount equal to the excess of the then Fair Market Value of the Shares over the Exercise
Price. If Optionee is an employee, the Company will be required to withhold from Optionee’s
compensation, or collect from Optionee and pay to the applicable taxing authorities an amount equal
to a percentage of this compensation income. Additionally, Optionee may at some point be required
to satisfy tax withholding obligations with respect to the disqualifying disposition of an
Incentive Stock Option. Optionee shall satisfy his or her tax withholding obligation arising upon
the exercise of this Option by one or some combination of the following methods: (i) by cash or
check payment, (ii) out of Optionee’s current compensation, (iii) if permitted by the
Administrator, in its discretion, by surrendering to the Company Shares which (A) in the case of
Shares previously acquired from the Company, have been owned by Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value determined as of the applicable Tax Date
(as defined in Section 11(c) below) on the date of surrender equal to the amount required to be
withheld, or (iv) by electing to have the Company withhold from the Shares to be issued upon
exercise of the Option, or the Shares to be issued in connection with the Stock Purchase Right, if
any, that number of Shares having a Fair Market Value determined as of the applicable Tax Date
equal to the amount required to be withheld.

(b) Stock Withholding to Satisfy Withholding Tax Obligations. In the event the
Administrator allows Optionee to satisfy his or her tax withholding obligations as provided in
Section 11(a)(iii) or (iv) above, such satisfaction must comply with the requirements of this
Section (11)(b) and all applicable laws. All elections by Optionee to have Shares withheld to
satisfy tax withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:

(i) the election must be made on or prior to the applicable Tax Date (as defined in Section
11(c) below);

(ii) once made, the election shall be irrevocable as to the particular Shares of the Option as
to which the election is made; and

(iii) all elections shall be subject to the consent or disapproval of the Administrator.

In the event the election to have Shares withheld is made by Optionee and the Tax Date is
deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code,
Optionee shall receive the full number of Shares with respect to which the Option is exercised but
Optionee shall be unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date.

(c) Definitions. For purposes of this Section 11, the Fair Market Value of the Shares
to be withheld shall be determined on the date that the amount of tax to be withheld is to be
determined under the Applicable Laws (the “Tax Date”).

 

4

 

12. Market Standoff Agreement. In connection with the initial public offering of the
Company’s securities and upon request of the Company or the underwriters managing such underwritten
offering of the Company’s securities, Optionee agrees 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 may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company’s initial public offering.

[Signature Page Follows]

 

5

 

This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one document.

	 	 	 	 	 
	 	 	AURIGA LABORATORIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	Philip S. Pesin
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	Chief Executive Officer
	 

	 	 	 	 

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF IS
EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S STOCK OPTION PLAN
WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH
OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY
TIME, WITH OR WITHOUT CAUSE.

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

	 	 	 
	Dated: 
	 	 
	 

	 	 
	 

	 	Signature- 

 

6

 

EXHIBIT A

AURIGA LABORATORIES, INC.

2007 Stock Option Plan

EARLY EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“Agreement”) is made as of
 _____ 
, by and between
Auriga Laboratories, Inc., a Delaware corporation (the “Company”), and

 _____ 
(“Purchaser”). To the extent any capitalized terms used in this
Agreement are not defined, they shall have the meaning ascribed to them in the 2007 Stock Option
Plan.

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby
elects to exercise his or her option to purchase
 _____ 
shares of the Common Stock (the
“Shares”) of the Company under and pursuant to the Company’s 2007 Stock Option Plan (the
“Plan”) and the Stock Option Agreement dated
 _____ 
(the “Option
Agreement”). Of these Shares, Purchaser has elected to purchase
 _____ 
of those
Shares which have become vested as of the date hereof under the Vesting Schedule set forth in the
Notice of Stock Option Grant (the “Vested Shares”) and
 _____ 
Shares which have not
yet vested under such Vesting Schedule (the “Unvested Shares”). The purchase price for the
Shares shall be $  per Share for a total purchase price of $
 _____ 
, which
amount shall be paid for by a check in the amount of $
 _____ 
.. The term “Shares”
refers to the purchased Shares and all securities received in replacement of the Shares or as stock
dividends or splits, all securities received in replacement of the Shares in a recapitalization,
merger, reorganization, exchange or the like, and all new, substituted or additional securities or
other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this
Agreement shall occur at the principal office of the Company simultaneously with the execution and
delivery of this Agreement in accordance with the provisions of Section 2(b) of the Option
Agreement. On such date, the Company will deliver to Purchaser a certificate representing the
Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of
the purchase price therefor by Purchaser by (a) check made payable to the Company, (b) cancellation
of indebtedness of the Company to Purchaser, (c) delivery of shares of the Common Stock of the
Company in accordance with Section 3 of the Option Agreement, or (d) a combination of the
foregoing.

3. Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in
the Shares while the Shares are subject to the Company’s Repurchase Option (as defined below).
After any Shares have been released from such Repurchase Option, Purchaser shall not assign,
encumber or dispose of any interest in such Shares except in compliance with the provisions below
and applicable securities laws.

(a) Repurchase Option.

(i) In the event of the voluntary or involuntary termination of Purchaser’s employment or
consulting relationship with the Company for any reason (including death or disability), with or
without cause, the Company shall upon the date of such termination (the “Termination Date”)
have an irrevocable, exclusive option (the “Repurchase Option”) for a period of 90 days
from such date to repurchase all or any portion of the Shares held by Purchaser as of the
Termination Date which have not yet been released from the Company’s Repurchase Option at the
original purchase price per Share specified in Section 1 (adjusted for any stock splits, stock
dividends and the like).

(ii) Unless the Company notifies Purchaser within 90 days from the date of termination of
Purchaser’s employment or consulting relationship that it does not intend to exercise its
Repurchase Option with respect to some or all of the Shares, the Repurchase Option shall be deemed
automatically exercised by the Company as of the 90th day following such termination, provided that
the Company may notify Purchaser that it is exercising its Repurchase Option as of a date prior to
such 90th day. Unless Purchaser is otherwise notified by the

 

A-1

 

Company pursuant to the preceding sentence that the Company does not intend to exercise its
Repurchase Option as to some or all of the Shares to which it applies at the time of termination,
execution of this Agreement by Purchaser constitutes written notice to Purchaser of the Company’s
intention to exercise its Repurchase Option with respect to all Shares to which such Repurchase
Option applies. The Company, at its choice, may satisfy its payment obligation to Purchaser with
respect to exercise of the Repurchase Option by either (A) delivering a check to Purchaser in the
amount of the purchase price for the Shares being repurchased, or (B) in the event Purchaser is
indebted to the Company, canceling an amount of such indebtedness equal to the purchase price for
the Shares being repurchased, or (C) by a combination of (A) and (B) so that the combined payment
and cancellation of indebtedness equals such purchase price. In the event of any deemed automatic
exercise of the Repurchase Option pursuant to this Section 3(a)(ii) in which Purchaser is indebted
to the Company, such indebtedness equal to the purchase price of the Shares being repurchased shall
be deemed automatically canceled as of the 90th day following termination of Purchaser’s employment
or consulting relationship unless the Company otherwise satisfies its payment obligations. As a
result of any repurchase of Shares pursuant to this Section 3(a), the Company shall become the
legal and beneficial owner of the Shares being repurchased and shall have all rights and interest
therein or related thereto, and the Company shall have the right to transfer to its own name the
number of Shares being repurchased by the Company, without further action by Purchaser.

(iii) One hundred percent (100%) of the Shares shall initially be subject to the Repurchase
Option. The Unvested Shares shall be released from the Repurchase Option in accordance with the
Vesting Schedule set forth in the Notice of Stock Option Grant until all Shares are released from
the Repurchase Option. Fractional shares shall be rounded to the nearest whole share.

(b) Right of First Refusal. Before any Shares held by Purchaser or any transferee of
Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including transfer by gift or operation of law), the Company or its
assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions
set forth in this Section 3(b) (the “Right of First Refusal”).

(i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to
sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other
transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each
Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The
Holder shall offer the Shares at the same price (the “Offered Price”) and upon the same
terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

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

(iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares
purchased by the Company or its assignee(s) under this Section 3(b) shall be the Offered Price. If
the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

(iv) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an
assignee, to the assignee), by net exercise pursuant to Section 2(c) of the Option Agreement, or by
any combination thereof within 30 days after receipt of the Notice or in the manner and at the
times set forth in the Notice.

(v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section 3(b), then the Holder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within 60 days after the date of the Notice and provided further that
any such sale or other transfer is effected in accordance with any applicable securities laws and
the Proposed Transferee agrees in writing that the provisions of this Section 3 shall

 

A-2

 

continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares
described in the Notice are not transferred to the Proposed Transferee within such period, or if
the Holder proposes to change the price or other terms to make them more favorable to the Proposed
Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall
again be offered the Right of First Refusal before any Shares held by the Holder may be sold or
otherwise transferred.

(vi) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section 3(b) notwithstanding, the transfer of any or all of the Shares during Purchaser’s
lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family (as defined
below) or a trust for the benefit of Purchaser’s Immediate Family shall be exempt from the
provisions of this Section 3(b). “Immediate Family” as used herein shall mean spouse,
lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee
or other recipient shall receive and hold the Shares so transferred subject to the provisions of
this Section, and there shall be no further transfer of such Shares except in accordance with the
terms of this Section 3.

(c) Involuntary Transfer.

(i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time
after the date of this Agreement, of any transfer by operation of law or other involuntary transfer
(including divorce or death, but excluding, in the event of death, a transfer to Immediate Family
as set forth in Section 3(b)(vi) above) of all or a portion of the Shares by the record holder
thereof, the Company shall have the right to purchase all of the Shares transferred at the greater
of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value of the
Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall
promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares
shall be provided to the Company for a period of 30 days following receipt by the Company of
written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer. With respect to any stock to be transferred
pursuant to Section 3(c)(i), the price per Share shall be a price set by the Board of Directors of
the Company that will reflect the current value of the stock in terms of present earnings and
future prospects of the Company. The Company shall notify Purchaser or his or her executor of the
price so determined within 30 days after receipt by it of written notice of the transfer or
proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as
determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the
valuation determined by an independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

(d) Assignment. The right of the Company to purchase any part of the Shares may be
assigned in whole or in part to any shareholder or shareholders of the Company or other persons or
organizations.

(e) Restrictions Binding on Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interest subject to the provisions of this Agreement,
including, insofar as applicable, the Repurchase Option. In the event of any purchase by the
Company hereunder where the Shares or interest are held by a transferee, the transferee shall be
obligated, if requested by the Company, to transfer the Shares or interest to the Purchaser for
consideration equal to the amount to be paid by the Company hereunder. In the event the Repurchase
Option is deemed exercised by the Company pursuant to Section 3(a)(ii) hereof, the Company may deem
any transferee to have transferred the Shares or interest to Purchaser prior to their purchase by
the Company, and payment of the purchase price by the Company to such transferee shall be deemed to
satisfy Purchaser’s obligation to pay such transferee for such Shares or interest, and also to
satisfy the Company’s obligation to pay Purchaser for such Shares or interest. Any sale or
transfer of the Shares shall be void unless the provisions of this Agreement are satisfied.

(f) Termination of Rights. The Right of First Refusal and the Company’s right to
repurchase the Shares in the event of an involuntary transfer pursuant to Section 3(c) above shall
terminate upon the listing of Common Stock of the Company on a national exchange.

 

A-3

 

(g) Market Standoff Agreement. In connection with the initial public offering of the
Company’s securities and upon request of the Company or the underwriters managing such underwritten
offering of the Company’s securities, Purchaser agrees 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 may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company’s initial public offering.

4. Escrow of Unvested Shares. For purposes of facilitating the enforcement of the
provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the certificate(s) for
the Shares subject to the Repurchase Option, to deliver such certificate(s), together with an
Assignment Separate from Certificate in the form attached to this Agreement as Attachment A
executed by Purchaser and by Purchaser’s spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary’s designee, to hold such certificate(s) and Assignment
Separate from Certificate in escrow and to take all such actions and to effectuate all such
transfers and/or releases as are in accordance with the terms of this Agreement. Purchaser hereby
acknowledges that the Secretary of the Company, or the Secretary’s designee, is so appointed as the
escrow holder with the foregoing authorities as a material inducement to make this Agreement and
that said appointment is coupled with an interest and is accordingly irrevocable. Purchaser agrees
that said escrow holder shall not be liable to any party hereof (or to any other party). The
escrow holder may rely upon any letter, notice or other document executed by any signature
purported to be genuine and may resign at any time. Purchaser agrees that if the Secretary of the
Company, or the Secretary’s designee, resigns as escrow holder for any or no reason, the Board of
Directors of the Company shall have the power to appoint a successor to serve as escrow holder
pursuant to the terms of this Agreement.

5. Investment and Taxation Representations. In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Shares. Purchaser is purchasing the Shares for investment for his or her own
account only and not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act. Purchaser does not have any present intention to
transfer the Shares to any other person or entity.

(b) Purchaser understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption therefrom, which exemption depends upon, among other things, the
bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser understands that the Shares are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, Purchaser must hold the Shares
indefinitely unless they are registered with the Securities and Exchange Commission and qualified
by state authorities, or an exemption from such registration and qualification requirements is
available. Purchaser acknowledges that the Company has no obligation to register or qualify the
Shares for resale. Purchaser further acknowledges that if an exemption from registration or
qualification is available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and requirements
relating to the Company which are outside of the Purchaser’s control, and which the Company is
under no obligation and may not be able to satisfy.

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

6. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. The certificate or certificates representing the Shares shall bear the
following legends (as well as any legends required by applicable state and federal corporate and
securities laws):

 

A-4

 

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

(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.

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

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

(d) Removal of Legend. When all of the following events have occurred, the Shares
then held by Purchaser will no longer be subject to the legend referred to in Section 6(a)(ii):
(i) the termination of the Right of First Refusal; (ii) the expiration or termination of the market
standoff provisions of Section 3(g) (and of any agreement entered pursuant to Section 3(g)); and
(iii) the expiration or exercise in full of the Repurchase Option. After such time, and upon
Purchaser’s request, a new certificate or certificates representing the Shares not repurchased
shall be issued without the legend referred to in Section 6(a)(ii), and delivered to Purchaser.

7. No Employment Rights. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a Parent or Subsidiary of the Company, to
terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

8. Section 83(b) Election. Purchaser understands that Section 83(a) of the Internal
Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income for a Nonstatutory
Stock Option and as alternative minimum taxable income for an Incentive Stock Option the difference
between the amount paid for the Shares and the Fair Market Value of the Shares as of the date any
restrictions on the Shares lapse. In this context, “restriction” means the right of the
Company to buy back the Shares pursuant to the Repurchase Option set forth in Section 3(a) of this
Agreement. Purchaser understands that Purchaser may elect to be taxed at the time the Shares are
purchased, rather than when and as the Repurchase Option expires, by filing an election under
Section 83(b) (an “83(b) Election”) of the Code with the Internal Revenue Service within 30
days from the date of purchase. Even if the Fair Market Value of the Shares at the time of the
execution of this Agreement equals the amount paid for the Shares, the election must be made to
avoid income and alternative minimum tax treatment under Section 83(a) in the future. Purchaser
understands that failure to file such an election in a timely manner may result in adverse tax
consequences for Purchaser. Purchaser further understands that an additional copy of such election
form should be filed with his or her federal income tax return for the calendar year in which the
date of this Agreement falls. Purchaser acknowledges that the foregoing is only a summary of the
effect of United States federal income taxation with respect to purchase of the Shares hereunder,
and does not purport to be complete. Purchaser further acknowledges that the Company has directed
Purchaser to seek independent advice regarding the applicable provisions of the Code, the income
tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax
consequences of Purchaser’s death.

Purchaser agrees that he or she will execute and deliver to the Company with this executed
Agreement a copy of the Acknowledgment and Statement of Decision Regarding Section 83(b) Election
(the “Acknowledgment”) attached hereto as Attachment B. Purchaser further agrees
that he or she will execute and submit with the Acknowledgment a copy of the 83(b) Election
attached hereto as Attachment C (for tax purposes in connection with
the early exercise of an option) if Purchaser has indicated in the Acknowledgment his or her
decision to make such an election.

 

A-5

 

9. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Georgia, without giving effect to principles of conflicts
of law.

(b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.

(d) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

(e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax or 48 hours
after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and
addressed to the party to be notified at such party’s address as set forth below or as subsequently
modified by written notice.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns. The rights and benefits of this Agreement shall inure to
the benefit of, and be enforceable by the Company’s successors and assigns. The rights and
obligations of Purchaser under this Agreement may only be assigned with the prior written consent
of the Company.

(h) Georgia Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE
OF GEORGIA, OR ANY OTHER STATE, AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

(i) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE DEPARTMENT OF CORPORATIONS OF THE STATE
OF CALIFORNIA, OR ANY OTHER STATE, AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

 

A-6

 

The parties have executed this Agreement as of the date first set forth above.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	AURIGA LABORATORIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	2029 Century Park East, Suite 1130
	 

	 	 	 	Los Angeles, CA 90067
	 
	 	 	 	 
	 	 	PURCHASER:
	 
	 	 	 	 
	 	 	 
	 	 	Signature
	 
	 	 	 	 
	 	 	 
	 	 	Print Name
	 
	 	 	 	 
	 	 	 
	 	 	Address
	 
	 	 	 	 
	 	 	 
	 	 	Address

 

A-7

 

ATTACHMENT A

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED and pursuant to that certain Early Exercise Notice and Restricted Stock
Purchase Agreement between the undersigned (“Purchaser”) and Auriga Laboratories, Inc. (the
“Company”) dated
 _____ 
,
 _____ 
(the “Agreement”), Purchaser hereby sells,
assigns and transfers unto the Company
 _____ 
(
 _____ 
) shares of the Common
Stock of the Company, standing in Purchaser’s name on the books of the Company and represented by
Certificate No.
 _____ 
, and does hereby irrevocably constitute and appoint

 _____ 
to transfer said stock on the books of the Company with full power of
substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND
THE ATTACHMENTS THERETO.

Dated:                                         

	 	 	 
	 

	 	Signature:
	 
	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	 

	 	 
	 

	 	Print Name

Instruction: Please do not fill in any blanks other than the signature line. The purpose
of this assignment is to enable the Company to exercise its Repurchase Option set forth in the
Agreement without requiring additional signatures on the part of Purchaser.

 

A-A-1

 

ATTACHMENT B

ACKNOWLEDGMENT AND STATEMENT OF DECISION

REGARDING SECTION 83(b) ELECTION

The undersigned (which term includes the undersigned’s spouse), a purchaser of
 _____ 

shares of Common Stock of Auriga Laboratories, Inc., a Delaware corporation (the “Company”)
by exercise of an option (the “Option”) granted pursuant to the Company’s 2007 Stock Option
Plan (the “Plan”), hereby states as follows:

1. The undersigned acknowledges receipt of a copy of the Plan relating to the offering of such
shares. The undersigned has carefully reviewed the Plan and the option agreement pursuant to which
the Option was granted.

2. The undersigned either [check and complete as applicable]:

	 	 	 	 	 
	(a)

	 	                    
	 	has consulted, and has been fully advised by, the
undersigned’s own tax advisor,
 _____ 
, whose business
address is
 _____ 
, regarding the federal, state and local tax
consequences of purchasing shares under the Plan, and particularly regarding
the advisability of making elections pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended (the “Code”) and pursuant to the
corresponding provisions, if any, of applicable state law; or
	 
	 	 	 	 
	(b)

	 	                    
	 	has knowingly chosen not to consult such a tax advisor.

3. The undersigned hereby states that the undersigned has decided [check as applicable]:

	 	 	 	 	 
	(a)

	 	                    
	 	to make an election pursuant to Section 83(b) of the Code,
and is submitting to the Company, together with the undersigned’s executed
Early Exercise Notice and Restricted Stock Purchase Agreement, an executed
form entitled “Election Under Section 83(b) of the Internal Revenue Code of
1986;” or
	 
	 	 	 	 
	(b)

	 	                    
	 	not to make an election pursuant to Section 83(b) of the
Code.

4. Neither the Company nor any subsidiary or representative of the Company has made any
warranty or representation to the undersigned with respect to the tax consequences of the
undersigned’s purchase of shares under the Plan or of the making or failure to make an election
pursuant to Section 83(b) of the Code or the corresponding provisions, if any, of applicable state
law.

	 	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

 

A-B-1

 

ATTACHMENT C

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue
Code, to include in taxpayer’s gross income or alternative minimum taxable income, as applicable,
for the current taxable year, the amount of any income that may be taxable to taxpayer in
connection with taxpayer’s receipt of the property described below:

1. The name, address, taxpayer identification number and taxable year of the undersigned are
as follows:

	 	 	 	 	 
	NAME OF TAXPAYER:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	ADDRESS:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	IDENTIFICATION NO. OF TAXPAYER:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	TAXABLE YEAR:

	 	 	 	 
	 

	 	 	 	 

2. The property with respect to which the election is made is described as follows:

 _____ 
shares of the Common Stock of Auriga Laboratories, Inc., a
Delaware corporation (the “Company”).

3. The date on which the property was transferred is:
____________________

4. The property is subject to the following restrictions:

Repurchase option at cost in favor of the Company upon termination of taxpayer’s
employment or consulting relationship.

5. The fair market value at the time of transfer, determined without regard to any restriction
other than a restriction which by its terms will never lapse, of such property is:
$____________________

The amount (if any) paid for such property: $____________________

The undersigned has submitted a copy of this statement to the person for whom the services were
performed in connection with the undersigned’s receipt of the above-described property. The
transferee of such property is the person performing the services in connection with the transfer
of said property.

The undersigned understands that the foregoing election may not be revoked except with the consent
of the Commissioner.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature

 

A-C-1

 

RECEIPT AND CONSENT

The undersigned hereby acknowledges receipt of a photocopy of Certificate No.
 _____ 
for

 _____ 
shares of Common Stock of Auriga Laboratories, Inc. (the “Company”).

The undersigned further acknowledges that the Secretary of the Company, or his or her
designee, is acting as escrow holder pursuant to the Early Exercise Notice and Restricted Stock
Purchase Agreement Purchaser has previously entered into with the Company. As escrow holder, the
Secretary of the Company, or his or her designee, holds the original of the aforementioned
certificate issued in the undersigned’s name.

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Name:

 

 

 

EXHIBIT B

AURIGA LABORATORIES, INC.

2007 Stock Option Plan

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“Agreement”) is made as of
 _____ 
, by and between Auriga
Laboratories, Inc., a Delaware corporation (the “Company”), and
 _____ 

(“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined,
they shall have the meaning ascribed to them in the 2007 Stock Option Plan.

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby
elects to exercise his or her option to purchase
 _____ 
shares of the Common Stock (the
“Shares”) of the Company under and pursuant to the Company’s 2007 Stock Option Plan (the
“Plan”) and the Stock Option Agreement dated
 _____ 
, (the “Option
Agreement”). The purchase price for the Shares shall be $  per Share for a total
purchase price of $
 _____ 
.. The term “Shares” refers to the purchased Shares and
all securities received in replacement of the Shares or as stock dividends or splits, all
securities received in replacement of the Shares in a recapitalization, merger, reorganization,
exchange or the like, and all new, substituted or additional securities or other properties to
which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this
Agreement shall occur at the principal office of the Company simultaneously with the execution and
delivery of this Agreement in accordance with the provisions of Section 2(b) of the Option
Agreement. On such date, the Company will deliver to Purchaser a certificate representing the
Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of
the purchase price therefor by Purchaser by (a) check made payable to the Company, (b) cancellation
of indebtedness of the Company to Purchaser, (c) delivery of shares of the Common Stock of the
Company in accordance with Section 3 of the Option Agreement, or (d) a combination of the
foregoing.

3. Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in
the Shares except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal. Before any Shares held by Purchaser or any transferee of
Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including transfer by gift or operation of law), the Company or its
assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions
set forth in this Section 3(a) (the “Right of First Refusal”).

(i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to
sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other
transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each
Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The
Holder shall offer the Shares at the same price (the “Offered Price”) and upon the same
terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

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

(iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares
purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If
the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

 

B-1

 

(iv) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an
assignee, to the assignee), by net exercise pursuant to Section 2(c) of the Option Agreement, or by
any combination thereof within 30 days after receipt of the Notice or in the manner and at the
times set forth in the Notice.

(v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within 60 days after the date of the Notice and provided further that
any such sale or other transfer is effected in accordance with any applicable securities laws and
the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to
apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes
to change the price or other terms to make them more favorable to the Proposed Transferee, a new
Notice shall be given to the Company, and the Company and/or its assignees shall again be offered
the Right of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

(vi) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s
lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family (as defined
below) or a trust for the benefit of Purchaser’s Immediate Family shall be exempt from the
provisions of this Section 3(a). “Immediate Family” as used herein shall mean spouse,
lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee
or other recipient shall receive and hold the Shares so transferred subject to the provisions of
this Section, and there shall be no further transfer of such Shares except in accordance with the
terms of this Section 3.

(b) Involuntary Transfer.

(i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time
after the date of this Agreement, of any transfer by operation of law or other involuntary transfer
(including divorce or death, but excluding, in the event of death, a transfer to Immediate Family
as set forth in Section 3(a)(vi) above) of all or a portion of the Shares by the record holder
thereof, the Company shall have the right to purchase all of the Shares transferred at the greater
of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value of the
Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall
promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares
shall be provided to the Company for a period of 30 days following receipt by the Company of
written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer. With respect to any stock to be transferred
pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of
the Company that will reflect the current value of the stock in terms of present earnings and
future prospects of the Company. The Company shall notify Purchaser or his or her executor of the
price so determined within 30 days after receipt by it of written notice of the transfer or
proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as
determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the
valuation determined by an independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

(c) Assignment. The right of the Company to purchase any part of the Shares may be
assigned in whole or in part to any shareholder or shareholders of the Company or other persons or
organizations.

(d) Restrictions Binding on Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interest subject to the provisions of this Agreement.
Any sale or transfer of the Shares shall be void unless the provisions of this Agreement are
satisfied.

 

B-2

 

(e) Termination of Rights. The Right of First Refusal and the Company’s right to
repurchase the Shares in the event of an involuntary transfer pursuant to Section 3(b) above shall
terminate upon the listing of Common Stock of the Company on a national exchange.

(f) Market Standoff Agreement. In connection with the initial public offering of the
Company’s securities and upon request of the Company or the underwriters managing such underwritten
offering of the Company’s securities, Purchaser agrees 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 may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company’s initial public offering.

4. Investment and Taxation Representations. In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

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

(b) Purchaser understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption therefrom, which exemption depends upon, among other things, the
bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser understands that the Shares are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, Purchaser must hold the Shares
indefinitely unless they are registered with the Securities and Exchange Commission and qualified
by state authorities, or an exemption from such registration and qualification requirements is
available. Purchaser acknowledges that the Company has no obligation to register or qualify the
Shares for resale. Purchaser further acknowledges that if an exemption from registration or
qualification is available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Shares, and requirements
relating to the Company which are outside of the Purchaser’s control, and which the Company is
under no obligation and may not be able to satisfy.

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

5. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. The certificate or certificates representing the Shares shall bear the
following legends (as well as any legends required by applicable state and federal corporate and
securities laws):

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

(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY.

 

B-3

 

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

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

(d) Removal of Legend. When all of the following events have occurred, the Shares
then held by Purchaser will no longer be subject to the legend referred to in Section 5(a)(ii):
(i) the termination of the Right of First Refusal; and (ii) the expiration or termination of the
market standoff provisions of Section 3(f) (and of any agreement entered pursuant to Section 3(f)).
After such time, and upon Purchaser’s request, a new certificate or certificates representing the
Shares not repurchased shall be issued without the legend referred to in Section 5(a)(ii), and
delivered to Purchaser.

6. No Employment Rights. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a Parent or Subsidiary of the Company, to
terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

7. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Georgia, without giving effect to principles of conflicts
of law.

(b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.

(d) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

(e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax or 48 hours
after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and
addressed to the party to be notified at such party’s address as set forth below or as subsequently
modified by written notice.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns. The rights and benefits of this Agreement shall inure to
the benefit of, and be enforceable by the Company’s successors and assigns. The rights and
obligations of Purchaser under this Agreement may only be assigned with the prior written consent
of the Company.

 

B-4

 

(h) Georgia Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE
OF GEORGIA, OR ANY OTHER STATE, AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

(i) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE DEPARTMENT OF CORPORATIONS OF THE STATE
OF CALIFORNIA, OR ANY OTHER STATE, AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

 

B-5

 

The parties have executed this Agreement as of the date first set forth above.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	AURIGA LABORATORIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	2029 Century Park East, Suite 1130
	 

	 	 	 	Los Angeles, CA 90067
	 
	 	 	 	 
	 	 	PURCHASER:
	 
	 	 	 	 
	 	 	 
	 	 	Signature
	 
	 	 	 	 
	 	 	 
	 	 	Print Name
	 
	 	 	 	 
	 	 	 
	 	 	Address
	 
	 	 	 	 
	 	 	 
	 	 	Address

 

B-6

 

RECEIPT

Auriga Laboratories, Inc. (the “Company”) hereby acknowledges receipt of (check as applicable):

	 	 	 
	                    

	 	A check in the amount of $
 _________ 

	 
	 	 
	                    

	 	The cancellation of indebtedness in the amount of $
 _________ 

	 
	 	 
	                    

	 	
 _________ 
shares of (or cancellation of the right to exercise)
the Company’s Common Stock with a fair market value of $
 _________ 

given by
 _______________ 
as consideration for Certificate No.
 _________ 
for
 _______________ 
shares of Common
Stock of the Company.

Dated:                                         

	 	 	 	 	 
	 	AURIGA LABORATORIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:Filed by Bowne Pure Compliance

 

Exhibit 10.4

	 	 	 
	 

	 	Auriga Laboratories, Inc.
	 

	 	2029 Century Park East, Suite 1130
	 

	 	Los Angeles, CA 90067

June 22, 2007

Mr. Thomas Heck

3700 Regency Parkway

Cary, NC 27518

Dear Mr. Heck:

It is with great pleasure that I welcome you (“You” or “Director”) to the Board of Directors
(“Board”) of Auriga Laboratories, Inc. (“Auriga” or the “Company”) effective June 26, 2007 (the
“Effective Date”). This letter agreement contains the terms and conditions of your directorship.

1. Term.

(a) This Agreement shall continue for as long as Director is a member of the Board of
Directors of Company.

(b) Notwithstanding the foregoing and provided that Director has not resigned, Company agrees
to use its best efforts to re-elect Director to the Board.

2. Position and Responsibilities.

(a) Position. Company hereby retains Director to serve as a member of the Board.
Director shall perform such duties and responsibilities as are normally related to such position
in accordance with Company’s bylaws, any committee charters and applicable law, including those
services described on Exhibit A (the “Services”), and Director hereby agrees to use his
best efforts to provide the Services. Director shall not allow any other person or entity to
perform any of the Services for or instead of Director. Director shall comply with the statutes,
rules, regulations and orders of any governmental or quasi-governmental authority, which are
applicable to the performance of the Services, and Company’s rules, regulations, and practices as
they may from time-to-time be adopted or modified.

(b) Other Activities. Director may be employed by another company, may serve on other Boards
of Directors or Advisory Boards, and may engage in any other business activity (whether or not
pursued for pecuniary advantage), as long as such outside activities do not violate Director’s
obligations under this Agreement or Director’s fiduciary
obligations to the shareholders of Company. Director
represents that, to the best of his knowledge, Director has no outstanding agreement or obligation
that is in conflict with any of the provisions of this Agreement, and Director agrees to use his
best efforts to avoid or minimize any such conflict and agrees not to enter into any agreement or
obligation that could create such a conflict, without the approval of
the Chief Executive Officer of Company
or a majority of the Board. If, at any time, Director is required to make any
disclosure or take any action that may conflict with any of the provisions of this Agreement,
Director will promptly notify the Chief Executive Officer or the Board of such obligation, prior to
making such disclosure or taking such action.

 

 

 

(c) No Conflict. Director will not engage in any activity that creates an actual conflict of
interest with Company, regardless of whether such activity is prohibited by Company’s conflict of
interest guidelines or this Agreement, and Director agrees to notify the Board before
engaging in any activity that creates a potential conflict of interest with Company. Specifically,
Director shall not engage in any activity that is in direct competition with the Company or serve
in any capacity (including, but not limited to, as an employee, consultant, advisor or director) in
any company or entity that competes directly with the Company, as reasonably determined by a
majority of the Board; provided; however, the Parties acknowledge
that the Director is a current employee of Victory Pharma, Inc. (“Victory”) and that Victory may from time to time
manufacture or market products that compete or may potentially compete with the Company’s products
(“Competing Products”). To the extent that the Board of the Company acts upon matters that may
relate to the Competing Products, the Board may request that Director abstain from voting or
discussing such matters, and Director will comply with such request.

3. Compensation and Benefits.

(a) Director’s Fee. In consideration of the services to be rendered under this Agreement,
Company shall pay Director a fee at the rate of Two Thousand Five Hundred Dollars ($2,500) per
month, which shall be paid in accordance with Company’s regularly established practices regarding
the payment of Directors’ fees.

(b) Equity. During the term of this Agreement, You may be granted equity rights, as determined
by Company’s Compensation Committee or the Board, in its sole discretion.

In addition, subject to approval of the Company’s Compensation Committee and Board, you shall
be granted, an option to purchase up to One Hundred Fifty Thousand (150,000) shares of the
Company’s common stock. The initial 25% of the shares shall vest on the Effective Date with the
remaining shares vesting 4,687 shares per month so long as you are a Director for the Company.

(c) Expenses. The Company shall reimburse Director for all reasonable business expenses
incurred in the performance of his duties hereunder in accordance with Company’s expense
reimbursement guidelines.

(d) Indemnification. Company will indemnify and defend Director against any liability
incurred in the performance of the Services to the fullest extent authorized in Company’s
Certificate of Incorporation, as amended, bylaws, as amended, and applicable law, as described in
the indemnification agreement attached hereto as Exhibit B. Company currently has
Director’s and Officer’s liability insurance, and Director shall be entitled to the protection of
any insurance policies the Company maintains for the benefit of its Directors and Officers against
all costs, charges and expenses in connection with any action, suit or proceeding to which he may
be made a party by reason of his affiliation with Company, its subsidiaries, or affiliates.

(e) Records. Director shall have reasonable access to books and records of Company, as
necessary to enable Director to fulfill his obligations as a Director of Company.

 

 

 

4. Termination.

(a) Right to Terminate. At any time, Director may be removed as a Director as provided in
Company’s Certificate of Incorporation, as amended, bylaws, as amended, and applicable law.
Director may resign his directorship as provided in Company’s Certificate of Incorporation, as
amended, bylaws, as amended, and in accordance with applicable law. Notwithstanding anything to the
contrary contained in or arising from this Agreement or any statements, policies, or practices of
Company, neither Director nor Company shall be required to provide any advance notice or any reason
or cause for termination of Director, except as provided in Company’s Certificate of Incorporation,
as amended, Company’s bylaws, as amended, and applicable law.

(b) Effect of Termination as Director. Upon a termination of Director’s status as a Director,
this Agreement will terminate; Company shall pay to Director all compensation and benefits to which
Director is entitled up through the date of termination. Thereafter, all of Company’s obligations
under this Agreement shall cease.

5. Nondisclosure Obligations. Director shall maintain in confidence and shall not, directly
or indirectly, disclose or use, either during or after the term of this Agreement, any Proprietary
Information (as defined below), confidential information, or trade secrets belonging to Company,
whether or not it is in written or permanent form, except to the extent necessary to perform the
Services, as required by a lawful government order or subpoena, or as authorized in writing by
Company. These nondisclosure obligations also apply to Proprietary Information belonging to
customers and suppliers of Company, and other third parties, learned by Director as a result of
performing the Services. “Proprietary Information” means all information pertaining in any manner
to the business of Company, unless (i) the information is or becomes publicly known through lawful
means; (ii) the information was part of Director’s general knowledge prior to his relationship with
Company; or (iii) the information is disclosed to Director without restriction by a third party who
rightfully possesses the information and did not learn of it from Company.

6. This
letter, and the attachments hereto, set forth the entire agreement between You and the
Company regarding the terms of your directorship with the Company. Any modification to this
agreement shall be in writing, signed by You and a duly authorized officer of the Company or a
member of the Board. This agreement shall be construed and interpreted in accordance with the laws
of the state of Delaware.

Welcome to Auriga Laboratories, Inc.!

Sincerely,

	 	 	 
	 

Philip S. Pesin

	 	 
	Chairman & Chief Executive Officer
	 	 

	 	 	 	 	 	 	 
	Accepted by:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Mr. Thomas Heck	 	 	 	 

 

 

 

EXHIBIT A

DESCRIPTION OF SERVICES

Responsibilities as Director. Director shall have all responsibilities of a Director of the
Company imposed by Delaware or applicable law, the Certificate of Incorporation, as amended, and
Bylaws, as amended, the Code of Business Conduct and Ethics of Company. These responsibilities
shall include, but shall not be limited to, the following:

	 	1.	 	Attendance. Use best efforts to attend scheduled meetings of Company’s
Board of Directors

	 
	 	2.	 	Act as a Fiduciary. Represent the shareholders and the interests of Company
as a fiduciary;

	 
	 	3.	 	Participation. Participate as a full voting member of Company’s Board of
Directors in setting overall objectives, approving plans and programs of operation,
formulating general policies, offering advice and counsel, serving on Board
Committees, as required, and reviewing management performance.

 

 

 

EXHIBIT B

INDEMNIFICATION AGREEMENT

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